Share This: ContentsUSD/JPY short adjustments by Kristian Kerr, Sr. Currency Strategist USD/JPY short adjustments Tuesday, Feb 9, 2016 7:20 am EDT Mon Feb 08 20:20:00 GMT 2016 by Kristian Kerr, Sr. Currency Strategist Global macro, technical analysis, cyclical analysis & market geometry Connect via: In retrospect I probably took profit on half my short position in USD/JPY last week too early. However, I am pretty mechanical on the money management side of trading and I view that “lost profit” as the cost of staying unemotional. Technically the break of last month’s low puts the exchange rate in an obvious precarious position (long -term H&S pattern) that raises the risk of a much more aggressive slide. I am glad I still have half on. The next zone of importance on the downside looks to be 114.55/35 as this marks a nice convergence of the bottom of the 1-year standard deviation channel, the 9th square root relationship of the 2015 high and the 127% extension of the late January advance. An oversold bounce from around there would not surprise, while a break below would likely confirm that a more significant decline is indeed underway. Short USD/JPY from around 121.50. Took profit on ½ of original position near 119.38. Lowered stop on remaining position from cost to 117.60. DailyFX provides forex news and technical analysis on the trends that influence the global currency markets. Learn forex trading with a free practice account and trading charts from FXCM.
Share This: A History of Trading the Forex Market A History of Forex TradingForex currency trading has made massive advancements over recent years and is becoming on the Internets most searched for trading opportunities. Technological advancements have made Forex an opportunity to make money for everyone from small individual speculators to large multi-national companies. In reality the principles of Forex trade have existed for centuries but it wasn’t until 1967 when the idea of a global system of currency exchange first began to be put together. A college professor named Milton Friedman famously wanted to take a bank loan in Pounds Sterling (feeling that the currency was overpriced against the dollar) and then sell it before buying it back once the price against the dollar had fallen. This would allow him to repay the bank and pocket a nice profit for himself. His loan application was declined due to the bretton woods agreement that was in place at the time but this set the wheels in motion for worldwide Forex trading. The Birth of the Foreign Currency Exchange In 1971 when floating exchange rates began to materialize and the bretton woods agreement was abandoned, the foreign currency exchange market was born. This advancement was welcomed with open arms by the International companies who had often noticed big profit changes both positive and negative simply based on the value of their native currency against the value of the currencies in the markets in which they traded their day to business activities. These companies would see fluctuating exchange rates effect their profit and loss accounts, often with millions being made or lost simply on the value of one currency against another. It was also these companies that were first to spot the huge money making opportunity currency fluctuations offered and these same companies were the first to leap on to the Forex trading bandwagon and attempt to increase their profit margins through brave yet profitable currency exchange decisions. Forex Currency Trading Online Online Forex Trading Advances Of course when Forex first began the Internet was a distant dream and therefore trading was carried out exclusively by the cash rich worldwide organizations. These were companies who could afford to throw a few million in to the mix in an attempt to make some big money trading currencies. Trading was carried out over the telephone via several exchange centers all over the world. A trader would monitor global activity and then ring their broker in order to commence or complete a trade order. The transfer of funds to complete trades was done through bank transfers which often took a few days to go through. This meant that whilst the Forex market offered a fantastic earning opportunity, trading was both time consuming and a hassle. With the advent and then increasing popularity of the Internet, Forex trading online opened up the doors to millions of people who had never previously had the […]
