GDMFX - Daily News

[GDM_FX]

Forex Technical Analysis: Clash with support

EUR/USD
Forex Technical Analysis: The pair moved to the south for almost the entire duration of Friday’s trading session on the back of Euro weakness generated by a worse than expected German Producer Price index and the bears scored the first victory in a long time.

Technical Outlook
The level located at 1.3570 was broken to the down side and the sellers had the strongest day in a long while. If this bearish momentum will turn into a trend reversal, the first target is the support located at 1.3520. For today we anticipate slow price action, with a potential re-test from below of the recently broken level, followed by continuation of Friday’s bearish direction.

Fundamental Outlook
The Euro Zone Sentix Investor Confidence will be released today at 08:30 am GMT with an anticipated increase from the previous 6.5 to 10.9. This is a leading indicator of economic health based on the opinions of investors and analysts who are highly informed due to the nature of their jobs so higher than expected numbers usually strengthen the Euro.


GBP/USD
United Kingdom’s economy is not growing at “a sustained pace” as BoE Governor Mark Carney commented last week and this was reflected in the market, generating the recent drop.

Technical Outlook
Early during Friday’s trading session we experienced an almost perfect re-test from below of the level located at 1.6170, followed by a bounce lower. The pair dropped almost 170 pips and the bears are in control at the moment, aiming for the first support, located at 1.5960. Today we expect a “clash” with this level which is very important for future direction as we may witness a trend reversal and a shift in the balance of power.

Fundamental Outlook
The United Kingdom doesn’t release today any major economic or financial data so the pair’s movement will mostly be driven 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.

More articles from the best forex broker.

 

[GDM_FX]

The Forex Market: Price direction highly dependent on US crisis developments.

EUR/USD
The Forex Market: Monday was a slow day, with price moving inside a 50 pip range, above and below the level of 1.3570 and neither the bulls nor the bears showed clear signs of strength. The Euro Zone Sentix Investor Confidence came out worse than anticipated and stopped the initial movement to the upside.

Technical Outlook
Yesterday’s price action doesn’t reveal a lot of hints about future direction and 1.3570 still remains the most important level for short term movement. A break to either side may decide the day’s bias but at the moment the pair is trading in a range so we might see more sideways movement. However, the US political turmoil may bring the Dollar lower.

Fundamental Outlook
At 10:00 am GMT the German Factory Orders are released with an anticipated increase from -2.7% to 1.2%. Better than expected numbers usually strengthen the Euro because the indicator offers insights into the activity of the Production sector which is an important part of the German economy.


GBP/USD
The Pound strengthened yesterday on the back of increased optimism among investors. This shows the underlying strength of the bulls and the fact that even if a reversal is taking place, moves to the upside are still very possible.

Technical Outlook
Yesterday’s bullish movement can be considered just a retracement to the latest fall, a good place for the bears to start selling again. If the pair resumes its bearish movement, the first level of interest will be 1.6000 where a double bottom has formed. To the upside, the area near 1.6170 acts as a strong resistance zone.

Fundamental Outlook
The United Kingdom doesn’t release today any notable economical or financial indicators so price action will mostly be influenced by the technical aspect and by the US political situation.

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: Caution rules the market. For how long?

EUR/USD
The Forex Market: The pair continued its slow movement throughout yesterday’s trading session, finishing the day within a 50 pip range. Some analysts expected the US Non Farm Employment report to be released yesterday but this didn’t happen and the exact date is still not known.

Technical Outlook
Price tried to move away from the level of 1.3570 but neither the buyers nor the sellers seem to want to make a decisive move and everyone is cautious at the moment. Yesterday’s price action created resistance at 1.3605 and 1.3520 still remains support. The level of 1.3570 is changing rapidly from support to resistance and vice versa but it doesn’t seem to have a lot of rejecting-power anymore.

Fundamental Outlook
The German Industrial Production indicator is released today at 10:00 am GMT with an anticipated increase from -1.7% to 1.1%. Better than expected numbers are beneficial for the Euro and may take the pair higher. Later in the day, at 6:00 pm GMT the FOMC will release the Minutes of their latest meeting, containing the details of their votes on the Interest Rate and also the reasons that influenced the vote. This event usually creates volatility and strong movement so we recommend caution.


GBP/USD
The pair had an active but mixed trading session yesterday. After an initial bearish impulse, the buyers took control and took price higher. However, this second impulse was reversed later in the day and price finished close to the daily open.

