Currency Technical Report

EUR/USD

Resistance : 1,5620-30/ 1,5655/ 1,5670/ 1,5700/ 1,5730
Support : 1,5550/ 1,5520-25/ 1,5490-00/ 1,5450

Comment : Euro rallied yesterday after the ECB's chairman comments and managed to breach eas-ily the first resistance levels that indicated the reversal. Mr. Trichet said that there is potential for the bank to raise rates in the near future and that was something that the market didn't expect.

Euro's rise should continue to higher levels, as yesterday's move couldn't satisfy all the traders that wanted to follow these new developments.

Volatility, due to important news ( Non Farm Payrolls), is likely to be used for buy positions.

First intraday support is found at the area of 1.5560-70, with more important at 1.5520-25 and 1.5470-90 area. Below 1.5450 the move will be unexpected, according to the technical outlook and the market's feeling after yesterday's developments. In such case, the targets will be in the area of 1.5350 and 1.5280-00 again…

Upwards, first resistance is found at 1.5630 area, where was the last top before yesterday's lows, followed by more important at 1.5680-90. Our basic targets for the move will be set in the area of 1.5740-50 and 1.5800…

TRADING EUR/USD : In our yesterday's analysis we were waiting for reversal signs and indica-tions that would lead us to the buyers side. Now we are on that side, and any retracement towards 1.5520-40 or 1.5490-5510 will be used for buy positions, with stops below 1.5450 area.

Our first target will be the area of 1.5620-30, followed by the area of 1.5680-00. An upward break towards 1.5680-00 area, will be used for sell positions.

The first hours of the European Session and before the important news announcements, small sell positions could be tried in the area of 1.5650 with close targets and stops

GBP/USD

Resistance : 1,9600-20/ 1,9650/ 1,9680-00/ 1,9730
Support : 1,9550/ 1,9500-10/ 1,9460-70/ 1,9400

Comment : The pound performed an upward break from the area of 1,9460. Even if there are rever-sal signs, we will be cautious until the break of first's important resistance which set the reversal.
First important resistance is found at 1.9620-30. An upward break will lead to 1.9700 area.

After yesterday's rise the ranges we had set in our morning analysis were reached and first important support for today is found at the area of 1.9550. Next target will be the area of 1.9500-20, with basic targets at 1.9350-00 coming back in play.

TRADING GBP/USD : The picture is not clear and we will keep our positions small. We keep sell positions from our strategy yesterday and we could add in case of a downward break of 1.9550… A clear break of 1.9630 will be followed with buy positions.

USD/JPY

USD/CHF

FX Greece

DISCLAIMER

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.
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.
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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.

FOREX-DD : Forex Daily Analysis