Share This: Forex is the best money making opportunity in the world of trading. Forex Trading Offers Huge Earning Potential Forex currency exchange trading is one of the fastest growing trade markets in the world. It is also the biggest with an estimated 1.8 trillion dollars being exchanged every single day. With these stats to it’s name it should come as no surprise that one of the major reasons for this exponential growth is the fact that Forex trading offers incredible earning potential. This is also why large multi-national corporations have been investing in foreign exchange for years and more and more individuals are utilizing currency trading to supplement their incomes and some are even living purely off the profits they make. Incredible Forex Leverage Ratios So why does Forex trading offer such incredible earning potential? Well firstly the currency exchange market operates through brokers who offer some significant leverage ratios to their traders. For example, you decide to purchase 10,000 US Dollars against Japanese Yen at 125.00. Next day you sell 10,000 US dollars and buy Yen at 126.00 making a profit of approximately $79. To fund this position you need a deposit of $100 not $10,000 since the rest of the amount is leveraged to you by your Forex broker. If you were to try and trade without any form of leverage you would make very minimal profits and it would not be worth your time trading. This is the beauty of Forex trading, any individual trader, no matter what their starting capital, canexperience the thrill ride of trading large amounts of currency and making big profits without depositing thousands of dollars. Massive Earning Potential Another factor that lends itself favorably to the earning potential of Forex trading is the fact that the market is open 24 hours a day. As one market is closing another is opening, Forex literally follows the sun around the earth – where the sun is shining the Forex is trading! This means you can bemaking profit 24 hours a day on Forex, particularly if you make use of an automated trading system. The speed at which things change in Forex is also a major factor behind why currency exchange can be so profitable. Barely a second goes by without currency changing in value. Unlike stocks are shares where you can be sitting on a trade for month, even years, waiting for the price to move favorably, currencies can make you a substantial profit within minutes or even seconds of you commencing a trade. There are also no expensive commission fees to pay anyone in Forex. Brokers make their money from the difference between the buy and sell price of a currency. This means you never need to concern yourself with the thought that you will lose some of your profits to your broker – whatever you earn you can keep! Stop-Loss Functions for Safer Currency Trading The stop-loss functions of Forex trading platforms will also help you tomake huge profits trading currencies. These work by you pre-setting an entry and exit point you are happy to complete a trade at. For example, you know the […]
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Share This: DailyFX.com – The technical outlook is little changed for silver. The overall trend is bullish above the January 22 low of $14 and the next resistance level and target for bullish traders is the December 7 high of $14.58, a target silver should be able to reach so long as its correlation to the price of gold holds up. My latest fair-value-estimate suggests that silver should be trading at $14.93 on gold prices trading at or above $1124.5. Traders projecting higher prices and expecting the January 22 low of $14 to hold as a support are probably accumulating silver at current prices, as the risk/reward ratio currently favors long positions. The potential loss is 25 cents vs. a potential gain of 33 cents if the price reaches the December high of 14.58, and 65 cents if the price reaches 14.90 over the coming weeks. Recent Macro Data Is Less favorable Yesterday, U.S. Core PCE rose by 1.4% YoY, from 1.3%, while headline PCE climbed to 0.6% YoY from 0.4%. This is encouraging news for the Fed’s case for raising rates and represents the Dollar being bullish and silver being bearish. Also in the U.S., the ISM report for January rose to 48.2 from 48, with the sub-components showing tentative signs of stabilization for the headline index over the coming months. New orders increased to 51.5 from 48.8, while Customer inventories remained unchanged at 51.5.This may reduce the need for haven assets such as silver and gold, if the ISM does indeed head higher over the coming months, rebounding from low levels. Boost your trading skills and pick up one of our 16 different Trading Guides Silver Prices | FXCM: XAG/USD Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano — Written by Alejandro Zambrano, Market Analyst for DailyFX.com Contact and follow Alejandro on Twitter: @AlexFX00 Struggling with Trading? Join a London Seminar original sourceDailyFX.com – The technical outlook is little changed for silver. The overall trend is bullish above the January 22 low of $14 and the next resistance level and target for bullish traders is the December 7 high of $14.58, a target silver should be able to reach so long as its correlation to the price of gold holds up. My latest fair-value-estimate suggests that silver should be trading at $14.93 on gold prices trading at or above $1124.5. Traders projecting higher prices and expecting the January 22 low of $14 to hold as a support are probably accumulating silver at current prices, as the risk/reward ratio currently favors long positions. The potential loss is 25 cents vs. a potential gain of 33 cents if the price reaches the December high of 14.58, and 65 cents if the price reaches 14.90 over the coming weeks. Recent Macro Data Is Less favorable Yesterday, U.S. Core PCE rose by 1.4% YoY, from 1.3%, while headline PCE climbed to 0.6% YoY from 0.4%. This is encouraging news for the Fed’s case for raising rates and represents the Dollar being […]