Technical Outlook
We favor a move lower, towards 1.6000 but at the same time, we acknowledge the fact that price is trading inside a range and another move towards 1.6170 is possible. Direction is not clear at the moment and trading is made difficult by the US political turmoil and Dollar indecision. A break or at least touch of either one of the mentioned levels may trigger some interest and a clear direction.

Fundamental Outlook
The most important UK event of the day is the release of the Manufacturing Production which makes up for about 80% of the entire Industrial Production and thus holds a great importance. The release is scheduled at 08:30 am GMT and the anticipated value is 0.3%, a slight increase from the previous 0.2%. The US events will 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.

More articles from the best forex broker.

 

[GDM_FX]

Slow Moving Averages Crossover Strategy
Remember the article about the Moving Averages and their use in trading? Now we are going to explain a pretty simple strategy that makes use of three Simple Moving Averages with different settings to identify high probability trades. Among all types of Moving Averages, the Simple MA is one of the slowest. We use a slow MA so we can avoid false signals; in fact, we will use three MAs: one with a period of 7, one with a period of 14 and the third with a 21 period. The first MA is the fastest of all the three and this one will give us the signal to trade when it goes through the 14 SMA and continues through the 21 period SMA. If it goes up through both the other two Moving Averages we will open a Buy trade on the currency pair and if the 7 period Moving Average will go down through both the other two, we will open a Sell trade. An important rule is that we have to wait for the close of the candle corresponding to the crossover before actually opening the trade. Here is an example:

On the chart you can see the three Simple Moving Averages and their respective color. The green MA is our signal line and at point “1” it crosses both the red and the blue MAs. Since in our example it crosses them downwards, we will place a Sell trade at the close of the candle corresponding to the crossover. Pretty simple, I hope. Now let’s talk about Stop Loss and Take Profit levels: our Stop Loss should be set a few pips behind the crossover point, or we should exit the trade manually if an opposite crossover occurs. This is valid for the Take Profit level as well: we should always exit a trade if an opposite crossover occurs, not at predefined levels. This will allow us to pocket huge profits relative to our stop loss. There is another important aspect of this strategy that must be discussed: never enter a trade if the 7 SMA does not have a steep angle, agreeing with our trade direction. So, if we are looking for a short trade, the 7 SMA must be pointing downwards at a steep angle at the moment of the crossover. Here is a zoomed in chart:

This rule will keep you out of some of the bad trades, because the strategy is prone to false signals during ranging markets. However, you will still get a lot of loses with the Slow Moving Average strategy, but once you are comfortable with it and start accumulating some experience, you will learn to identify the best trades.

Slow Moving Averages Crossover strategy – Advantages and disadvantages
Well, the weakest spot of this strategy is definitely the ranging market, when price has no volatility and no direction; the three Moving Averages will be tangled and a lot of crossovers will occur. But don’t let it discourage you; the losses will be very small because the SMAs will crossover in the opposite direction, telling you to exit the trade. This takes us to the advantage: the losses are small and the wins can be very big, which is an essential characteristic of a good strategy. Before you start using it you should back test it to get accustomed to its minor details and better learn to use it. A good advice is to use the higher time frames, a fact that will generate fewer signals, but this can be compensated by trading multiple currency pairs and taking only the best looking signals.

 

[GDM_FX]

The Forex Market: US Dollar builds momentum, anticipating a debt crisis solution.

EUR/USD

The Forex Market: The greenback showed signs of recovery during yesterday’s trading session as US leaders struggled to find a solution to the debt crisis and some progress was made. The pair dropped below 1.3520 and the entire day was controlled by the bears.

Technical Outlook

The support located at 1.3520 was broken yesterday but this happened before, on several occasions and price returned above it so before we consider this a clear break, we must see a re-test. At the moment price approached the level from below and the re-test we talked about might be underway. If price doesn’t move back above 1.3520, we may see the pair heading into the support zone created around 1.3450 – 1.3460, but as we already saw, any news related to the US crisis can create strong moves which will break support and resistance levels.

Fundamental Outlook

The Euro Zone Consumer Price Index will be released today at 09:00 am GMT with no change anticipated from the previous 1.1%. The CPI is the primary tool the ECB uses to gauge inflation and values outside a certain range may determine an Interest Rate adjustment. Higher values usually strengthen the Euro and drive the pair higher.


GBP/USD

United Kingdom’s Consumer Price Index came out yesterday better than anticipated, a fact which initially strengthened the Pound but US optimism took the pair lower afterwards. The trading day was characterized by a sharp reversal after a touch of support.

