GDMFX - Daily News

[GDM_FX]

Forex Technical Analysis: The calm before the breakout.

EUR/USD

Forex Technical Analysis: For almost the entire duration of Friday’s trading session the pair moved higher and even touched again the resistance located at 1.3400 but price ran out of steam before a break could occur.

Technical Outlook
Friday we witnessed the third attempt this month at breaking 1.3400 and at the moment price seems to bounce lower again. If this is the case and we will not see a decisive break of resistance early in the week, the pair might start to move towards 1.3200 and the uptrend which is already weak might be reversing. Today we don’t anticipate major developments due to the slow and ranging way that price usually moves Mondays.

Fundamental Outlook
The main and only event today is the release of the US Durable Goods Orders scheduled at 12:30 pm GMT. The value is expected to decrease from the previous 3.9% to -3.0%. Durable goods have a higher cost that other types of goods and that’s why better than anticipated numbers suggest a thriving economy and usually strengthen the US Dollar.


GBP/USD

Although the Second Estimate UK Gross Domestic Product came out Friday with better than anticipated values and generated a brief rise, the pair quickly started to move to the down side, invalidating a bullish scenario.

Technical Outlook
Today we expect price to remain in close vicinity of 1.5600 moving slightly above and below it. Given that Mondays are slow days, price is likely to move sideways and no clear distance to be created between it and 1.5600. This outlook is sustained by the fact that today UK Banks are closed and low volatility is expected.

Fundamental Outlook
As we mentioned before, no economic indicators are released today by the UK because their Banks are closed celebrating Summer Bank Holiday. However, the pair will be affected by the US Durable Goods Orders which we mentioned earlier.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 4-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Source of article from the best forex broker.

 

[GDM_FX]

THE FOREX MARKET: WHEN AND WHERE IS IT GOING TO BREAK?

EUR/USD

The Forex Market: As anticipated, yesterday was not an action packed day and the pair moved slowly, with no real sense of direction. The US Durable Goods Orders came out a lot worse than anticipated but the event created just a brief surge, not an extended move.

Technical Outlook
The bearish pressure seems to be building up and all moves to the upside are quickly reversed, before any major developments can take place. Today’s price action is likely to give us the answer about future direction. If a break above 1.3400 does not occur, we could be looking at a trend reversal with the first target being 1.3300 support.

Fundamental Outlook
At 08:00 am GMT the German IFO Business Climate is announced. This is a survey based on about 7,000 businesses who are asked to rate the current economic conditions and to provide a 6 month outlook. The forecast value is 107.1 and the previous was 106.2; better values usually strengthen the Euro. Later in the day, at 2:00 pm GMT the US Consumer Confidence is released, expected to decrease slightly from the previous 80.3 to 79.6. Lower numbers than expected will most likely weaken the US Dollar and drive the pair higher.


GBP/USD

The pair had similar movement to the EUR/USD and once the worse than expected US data came out, we saw a touch of 1.5600 which turned now into resistance but price was quickly reversed to the down side.

Technical Outlook
Except the whipsaw generated by the news release yesterday, the pair is trading sideways and a technical prediction cannot be made accurately. The thing too look out for is a break of 1.5600 resistance which may generate a continued move to the upside. On the other hand, a touch and rejection off this level indicates that down side movement will probably continue.

Fundamental Outlook
The United Kingdom doesn’t release any news today so price action will be driven by the US Consumer Confidence indicator and by the technical aspect.

Written by: Bogdan Giulvezan
The article above is based on the writer’s 4-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.
Source of article from the best forex broker.

 

[GDM_FX]

THE FOREX MARKET: THE MIXED MOVEMENT CONTINUES.

EUR/USD
The Forex Market: Yesterday German data came out better than anticipated but the pair headed down at the time of the release and when good US data was released, the pair went up. This is the opposite of what happens under normal conditions and almost the entire day was characterized by such mixed movement.

Technical Outlook
During yesterday’s trading session the pair came very close to 1.3400 again but failed to break it and at the moment it’s hovering around this level. If a break doesn’t occur today, the balance of power will probably be shifted towards the bears and we will witness the start of a move into 1.3300 territory. Even if this is the case, we don’t expect smooth movement until price reaches the mentioned support, considering the difficult trading environment experienced lately.

Fundamental Outlook
Today at 2:00 pm GMT the US will announce the Pending Home Sales. The indicator represents the change in the number of house sales which are under contract to be sold but await the final transaction; for today’s release an increase is anticipated from the previous -0.4% to 0.2%; usually better than anticipated numbers strengthen the US Dollar.