Share This: DailyFX.com – Interested In our Analyst’s Longer-Term Oil Outlook, be sure to sign up for our free oil guide here. Talking Points: USD/CAD Technical Strategy: Break through 1.4325 Would Encourage CAD Buying CAD Has Moved To Strongest Currency in G10, Was Weakest 2 Weeks Ago Oil Direction Increasingly Volatile As Trader’s Question if Jan. 20 Was Low The Story in USDCAD – Is the CAD Drop Done? The Canadian Dollar currently sits atop a strength index of G10 Currencies in a sudden two-week shift of fortunes in the FX market. Two weeks ago, the Canadian Dollar was falling through the floor of chart price support alongside WTI Crude Oil. Now, CAD has been rallying after reversing its longest losing streak since 1971, and traders are understandably wondering if more CAD strength is ahead. Market forces will continue to drive USDCAD in the short-term, but traders should remain cognizant of the Friday’s job report that could affect risk-appetite and overt focus on Oil’s next move. However, the ‘Blame it on Crude’ environment seems to be fading for now. For one, the lack of dovishness from the BoC to cut rates further has lessened the spread between the US/CA 2 years Government yield spread, which widened as the price of USD/CAD moved higher. Second, markets have been re-adjusting to the risk-reversal since the January 20 low in multiple markets (stocks, commodities, and many currencies), which seems to align CAD with risk sentiment as well. Therefore, if risk-off resumes and equities drop, USDCAD could start breaking higher, however, the CAD bears may have started hibernating now that the BoC is not in a hurry to cut rates. Key Levels after the Plunge The focal point on the chart now is a bracket. First, given the sharp ~750+ pip reversal, support looks to be at the 2016 YTD low at 1.3811 and the 3-month channel support/ trendline off the lows, as well as the 55-DMA & 50% retracement of the October-January range near 1.3760/1.3830. A strong turn off these levels higher should turn attention back to the upper-half of the channel, which would favor a move back above 1.4500. Resistance now looks to be at the lower high of 1.4325 where CAD Bulls recent reclaimed their bragging rights. A break back above 1.4325 would open up the view that the channel is holding, and price may likely resume higher. In addition, while the relationship has broken down a bit recently, a sustained move lower in WTI Crude Oil below $30bbl again would also turn the focus toward medium-term resistance on USD/CAD. Sentiment Beginning to Favor CAD Bulls When looking at sentiment, Crowd Sentiment Extremes Have Plummeted on USD/CAD relative to recent positioning, which shows that traders do not think USD/CAD is as overbought as they once did. On the sentiment chart below, you will also notice that there are the fewest number of USD/CAD bears since early December. We use our SSI as a contrarian indicator to price action, and the fact […]
Share This: DailyFX.com – Price & Time covers key technical themes daily and can be delivered to your inbox each morning by joining the distribution list: Price & Time Talking Points Gold testing 200-day moving average Other metals remain stuck in bearish consolidation patterns Silver and Platinum Price Action Not Supporting Gold Fervor A lot has been made of the recent rally in Gold. I am still pretty skeptical. Now do not get me wrong I am pretty positive on the metal in a longer-term sense. In fact it is my trade of the year for 2016 (read HERE), but I have seen this movie so many times before over the past few years. The rally that has unfolded from mid-December came from a very oversold condition. It has not tested anything meaningful on the upside in terms of resistance really until yesterday. The 200-day moving average and several key Fibonacci retracements all converge around 1130/35 and this should be the first real test for the metal. If it can get through there then we can start talking more seriously about a bona fide reversal, but even if that occurs I still think spot needs to overcome the October highs around 1190 to signal any real sort of true behavioral change. I say that because the bear market in Gold since 2011 has been littered with plenty of rally attempts that never seem to muster enough strength to overcome a prior important swing point high. If Gold can manage that then it will probably be enough evidence that the winds are truly beginning to shift in the metal. Want to see how other traders in the market are positioned? Find out HERE A big reason I have been skeptical of this rally in Gold outside of timing (several important timing relationships around the start of Q2 seem to favor another leg down), is the behavior in other precious metals. The rally in Silver has been less than impressive, as has the action in Platinum. Like Gold, both have been in strong