Technical Outlook

The support located at 1.5915 acted as a perfect barrier in front of falling prices, stopping the bearish momentum. The resistance located at 1.6300 is now threatened once again but lately the pair is just ranging between the two mentioned levels, lacking a clear direction. Probably once an accord is reached by US lawmakers, we will finally see more determination from either the bulls or the bears.

Fundamental Outlook

Early at 08:30 am GMT the United Kingdom releases the Claimant Count value which represents the change in the number of unemployed people compared to the previous month. Lower numbers suggest that jobs are easier to obtain, which is a sign of a thriving economy and thus are beneficial for the Pound; today’s forecast is -24.3K and the previous value was -32.6K. Of course, the US debt crisis will continue to have a direct impact on this pair as well.

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]

Forex Technical Analysis: The calm after the storm.

EUR/USD

Forex Technical Analysis: The US Dollar weakened the most in about a month on the back of speculation that Fed will not taper the stimulus program soon because although the debt crisis is over, its repercussions will hinder future economic growth.

Technical Outlook

Yesterday’s events took the pair significantly higher and broke through 1.3650 resistance. The pair is now headed for the crucial level located at 1.3710 which represents the year’s high and due to its importance, it might reject prices lower or at least it won’t be broken on the first attempt. The pair experienced an extremely strong move, without any retracement so it may be possible to have a slow day, with price moving close to 1.3710.

Fundamental Outlook

Today lacks important economic or financial data releases from both the US and the Euro Zone so price action will most likely be driven by traders’ sentiment and any unscheduled news releases.


GBP/USD

The pair moved even stronger to the upside than EUR/USD due to the fact that Pound started to strengthen immediately after the UK Retail Sales were released, posting a better value than anticipated. The weakening of the US Dollar on top of Pound strength was the final ingredient for a 230 pip rise.

Technical Outlook

The massive bull impulse was stopped by the resistance located at 1.6170. However, this stall cannot be attributed to the strength of resistance or bear pressure but rather to price exhaustion and the fact that it was reached in the evening (GMT time). After such a strong move, price is likely to stall or retrace a bit but we don’t anticipate significant moves to the downside, considering the tremendous bullish sentiment on the pair.

Fundamental Outlook

The United Kingdom doesn’t release any important data today but although the US debt crisis has ended, any unscheduled news coming out of the US will affect the pair.

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]

Forex News: All eyes on the US for the release of the Non-Farm Employment report.

EUR/USD

We experienced a slow Monday with price confined in a 40 pip range although the German CPI came out better than anticipated and the US Existing Home Sales, worse than expected. Usually this would take the pair higher but the market seems exhausted now after last week’s strong movement.

Technical Outlook

Although we had a slow day, price came very close to 1.3650 and bounced higher, confirming the fact that this level is now support. We anticipate a continuation of the bullish trend and a move close to 1.3710 but the day’s price movement will be highly affected by the US Non Farm Employment Change and the technical aspect will be somewhat secondary.

Fundamental Outlook

The main event of the day is the long-awaited release of the US Non Farm Employment report which was delayed due to the US government shutdown. The release is scheduled at 12:30 pm GMT and the anticipated number is 179K while the previous value was 169K. Higher numbers than expected suggest a thriving economy and increased job availability; usually this is perceived as bullish for the US Dollar and drives the pair lower.


GBP/USD

The pair’s movement was also sluggish and no major developments took place although the US Existing Home Sales numbers were worse than anticipated.

Technical Outlook

The pair moved slightly below 1.6170 but we don’t consider this a true break because it occurred on low volatility and at the moment, the bearish pressure is not very strong. However, price does seem exhausted and probably a move lower is needed before the pair will become appealing to the buyers again. An accurate technical prediction is hard to be made considering the important economic event scheduled today but the main levels to watch are 1.6170 and the resistance located at 1.6250.

Fundamental Outlook

The United Kingdom doesn’t release any important economic or financial data today so all eyes will be on the US Non Farm Employment report which is very likely to be a major market mover.

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]

Forex News: Taking a breather after the recent turmoil.

EUR/USD

The much anticipated US Non Farm Employment report came out yesterday significantly worse than anticipated and generated massive US Dollar weakness which resulted in a strong move to the upside and a new yearly high.

