Currency Technical Report - By FX Greece

Currency Technical Report

EUR/USD

Resistance: 1,5570-80/ 1,5610-20/ 1,5650-55/ 1,5685/ 1,5710
Support: 1,5510-20/ 1,5460-70/ 1,5425/ 1,5390/ 1,5350

Comment : In the last day of the week and the month, euro accelerated from the area of 1.5450 keeping, however, the downward trend that was formed after the tops of 1.5800-20. The risk of a further move resumption to the base of 1.5350-00 is not over and euro's reaction to the first resistance levels that form the trend, will give the first signs.

First important resistance is found at the area of 1.5600-20, levels where bears are likely to make their appearance. Next resistance emerges at the levels of 1.5650-70, area where the trend reversal is marked.

If the area of 1.5600-20 is not broken, it will indicate the strength of the downtrend and move below 1.5500 will confirm it. Below Friday's lows, next targets are at the area of 1.5390-00 and 1.5330-50 where we think is the limit for the fall.

TRADING EUR/USD : The picture is still neutral and the basic trend is bearish. We keep our positions small until we have better indications and try sell positions in any retracement towards the area of 1.5590-5610, with stops above 1.5650 and target at 1.5510-20 area...

A downward break of 1.5500 may be used for sell positions with the previous lows or the area of 1.5400 as target...

GBP/USD

Resistance : 1,9650/ 1,9680/ 1,9710-20/ 1,9770/ 1,9800
Support: 1,9600/ 1,9575/ 1,9545/ 1,9500

Comment : The week start with a sharp downward move for the pound, which broke the 1.9700 base. The current formation in the daily chart should reach the area of 1.9370-00 in order to be completed and if the day closes below 1.9700, we will follow that scenario.

First important support for today is found in the area of 1.9600-10, levels where the 50% of the acceleration is completed, while a downward break of those levels will lead to the area of 1.9500-10.

In order for this negative picture to change, we need to see an immediate retracement above the area of 1.9710. In that case the sideways consolidation will be formed into a widened triangle and the area of 1.9800-20 could be tested again...

TRADING GBP/USD : The downward break of 1.9700 and the picture from the daily chart lead us to the sellers side, trying sell positions in any retracement towards the area of 1.9670-00, with stops above 1.9735. Our first target will be at 1.9600 area, followed by the area of 1.9530-50...

USD/JPY

USD/CHF

FX Greece

DISCLAIMER

  1. The details and information included in the above analysis, are part of research based exclusively on currency charts and are of purely instructional and educational nature. None of the information featuring in the analysis can be considered as an invitation for opening positions in FOREX market or in the market of forward contracts or any securities listed on an organized or unorganized market.
  2. We assume no responsibility for any kind of losses ,profits or property loss resulting, in whole or in part, from acts that are based either directly or indirectly on the processing or the use of information, details and strategies, the reader may find in the analysis. The readers hold full responsibility for the use and the results of their actions.
  3. The recipients of the analysis must acknowledge and accept that investment choices of any kind, especially concerning the FOREX market, contain risks (high, low and occasionally zero) of reduction or even loss of their investment. Therefore, they should always be cautious prior to any kind of action.
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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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