bear markets since 2011. The action here in both looks more like a bearish consolidation than a base before turning sharply higher. Things can change obviously, but the burden of proof is still squarely on the bulls. In Silver over 14.60 opens the door to a more important upside correction, but only above 15.40 material changes the medium-term technical landscape. The same can be said for Platinum with traction above 896 needed to trigger a more important corrective process, but only a move over 926 would materially alter the negative technical picture. What is the #1 mistake FX traders make? Find out HERE. — Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com To contact Kristian, e-mail firstname.lastname@example.org. Follow me on Twitter @KKerrFX original sourceDailyFX.com – Price & Time covers key technical themes daily and can be delivered to your inbox each morning by joining the distribution list: Price & Time Talking Points Gold testing 200-day moving average Other […]
Share This: DailyFX.com – Interested In our Analyst’s Longer-Term Dollar Outlook? Be sure to sign up for our free dollar guide here. Talking Points: US Dollar Technical Strategy: ST Weakness Favored Toward 34-DMA, LT Bull View Intact Lack of FX Volatility Has Presented ‘Reversion to Mean’ Environment Seasonal Tendencies Favor USD Weakness for February One can easily see that the trend on US Dollar is higher since October 15. However, one likely has a tougher time finding a good time to buy the US Dollar. This volatility within the uptrend has become the Dollar Dilemma of late whereas the uptrend continues as the US Dollar has strengthened over the last five weeks against the GBP, JPY, & AUD while treading water for now against the EUR. For now, the focus will remain on the red corrective price channel within the larger uptrend. Channels within channels can help you see the big picture while not losing sight of the daily or weekly theme in markets. The pivots help pave the way for the corrective channel and opens the view that we could soon be testing support once again before the next Dollar Bull Run takes hold. Aside from the JPY plummet on negative interest rates last week, the US Dollar has had a tough go since many markets (equities, energy, commodity FX) may have put in a bottom on January 20. Key Levels: Watch the Recent Pivot to Hold For now, the key support level on the US Dollar has turned to a confluence of support at 12,200. This level comprises of the 34-DMA, the recent price pivot before BoJ acted, as well as near bullish channel support. Short-term resistance will focus on the weekly pivot at the zone of 12,250-12,271. A break above that zone could open the floodgates toward the new highs, and the longer-term bull channel will resume. A big development has also been the drop in US 2yr yields, which today retraced 61.8% of its 4Q rise. Given that the US Dollar has dropped more in such a drop in expectations for a rate hike and the potential for the European Central Bank to follow the BoJ in March, the Dollar dominance could continue throughout Q1 2016. However, if support fails to hold at 12,200, a deeper retracement could be afoot. To see how FXCM traders are positioned, click here. T.Y. original sourceDailyFX.com – Interested In our Analyst’s Longer-Term Dollar Outlook? Be sure to sign up for our free dollar guide here. Talking Points: US Dollar Technical Strategy: ST Weakness Favored Toward 34-DMA, LT Bull View Intact Lack of FX Volatility Has Presented ‘Reversion to Mean’ Environment Seasonal Tendencies Favor USD Weakness for February One can easily see that the trend on US Dollar is higher since October 15. However, one likely has a tougher time finding a good time to buy the US Dollar. This volatility within the uptrend has become the Dollar Dilemma of late whereas the uptrend continues as the US Dollar has strengthened […]
Share This: DailyFX.com – Talking Points: – USD/JPY Weakness to Persist on Wait-and-See Kuroda; RSI Trigger in Focus. – NZD/USD to Eye Top of Range on Strong New Zealand Employment Report. – USDOLLAR to Face Fed Rhetoric, Slowing ISM Non-Manufacturing Survey. For more updates, sign up for David’s e-mail distribution list. USD/JPY Chart – Created Using FXCM Marketscope 2.0 Despite the surprise move by the Bank of Japan (BoJ), the near-term pullback in USD/JPY may gather pace over the coming days should the Relative Strength Index (RSI) fail to preserve the bullish formation carried over from the previous month; break/close below 120.10 (61.8% retracement) to 120.20 (50% expansion) may open up the next key downside hurdle around 119.00 (161.8% expansion) to 119.10 (38.2% expansion). Even though the BoJ continues to push monetary policy into uncharted territory, the fresh comments from Governor Haruhiko Kuroda may ultimately spur a larger pullback in the dollar-yen should the central bank head endorse a wait-and-see approach after implementing negative interest rates in January. The DailyFX Speculative Sentiment Index (SSI) shows retail crowd has flipped back to net-long USD/JPY on January 29, with the ratio working its way back