GBP/USD
The pair had a smoother movement than its sister and mainly moved to the downside, with some bumps along the way represented by a rise after a touch of 1.5500 minor support.

Technical Outlook
We anticipate the latest direction to continue and price to fall below the minor support located at 1.5500. To the upside the first major resistance is represented by 1.5600 but today’s price action will be highly affected by Mark Carney’s speech. However, we anticipate another touch of 1.5500 before price can choose a direction.

Fundamental Outlook
As we mentioned, today’s most important event is the speech of Mark Carney, the Governor of the Bank of England. The scheduled time is 11:45 am GMT and the place is the East Midlands Conference Centre, in Nottingham. As always, public speeches of the heads of central banks are closely watched by market participants and usually generate high volatility.

Written by: Bogdan Giulvezan
The article above is based on the writer’s 4-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Source of article from the best forex broker.

 

[GDM_FX]

Forex Technical Analysis: Still ranging but a breakout is imminent.

EUR/USD
Forex Technical Analysis: Yesterday the pair made another timid attempt at breaching 1.3400 but it did not produce a breakout and as a result price moved on a bearish path for almost the entire rest of the day, coming very close to 1.3300 support.

Technical Outlook
Price tried on numerous occasions to break 1.3400 but this wasn’t achieved and at the moment we favor a break of the important support located at 1.3300. Of course, we are still trading inside a horizontal channel so moves to the top barrier are not out of the question but we consider them less probable.

Fundamental Outlook
Today’s most important Euro Zone indicator is the German Preliminary Consumer Price Index which is released at 12:00 pm GMT and expected to decrease slightly from 0.5% to 0.2%. Because it has inflationary implications, better than expected numbers usually strengthen the Euro. Half an hour later the US Preliminary Gross Domestic Product is announced, with a potential increase to 2.2% from the previous 1.7%. The GDP is the main gauge of an economy’s performance and normally better than expected values strengthen the currency.


GBP/USD
The day’s most important event was the speech of BoE Governor Mark Carney. His positive and relaxed attitude during the speech and his answers to the questions that followed reversed the pair’s decline.

Technical Outlook
What appeared to be a clear and decisive break of 1.5500 support was reversed by Mark Carney’s speech and at the moment price is trading above the mentioned level. However, we are still bearish biased on the pair considering the fact that no major resistance was broken by yesterday’s rally.

Fundamental Outlook
Today the United Kingdom doesn’t release any important economic indicators so the pair’s movement will probably be influenced by the technical aspect and the US Gross Domestic Product.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 4-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Source of article from the best forex broker.

 

[GDM_FX]

Forex Technical Analysis: The battle for support has begun.

EUR/USD
Forex Technical Analysis: As anticipated, yesterday’s price action was not very volatile or unidirectional and instead, price moved above and below 1.3200. The Spanish and Italian Manufacturing data was better than anticipated but the impact on the market was mild.

Technical Outlook
We anticipate a break of 1.3200 support but we also notice the oversold condition shown by the Relative Strength Index. This is indicative of a potential move to the upside which can either confirm that 1.3200 has turned into resistance or show us that yesterday’s move below this level is a false break. The next support is represented by the level of 1.3075 but we don’t believe it will be touched today.

Fundamental Outlook
The Euro Zone has a quiet day so center stage is held by the US Manufacturing Purchasing Managers’ Index which is announced at 2:00 pm GMT and is expected to decrease from last month’s 55.4 to 54.2. This is a leading indicator of economic health focused on the Manufacturing sector and based on the opinions of about 400 purchasing managers so higher numbers than expected are beneficial for the US Dollar.

GBP/USD
Yesterday’s better than anticipated value of the UK Manufacturing Purchasing Managers’ Index created enough bullish pressure to take price in close vicinity of 1.5600 resistance. However, those high prices couldn’t be sustained for long and the pair begun moving to the down side.

Technical Outlook
We believe price is attempting to touch 1.5500 again and possibly even break it today. The pair is still ranging and no clear direction is established, a fact which is confirmed by yesterday’s rally followed by a drop. A break of 1.5400 would indicate a clear shift of power between the bulls and the bears even if we don’t anticipate that to happen today.

Fundamental Outlook
At 08:30 am GMT the UK announces the Construction PMI which is expected to increase from 57.0 to 58.4. Since this is a leading indicator of economic health, better than anticipated values strengthen the Pound and may take the pair higher. The US indicator mentioned earlier will also have a direct impact on the pair.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 4-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Source of article from the best forex broker.

 

[GDM_FX]

The Forex Market: Mixed trading environment before Interest Rates day

EUR/USD
The Forex Market: Yesterday’s most anticipated economic indicator was the US Manufacturing PMI which came out with a value of 55.7, better than the anticipated 54.2. This strengthened the US Dollar but it did not generate an extended move.

