Forex Technical Update - By Rcpl Forex

Forex Technical Update

Euro: Euro surged by 103 from the day's low of 1.5486 to touch an intraday high of 1.5489 before closing lower at 1.5536. The daily stochastic is close to the oversold region while the 4-Hourly hourly shows a downmove. Look for opportunities to long at 1.5490 levels (61.8% Retracement of the latest rise) for an intraday gain of 50 pips.(Eur/Usd-1.5533).

Pound: Pound was extremely volatile as it traded in a range of 179 pips on Monday as it dipped to an intraday low of 1.9595 before gaining some strength to close at 1.9662. The hourly & 4-Hourly stochastic are neutrally poised while the daily stochastic still shows selling pressure which should lead to a fall till 1.9586 levels. (Resistance turned trendline support and 100 weekly EMA) (Gbp/Usd- 1.9624).

Yen: USD/JPY pair fell by 152 pips from the day's high on Monday as it took support of the (100 4-Hourly EMA and 55 daily EMA) at 104.01 before closing 104.42. The daily & hourly charts indicate a further fall while the hourly stochastic shows buying pressure. On the downside only a break of yesterday's low would give further bearish bias. (Usd/Jpy- 104.19).

Rupee: The rupee gained against the dollar to touch a high of 42.15 on Monday on news that the Reserve Bank of India will provide liquidity to oil companies. The rupee ended the day at 42.41/42, 20 paise higher from the previous close of 42.61/62. The forward premia came off their previous high with the six month closing at 1.69 per cent and the one-year closing at 1.48 per cent.(Usd/Inr- 42.54)

Swiss Franc: USD/CHF pair weakened yesterday as the pair dipped to touch a low of 1.0324 however later gained some strength and closed at 1.0370. The pair is currently taking support at 1.0378 ( 21 & 55 daily EMA) a break of this support would give way for further downmove which is supported by the steep fall in the daily and hourly charts. On the upside 1.0424 (50% retracement 4-hrly charts) should be held.(Usd/Chf-1.0353).

Australian Dollar: Aussie gained throughout in the yesterday's session after touching a low of 0.9501 and later closed at 0.9554. RBA rate decision was scheduled today and the rate was kept unchanged. The 4-hrly and hourly are close to the overbought region and daily still shows some buying pressure hence an upmove upto 0.9590 (61.8 % retracement) can be seen. On the downside 0.9520 (21 daily EMA and horizontal trendline support) should be a critical level and a decisive break of this level would give a bearish bias to the pair. (Aud/Usd - 0.9546).

Gold: Gold traded in a range of $17 in yesterday's session as it surged up to a high $897 and later closed weaker at $890. The daily and hourly shows an upmove while the 4-hrly shows a fall. It is currently facing a strong resistance at $893 (100 daily, 21 4-hrly, 100 hourly EMA) a break of this level would indicate a further upmove beyond the $ 900 mark. On the downside $880 (61.8 % retracement 4-hrly chart) should hold(.Gold - $892.35)

Dollar index: Dollar index is currently at 73.09, 0.06 points lower than previous levels of 73.015. Stochastic is currently at 57.4% and shows an upmove . 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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