Forex Technical Update - By Rcpl Forex

Forex Technical Update

Euro: Euro remained under pressure as it dipped to a low of 1.5682 from the highs of 1.5818 yesterday. Although the daily charts are extremely overbought, the 4-hourly is moving towards the oversold region. On the downside 1.5638 is an important support (21 Daily EMA & 100 4-hourly EMA). Initiate longs around these levels targeting 60 pips.(Eur/Usd-1.5705).

Pound: Pound retraced almost 130 pips in yesterday's session as it touched a low of 1.9713. Currently cable is trading around the 55 Daily EMA, the daily chart remains overbought. A test of 1.9698 (21 Daily EMA & 50% Retracement) could be witnessed. Cautiously initiate longs here targeting 50 pips intraday(Gbp/Usd- 1.9742).

Yen: The pair strengthened almost 100 pips yesterday touching 104.33. Although the 4-hourly charts are overbought, the hourly charts are heading towards the oversold region. The upside could be contained well around 105.00 levels (100 daily EMA & 50% Retracement). Opportunities to initiate shorts on the pair at higher levels could be considered.(Usd/Jpy- 103.90).

Rupee: The rupee slumped against the dollar on month end dollar demand from importers.It opened at 42.80/82 and touched a low of 42.97/ 98. It then bounced back to 42.89/90 but finally ended the day at 42.96/97.The rupee is expected to be in the range of 42.85-43.10 in the current week. In the forward premia market, the 6-month closed at 2.37 per cent and the 12-month ended at 1.75 per cent. (Usd/Inr- 42.86)

Swiss Franc: USD/CHF pair surged by 125 pips from the day's low of 1.0221 before closing higher at 1.0337. The 4 Hourly stochastic indicate a downmove while the daily indicates buying pressure. Critical resistance comes in at 1.0365 levels (50% retracement of the fall from 1.1106 to 0.9638, 21 & 55 Daily EMA, 100 4-Hourly EMA) only on breaking which an upmove till 1.0400 levels and further may be witnessed.(Usd/Chf-1.0308).

Australian Dollar: AUD/USD pair traded within 55 pips as it surged from the days low to touch a high of 0.9634 before closing at 0.9584 on Tuesday. The daily and 4-hrly indicates buying pressure while the Hourly stochastic is overbought. Immediate support comes in around 0.9560 levels and a break of the same would lead to fall till 1.9515 levels (38.2% retracement of the rise from 0.9290 to 0.9652). (Aud/Usd - 0.9609).

Gold: Gold prices fell by $27 from the days high of $930.65 on the back of broad commodity sell of and increased risk appetite in riskier assests and finally closed at $ 905.75. The 4-hourly stochastic is oversold while the daily & Hourly show room for a downmove till $894.58 (100 Daily EMA & 21 weekly EMA)(Gold - $908).

Dollar index: Dollar index is currently at 72.47, 0.43 points higher than previous levels of 72.04. Stochastic is currently at 19.55% and showing an upmove. Medium term target 75.00.

RCPL FOREX
www.rcplforex.com

DISCLAIMER

These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsible for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.

Posted by izone.net

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)
Disclaimer: Content in the Forex Forecast and Analysis section is for informational purposes only. Contributors submitted Forex Forecast, Forex Commentary, Forex Analysis, and Forex Articles and articles on other markets are based upon information gathered from various sources believed to be reliable, complete, and accurate. However, no guarantee can be made as to the validity of the believed sources. All statements and expressions in the Forex Forecast and Analysis section are opinions, and not meant as investment advice or solicitation. Forex Markets can be volatile and opinions may change without notice.

FOREX : Foreign Exchange Market

FOREX is a word play on the term Foreign Exchange Market. It is a market for buying and selling of currencies from all over the world. Certainly, such transactions are bound to be voluminous. It is just an estimate that there are about transactions of $1.5 trillion USD on a daily basis in the FOREX. Now just compare this with the paltry $300 billion USD a day transactions for the US Treasury Bond and the $100 billion a day transactions for the US Stock Exchange.

The FOREX came into existence in 1971 when the fixed currency exchanges were abolished. Currencies no longer had fixed values after that; on the contrary, their rates (mostly taken in comparison with the USD) were fluctuating, and changed on a daily basis. Throughout the seventies and the eighties the FOREX grew steadily, showing more advancement in the later years. The market has stupendously grown from $70 billion USD a day to the staggering amount that it transacts today on a daily basis.

There are actually about five thousand trading institutions in the FOREX. These include international banks, central government banks such as the US Federal Reserve, and commercial companies and brokers for all types of foreign currency exchange. The best thing that shows the unbiased nature of the FOREX market is that it has no fixed headquarters anywhere – it operates primarily from all major cities like New York, Tokyo, London, Hong Kong, Singapore, Paris, Frankfurt, etc. One can even use the telephone or the internet to make the transactions. The major businesses at the FOREX are the buying and selling of products in other countries. Several transactions are also conducted from the currency brokers or traders who stand to make small profits with the daily fluctuations in the market.

Most of the FOREX business is centered on big banks and financial institutions, but it doesn’t mean that the FOREX is inaccessible to small investors. The recent changes in the financial regulations have effectuated this accessibility. Earlier, a minimum transaction size was required to conduct business with the FOREX. But the current rules have made it possible to break large inter-bank units into smaller bits. Each bit is worth as less as $100,000. This makes it possible to each individual investor through loans that are extended for trading, known as leverage. The ratio to control the lots is 100:1. This means, every $1000 USD will allow one to control $100,000 on the FOREX.

The benefits of trading with the FOREX are mentioned below:-

(1) Liquidity of Investments – As the FOREX is a huge market, the funds have a very high degree of liquidity. This is because of the presence of the international banks who provide their bids and carry out a large number of transactions on a daily basis. Therefore, there is always a buyer or seller for any type of currency.

(2) Highest Degree of Accessibility – The FOREX is open 24 hours a day for 5 days a week. Every Monday morning the exchange opens at Australian Standard Time and closes on Friday afternoon at New York time. Greater accessibility is provided because the transactions can be conducted from the person’s home or office.

(3) Open Market – At the FOREX, there are no secrets. All the fluctuations that occur in the market are made accessible to everyone at the same time. There is no insider trading in the FOREX.

(4) No Commission – There is no hassle of paying commission to the brokers in the FOREX. Here the brokers earn by setting up a difference between the buying price and the selling price of a currency, which is known as a spread.

It must be understood by now that for the FOREX to work effectively, the currencies must always be traded in pairs. For instance, the Japanese yen must be traded against the euro. When one kind of currency is sold, there should be another to be bought in its stead.

The profit happens because there is always mobility between the different currencies. Even if there is a miniscule change in the exchange rate, then it could mean substantial changes in the profits due to the large amount of money involved in the transactions. People are thronging to the FOREX and not any other institution due to the trust that they have in it. To add to the advantage, the market is absolutely well-advanced and uses sophisticated software for dealing out its transactions.

eXTReMe Tracker