Technical Outlook
Price continued its bearish path and is now trading at a safe distance below the level of 1.3200 but the four hour candles are showing wicks on their lower side, a sign that price might be heading higher. This, coupled with the oversold condition of the Relative Strength Index (mentioned yesterday also) makes us believe that price will rise to touch 1.3200 again. A touch followed by a bounce lower will confirm the fact that this level has now turned into resistance.

Fundamental Outlook
Today at 07:15 the Spanish Services PMI is announced, with an increase expected from 48.5 to 49.3. Half an hour later the Italian indicator with the same name comes out with a forecast value of 49.2 compared to the previous 48.7. Both indicators can strengthen the Euro if their values are higher than anticipated but they are considered to have a medium impact on the pair. At 12:30 pm GMT the US Trade Balance is released, measuring the difference between imported and exported products and services. The anticipated value is -38.6B and higher numbers are beneficial for the American economy.


GBP/USD
The pair had another clash with the resistance located at 1.5600 on the back of better than anticipated UK Construction PMI but price soon started to move down, towards 1.5500.

Technical Outlook
The four hour Pin candle formed right on resistance is very bearish and indicates that lower prices are probable for the pair. The next support is located at 1.5500 and our bias is bearish for another touch or even break of this level. However, this outcome depends a lot on the UK economic data that comes out today.

Fundamental Outlook
The only UK indicator of the day is the Services PMI which is a leading indicator of economic health based on the opinions of purchasing managers from the Services sector. Today’s anticipated number is 59.8, a small decrease from last month’s 60.2. Better numbers usually strengthen the Pound and drive the pair higher. The US Trade Balance will also influence the pair’s movement.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 4-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Source of article from the best forex broker.

 

[GDM_FX]

The Forex Market: Finishing the week on high volatility.

EUR/USD
The Forex Market: Yesterday the Euro declined to a six-week low against the US Dollar on the back of Mario Draghi’s comments regarding a possible rate decrease in the future. This shows that he is still not very confident about the economic situation and that we are likely to see lower prices for the pair.

Technical Outlook
Price moved decisively below 1.3200 resistance and more down side movement is anticipated. Our bias is bearish, taking into consideration Draghi’s comments and the move back under 1.3200. For today’s trading session a touch of 1.3075 is very possible but keep in mind that profit taking by sellers may bring price higher during the day and the US economic indicator released today has the potential to overthrow any technical outlook.

Fundamental Outlook
The most important job related US indicator is released today: the Non Farm Employment Change. The scheduled time is 12:30 pm GMT and the expected number is 178K compared to the previous 162K. A higher number shows that more people are employed and this is normally viewed as an improvement in the economic situation and generates US Dollar strength. High volatility is expected at the time of the release. The G20 meetings continue today and depending on the matters discussed, could generate strong movement as well.


GBP/USD
The Bank of England did not change the Interest Rate or the Asset Purchase Facility but the pair finished the day lower on the back of US Dollar strength.

Technical Outlook
Although the pair moved lower, it did so in a less convincing way than the EUR/USD pair. At the moment price is sitting just below 1.5600 and we cannot consider this to be a clear break which will generate an extended bearish move into the support located at 1.5500. However, we are slightly biased towards the bear side but we acknowledge the importance of the US Non Farm Employment indicator which will highly influence price action.

Fundamental Outlook
Today at 08:30 am GMT the United Kingdom releases the Manufacturing Production numbers. Because Manufacturing makes up for about 80% of the entire Industrial production, the release of this indicator can generate strong movement; the expected value is 0.3%, a decrease from the previous 1.9%. However, the US Non Farm Employment Change will be the day’s strongest market mover.

We hope you had a profitable trading week and we wish you a relaxing weekend.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 4-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

More articles from the best forex broker.

 

[GDM_FX]

The Forex Market: A slow start to an important week.

EUR/USD
The Forex Market: Friday’s main event was definitely the release of the US Non Farm Employment Claims which came out with a value of 169K, worse than the forecast 178K. This created US Dollar weakness and as a result price moved strongly to the upside.

Technical Outlook
Friday’s rally encountered heavy resistance before price could break 1.3200 to the upside. For today’s trading session we don’t expect to see a sustainable break of the mentioned level and if price moves above 1.3200 it is very possible to see another move below it. A touch followed by a bounce lower will indicate that Friday’s rally was just a single bullish move and price will continue to the south.

