Forex Technical Update - By Rcpl Forex

Forex Technical Update

Euro: Euro continued to be under pressure in the last session as it marked a low at 1.5461 levels before closing at 1.5557. It is trading around the 55 Daily EMA at 1.5540 with the 4-hourly chart being overbought. Although, the daily and hourly chart is close to the oversold region, correction upto the levels of 1.5485 could be seen.(Eur/Usd-1.5527).

Pound: Pound traded in arrange of 139 pips on Friday to surge to a high of 1.9822 before closing at 1.9807. The hourly stochastic show an upmove while daily and 4-hrly stochastic still showing selling pressure. Immediate resistance comes in at 1.9755 (55 4-Hourly & 100 Hourly EMA) Look for opportunities to short at those levels (Gbp/Usd- 1.9698).

Yen: USD/JPY pair traded in a range of 50 pips in the Fridays session as is scaled up to touch an high of 105.74 and closed above the 105 mark at 105.50. The daily stochastic have flattened in the overbought region while the 4-hrly and hourly still shows some room for further upmove hence a retest of previous high can be expected. On the downside 105.00 ( 50% retracement and 100 daily EMA ) should hold. (Usd/Jpy- 105.26 ).

Rupee: The rupee rose to a two-week high early on Monday to touch 42.43 after the RBI said it would provide foreign exchange to oil refiners. The rupee ended the day at 42.45/46 against the dollar, rising from Thursday's close of 42.78/79. Forward premia on near term contracts slipped, with the one month contract ending the day at 3.42%.The six-month contract ended the day at 2.26%, while the annual contract dipped to 1.76%.(Usd/Inr- 42.20)

Swiss Franc: USD/CHF pair surged by 114 pips to a high of 1.0526 before closing at 1.0420 levels. The daily and hourly stochastic have corrected in the overbought region and shows a fall while the 4-hrly shows some buying pressure. Critical resistance comes in at 1.0530 levels (61.8% Retracement of the fall from 1.1106 & 0.9638, 100 Daily EMA) a firm break of this level would indicate a bullish upmove however on the downside 1.0380 (55 & 21 daily EMA and 50 % retracement) should hold.(Usd/Chf-1.0423).

Australian Dollar: Aussie witnessed a range-bound session on Friday as it traded in a range of 66 pips. It surged up to touch an intra day high of 0.9578 but could not sustain those levels and dipped down to touch a low of 0.9512. The daily & hourly stochastics are close to the oversold region while the 4-hrly still shows a fall. The pair is currently taking support at 0.9520 (21 daily and 100 4- hourly EMA) and firm break of this levels would suggest a bearish bias for the pair and a fall upto 0.9470 (50 % retracement 4-hrly charts) can be expected. (Aud/Usd - 0.9520).

Gold: Gold fell by $10 from the days high of $888 in the Friday's session but later recouped its losses to close at $ 886. Its daily and hourly stochastic are in the oversold region while the 4-hourly shows a fall. Cluster resistance comes in the range of $896- $900 in the 4-hrly and daily charts hence an upmove past $900 seems to be unlikely, its currently trading close to 61.8 % retracement daily charts at $880 a break of this support will give a bearish bias for gold.(Gold - $884)

Dollar index: Dollar index is currently at 73.015, 0.08 points higher than previous levels of 73.07. Stochastic is currently at 53.16% and a downmove. 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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