Forex Technical Analysis

EUR/USD

Current level-1.5591

The pair has set a local bottom at 1.5363 completing the fall from 1.5818. Technical indicators are neutral. The 50- day SMA is currently projected at 1.5663.

After European Central Bank President Jean-Claude Trichet surprised the market with an interest rate hike possibility next month, EUR/USD took off the recent lows at 1.5363 and sharply advanced to 1.5604. In our opinion this marks a beginning of a short-term uptrend towards 1.6017 and beyond, as we have stated in our Midterm Forex Outlook. Intraday next resistance lies at 1.5663 and support can be found above 1.5534.

Today's strategy: Stand aside.

Resistance		Support
intraday	intraweek	intraday	intraweek
1.5663	1.5735	1.5961	1.6020
1.5534	1.5363	1.5282	1.50+

USD/JPY

Current level - 106.03

The pair is in a corrective uptrend from the 95.75 short-term bottom. Technical indicators are rising slowly and the upmove is dynamically supported at 102.36. The inner structure of the rise is by all means a corrective one, so from a larger point of view the overall downtrend from 124.14 is not over yet.

As expected the pair bottomed at 104.56, renewing the uptrend towards 106.68. Be careful around the above mentioned level, as it can provoke a reversal based on the resistance coming from the higher frames. Intraday expect one more test of the 105.54 support, before bouncing higher to 106.68.

Today' strategy: Buy on a dip to 105.54 with stop below 105.12 and target at 106.68.

Resistance		Support
intraday	intraweek	intraday	intraweek
106.28	106.68	106.68	108.31
105.13	104.56	102.63	100.82

GBP/USD

Current level- 1.9571

The downtrend from the 2.0397 local top has reached a low at 1.9374. Technical indicators are reversed on the 4 h. chart and the trading is situated below the 50- and 200-day SMA, currently projected at 1.9819 and 2.0044

As expected the pair bottomed at 1.9463 and advanced well to 1.9604. Unfortunately the impulse was not strong enough to break beyond 1.9637, that would definitely mark, that an uptrend has emerged for 2.0225. For now the downtrend from 1.9851 shall be considered as present and intact, and only above 1.9637 and mostly above 1.9741 our expectation for an advance towards 2.0225 will be confirmed.

Today's strategy : Buy on a break above 1.9604 with short-term target at 1.9851 and risk below 1.9463 or intraday's low.

Resistance		Support
intraday	intraweek	intraday	intraweek
1.9604	1.9741	1.9963	2.0196
1.9527	1.9463	1.9338	1.9196

DeltaStock Inc. - Online Forex & Securities Broker
www.deltastock.com

RISK DISCLAIMER: These analyses are for information purposes only. They DO NOT post a BUY or SELL recommendation for any of the financial instruments herein analyzed. The information is obtained from generally accessible data sources. The forecasts made are based on technical analysis. However, Delta Stock’s Analyst Dept. also takes into consideration a number of fundamental and macroeconomic factors, which we believe impact the price moves of the observed instruments. Delta Stock Inc. assumes no responsibility for errors, inaccuracies or omissions in these materials, nor shall it be liable for damages arising out of any person's reliance upon the information on this page. Delta Stock Inc. shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation, losses or unrealized gains that may result. Any information is subject to 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.

FOREX-DD : Forex Daily Analysis