Fundamental Outlook
The Euro will be influenced today by the release of the Sentix Investor Confidence survey scheduled at 08:30 am GMT. This is a leading indicator of economic health based on the opinions of about 2,800 investors and analysts; today’s anticipated value is -4.0 while the previous number was -4.9. Better than anticipated numbers can strengthen the Euro but the indicator is considered to have a low impact on the pair.


GBP/USD
After the initial bullish move generated by the worse than anticipated US Non Farm Employment numbers, the pair stopped and moved in a very narrow range until the end of the trading session, showing us the bulls are not in clear control.

Technical Outlook
We expect a slow and ranging day for the pair; another touch of 1.5600 is very possible but we don’t anticipate any major developments. Minor resistance is represented by Friday’s high at 1.5680 but we are neutral on the pair at the moment, considering the lack of momentum experienced after the strong move to the upside.

Fundamental Outlook
The UK doesn’t release today any notable economic or financial indicators and this contributes to our expectations for a slow day.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 4-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

More articles from the best forex broker.

 

[GDM_FX]

GDMFX FREE WEBINAR 22 FEB 2013 Ask John Hopson
http://www.youtube.com/watch?v=BGPhtqmJPxk

 

[GDM_FX]

Bollinger Bands and MACD – Volatility and Direction.
One of the best tools for gauging the volatility of the markets is the one developed by John Bollinger in the early 1980’s and named simply, Bollinger Bands. This tool has the ability to contract when the market is slow and quiet and expand when the market moves like a rocket. In a previous article regarding the Bollinger Bands, we told you not to trade in the zone where you see the Bands contracting more than usual because a strong move is next. Well, the strategy that we are presenting today tries to identify the direction of the strong move that follows. And it does so by using the Moving Average Convergence Divergence indicator, commonly known as MACD. Volatility can be good for the trader, but it also implies more risk, because if price goes in the opposite direction of our trade, the Stop Loss will be quickly hit so we must use good money management rules when we are trading a volatility strategy like this one.

After plotting Bollinger Bands and MACD on our charts, both with default settings, we must wait for a contraction on the bands. Remember, the distance between the Bands changes almost all the time, but we need to see them contracting more than usual, until they form a very thin channel, containing price This contraction is commonly known as the Bollinger squeeze. After a Bollinger squeeze, we know for sure that price will move strong in one direction or the other. Then we must let the MACD give us an indication of where price will go. Here is a picture of what we are looking for:

In the picture above we can see the bands very close together and we know a strong move will follow. When price moves up, we see that the move is confirmed by the MACD lines which are moving up (same direction as price) and diverging. So now the move up on price is confirmed by the MACD and we can take a long trade. Also, we must previously see a Bullish cross of the MACD lines. This means that the fast line must cross the slow line going up. In our trade example, the Bullish cross already occurred.

Ok, now that we are in a trade, we must manage it and find a way to minimize risk but at the same time, let a winner run for as much as possible. For this we will use a Trailing Stop Loss, but first things first: our Stop Loss goes behind the Support or Resistance level created by price while it was confined in the Bollinger squeeze. Here is the picture:

As for the Take Profit, that will not be predefined before we enter the trade, but when the trade moves in our favor by the same amount of pips as our original Stop Loss, we will move it to break even and set a Trailing Stop Loss of the same amount of pips. Here is an example: if for our trade we use a Stop Loss of 20 pips, when price moves in our favor by 20 pips, we will move the Stop Loss in the same place where our entry was (now we cannot lose anything on this trade) and set a Trailing Stop Loss of 20 pips. Using this technique, we will be in the trade for as long as price continues to move in our direction without retracing for 20 pips. If it retraces 20 pips, The Trailing Stop will close it automatically. Remember, our Trailing Stop stays 20 pips behind price as long as price moves in the desired direction, locking in profit.

Bollinger and MACD strategy summary:

Entry rules:
1.Wait for the Bollinger Bands to squeeze close together, with price inside them.
2.Look for a breakout in any direction.
3.MACD must agree with the direction taken by price and must have a previous cross that also agrees with our direction.

Exit rules:
1.Stop loss goes behind the Support or Resistance created by price during the Bollinger squeeze, enough pips away to give the trade some room to move.
2.Move to break even once the trade moved in our direction by the same amount of pips as the original Stop Loss.
3.Set a Trailing Stop Loss of the same amount of pips as the original Stop Loss.

Bollinger and MACD strategy – advantages and disadvantages:
The MACD is sometimes lagging too much behind price and that can give a late signal, but on the other hand, the signal is pretty accurate in normal market conditions. However, this strategy just like all presented here must be thoroughly tested on demo accounts until you are comfortable with the rules and you see that it is profitable.