Elliott Wave and Fibonacci Predictions: EUR/USD - By Capital Forex Group

Elliott Wave and Fibonacci Predictions

Hey traders, new week is here and market is already moving like crazy, especially this GBP/JPY dropped for around 250 pips in just a few hours. Ok, as you already know, prices missed my last position from Friday on EUR/GBP for a five pips. However, I removed my orders after this, because it was Friday and you never now about this gap thing in new week. So, I will slow down with my trades on this pair and give to the market sometime to develop how it wants. Right now I am more focused on EUR/USD, so let's see what we have...

EUR/USD

If you remember my update on Friday, I mentioned that we could see prices to move up somewhere near to 1,5600. I believe that we are in the correction move of wave II, and it looks like there are good chances to make some pips in this one. I will wait on a market to come to me, and then I will try to go with it. I have my short orders from 1,5605-1,5620, with stops above 1,5650. These orders could be in action very fast, especially if blue wave (b) is already done and the wave (c) in on the way. But honestly I believe in more complex moves in this zigzag, what I wont to say here is that I am expecting another move down to around 1,5500 before will trend continue to 1,5600. I am talking about red wave c of blue wave (b). I have my long orders from 1,5480-1,5500 with stops below wave I. We can also see that 4hour stochastic is moving up, near to the zero line, so this would be ideal for wave II to complete around 1,5600. Traders, see you tomorrow, Grega

Gregor Horvat
chief executive officer
forex analyst
Capital Forex Group LLC

These recommendations are for demonstration purposes only. You must do your own research and make your own investment decisions. Past performance is not necessarily indicative of future results. Before forex trading you should understand the risks associated with these trades including the potential loss of the entire premium paid. No representation is made that any account is likely to achieve profits or losses as indicated in our interactive portfolio. Capital Forex Group LLC and its owners are not liable for any losses, monetary or otherwise, that result from the content of this and any newsletter published by Capital Forex Group LLC. Please realize the risk with any investment and consult investment professionals before proceeding. Trading foreign exchange/Forex involves substantial risk of loss and is not suitable for everyone.

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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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