towards recent extremes as it climbs to 1.40 (58% of traders are long). NZD/USD Despite the 10.4% decline in Whole Milk Powder prices at the Global Dairy Trade auction, NZD/USD looks poised to retain the range-bound price action going into New Zealand’s 4Q Employment report; may see a bullish reaction as the region is anticipated to mark a 0.8% rebound in job growth. Even though the Reserve Bank of New Zealand (RBNZ) keeps the door open to further reduce the benchmark interest rate, fresh comments from Governor Graeme Wheeler may continue to produce range-bound prices should the central bank head endorse a wait-and-see approach. Will keep a close eye on the near-term range amid the failed attempt to close above 0.6570 (100% expansion) to 0.6590 (38.2% retracement), with support coming in around 0.6370 (50% retracement) to 0.6400 (61.8% retracement). Join DailyFX on Demand for Real-Time SSI Updates Across the Majors! USDOLLAR(Ticker: USDollar): Index Last High Low Daily Change (%) Daily Range (% of ATR) DJ-FXCM Dollar Index 12237.57 12255.1 12224.5 0.04 73.74% Chart – Created Using FXCM Marketscope 2.0 The USDOLLAR may continue to face range-bound prices ahead of the highly anticipated U.S. Non-Farm Payrolls (NFP) report as the ISM Non-Manufacturing survey is anticipated to show a slower expansion in service-based activity; will keep a close eye on the employment component to see how NFP expectations develop. With Kansas City Fed President Esther George and Cleveland Fed President Loretta Mester, both 2016-voting members on the Federal Open Market Committee (FOMC), scheduled to speak over the coming days, the fresh comments may impact the near-term outlook for the greenback as market participants gauge the timing of the next rate-hike. Will continue to watch the range-bound price action as the USDOLLAR remains capped around 12,273 (161.8% expansion) to 12,296 (100% expansion), with former resistance around 12,176 (78.6% expansion) to […]
Share This: DailyFX.com – Talking Points EURUSD approaching apex of multi-month consolidation formation Updated targets & invalidation levels Event Risk on Tap This Week EURUSD Daily Chart Created Using FXCM Marketscope 2.0 Technical Outlook: EURUSD has continued to consolidate into the apex of a formation darting back to the December high with the pair struggling to mount resistance at 1.0924. This level is defined by the December reversal high-day close and converges on basic trendline resistance over the next few days. A topside break of the formation is favored eyeing resistance objectives at 1.0970 (100DMA) & 1.1051 (200DMA). Note that this level coincides with basic TL resistance dating back to the August high. More significant resistance is eyed at 1.1120 where the 61.8% retracement of the October decline converges on the upper median-line parallel into the close of the week / open of next week. Avoid the pitfalls of near-term trading strategies by steering clear of classic mistakes. Review these principles in the “Traits of Successful Traders” series. EURUSD 30min Notes:The consolidation can be seen more clearly here on the 30min chart and we’ll be looking for a break of this range to offer guidance on the euro’s next leg. A topside breach is favored and so we’ll be looking to buy pullback’s / long-triggers while above the weekly opening range lows with a breach of the highs targeting the aforementioned resistance objectives. A break below the figure invalidates our immediate long-approach with such a scenario eyeing support targets at 1.0769 & 1.0724/34. Note that the 2016 opening-range low comes in at 1.0709/10 and a break below this objective threshold would put the broader short bias back in play. A quarter of the daily average true range (ATR) yields profit targets of 23-26pips per scalp. Added caution is warranted heading into the close of the week with the U.S. Non-Farm Payrolls release likely to fuel volatility in the dollar crosses. For updates on these setups and more trades throughout the week, subscribe to SB Trade Desk and take advantage of the DailyFX New Subscriber Discount! Relevant Data Releases Other Setups in Play: Webinar: Aussie Crosses at Key Inflection Points Ahead of RBA EURAUD Approaches Critical Support- Longs Favored Above 1.5300 AUDJPY Following 2016 Trade Plan- Time to Reload AUDUSD Rally Accelerates into Resistance- 7037 in Play GBPJPY Coiling For Next Big Move- Breach of 170.50 to Fuel Recovery —Written by Michael Boutros, Currency Strategist with DailyFX Follow Michaelon Twitter @MBForex contact him at email@example.com or ClickHere to be added to his email distribution list Join Michael for Live Scalping Webinars on Mondays on DailyFX and Tuesday, Wednesday & Thursday’s on SB Trade Desk at 12:30 GMT (8:30ET) original sourceDailyFX.com – Talking Points EURUSD approaching apex of multi-month consolidation formation Updated targets & invalidation levels Event Risk on Tap This Week EURUSD Daily Chart Created Using FXCM Marketscope 2.0 Technical Outlook: EURUSD has continued to consolidate into the apex of a formation darting back to the December high with the pair […]