Forex Technical Update - By Rcpl Forex

Forex Technical Update

Euro: Euro witnessed a free fall in the yesterday's session on the back of weak trade balance data and strong US data as it fell by 150 pips to touch a low of 1.5609, however later gained some strength from the 200 4-hourly EMA at 1.5611 and closed at 1.5646. It is currently trading at 21 daily EMA and trendline support which is crucial, a firm break of this support would give a bearish bias for the pair and a fall upto 1.5542 (55 daily EMA) can be expected. (Eur/Usd-1.5574).

Pound: Pound showed some wild moves in the yesterday's session as it plummeted to a low of 1.9705 due to the strong US durables goods data but a good recovery was seen later as it surged up and was capped at 1.9826.It has been facing stiff resistance at 1.9822 (100 daily EMA) since past few trading sessions and decisive break of this level is required to suggest a strong upmove otherwise the intraday bias remains on the downside and the support of 1.9705 ( 21 daily EMA) should hold. (Gbp/Usd- 1.9700).

Yen: USD/JPY pair witnessed a good recovery yesterday as it surged up by 140 pips to touch an intra day high of 105.31 but the further upomove was capped by the the trendline resistance and 100 daily EMA at 105.00. The daily stochastic is almost close to the overbought while the 4-hrly and hourly shows a fall on the downside and 103.90-104.05 (55 & 21 daily EMA and 100 & 55 4-hrly EMA) cluster support should hold. (Usd/Jpy- 105.00).

Rupee: The rupee appreciated against the dollar as global crude prices eased. It opened at 42.86 and touched an intra-day low of 42.90 and ended the day at 42.74/75-levels against the dollar, rising from its previous close of 42.96/97.In the forward premia market, the 12-month ended at 1.95 per cent.(Usd/Inr- 42.74)

Swiss Franc: USD/CHF pair surged by 164 pips to a high of 1.0423 before closing at 1.0379 levels (50% retracement of the fall from 1.1106 to 0.9638, 21 & 55 Daily EMA). The 4 Hourly stochastic has flattened in the overbought region while the daily still indicates buying pressure. If the current support holds again an upmove past the 1.0400 levels and a breach of yesterday’s high may be witnessed. .(Usd/Chf-1.0423).

Australian Dollar: AUD/USD pair traded within 67 pips as it surged from the days low of 0.9561 to close at 0.9627 on Wednesday. The 4-Hourly stochastic are overbought while the daily indicates room for further upmove. Critical support comes in around 0.9570 levels (200 Hourly & 55 4-Hourly EMA, 23.6% retracement of the latest fall). Look for opportunities to initiate cautious longs at those levels. (Aud/Usd - 0.9606).

Gold: Gold fell heavily from the days high of $910 in early European session on back of Crude Oil losses, but rebounded strongly to end the New York session at $901. The 4-hourly stochastic shows buying pressure while the daily is closed to the oversold region. Immediate support comes in at $894 levels (100 Daily EMA & 21 weekly EMA) on failing to break which an upmove till $911 levels (50% retracement of the latest fall) can be witnessed.(Gold - $901)

Dollar index: Dollar index is currently at 72.62, 0.15 points higher than previous levels of 72.47. Stochastic is currently at 30.45% 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.

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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.

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