Technical Outlook

The important level of 1.3710 which previously represented the year’s high was broken decisively during yesterday’s strong rally. The US economy is severely affected by the latest political turmoil and this is easily seen on the charts; the buyers are in clear control and we anticipate this momentum to continue. However, yesterday’s strong move determined the Relative Strength Index to cross into overbought territory and a retracement lower or a stall is very likely especially because after a high-volatility day, price tends to take a “breather”, moving slowly the next day.

Fundamental Outlook

The day lacks important economic releases from both the US and the Euro Zone so price will be mostly driven by the technical aspect but as we mentioned before, we may see a slow, ranging day.


GBP/USD

The US Dollar weakness triggered by the Non Farm Employment report generated trend resumption for the pair and 1.6170 was again broken to the upside.

Technical Outlook

At the moment the resistance located at 1.6250 sits in front of rising prices; in the past this level proved to be a strong barrier but this time the bulls seem to have strong impulse behind them, generated by the fundamental events so we may see a break to the upside. If this is the case, the next resistance is located at 1.6300 and support sits at 1.6170.

Fundamental Outlook

The Minutes of the latest Bank of England Meeting are released at 08:30 am GMT, containing details about the votes of the Monetary Policy Committee members regarding the Interest Rate decision and Asset Purchase Facility value. Also, the Minutes contain important insights into the reasons that determined the members’ votes and future economic outlook. An optimistic outlook will probably strengthen the Pound even more and take the pair above resistance.

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: Are the bulls prepared for another high?

EUR/USD

The Forex Market: The pair experienced a mixed day, with no clear direction and not a lot of volatility but this was expected after the strong rally seen a day before. No economic data was released and this contributed to the slow movement.

Technical Outlook

The pair took a breather yesterday and even retraced lower so it seems like the bulls are prepared to make another push to the upside. Minor resistance was created at 1.3790, the level which stopped the initial strong rally so breaking this barrier will be the buyers’ first task. Yesterday’s retracement created a level of interest to the downside, at 1.3740 but our bias is bullish and we consider that moves to the downside will be stopped by this minor support.

Fundamental Outlook

Early at 07:30 am GMT the German Manufacturing Purchasing Managers’ Index is released, with an anticipated increase from the previous 51.1 to 51.6. This is a leading indicator of economic health focused on the Manufacturing sector and derived from the opinions of about 500 purchasing managers so better than expected values usually strengthen the Euro.

The US will release at 2:00 pm GMT the New Home Sales numbers which offer insights into the housing market and consequently into the state of the economy because usually new homes are purchased in times of prosperity. The anticipated number is 427K, an increase from the previous 421K.


GBP/USD

Yesterday’s release of the Bank of England Meeting Minutes revealed the fact that all members of the Monetary Policy Committee voted against a Rate increase and this triggered Pound weakness so 1.6170 was touched again.

Technical Outlook

The resistance created at 1.6250 rejected prices lower and now a triple top is formed at this level. This is a very strong bearish pattern and it will be difficult for the bulls to overcome it but at the moment the level of 1.6170 is more important as price is sitting very close to it and market indecision is present. Minor support sits at 1.6115 and this will become the first target if price remains below 1.6170.

Fundamental Outlook

The United Kingdom didn’t schedule any important economical or financial data releases for today so the pair’s movement will be mostly driven by the US events and by the technical aspect of the market.

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: Increased probability of a bearish retracement.

EUR/USD

The Forex Market: The economic data released yesterday was mixed and with no substantial differences compared to the anticipated figures. This translated into a rather slow day, with no clear direction but price remained above the minor resistance located at 1.3790.

Technical Outlook

Although the pair is still advancing, its movement has definitely slowed and it appears the bulls are starting to fade away. Yesterday the minor resistance located at 1.3790 was broken to the upside but afterwards, price didn’t move as strongly as we would expect after a true break and that’s a sign that lower prices are a distinct possibility but keep in mind that the uptrend is still intact and the underlying strength still belongs to the bulls.

Fundamental Outlook

At 08:00 am GMT the German Ifo Business Climate indicator will be released, with a small increase anticipated, from the previous 107.7 to 108.2. This survey is highly respected mostly due to its large sample size of about 7,000 businesses and also due to the fact that the German economy is the backbone of the Euro Zone economy.

Later at 12:30 pm GMT the US Durable Goods Orders will be announced; these are goods with a life expectancy of at least three years and orders for this type of goods usually increase in times of economic prosperity because a larger investment is needed for such a purchase. The anticipated value is 1.7%, a hefty increase from the previous 0.1%.


GBP/USD

No major developments took place yesterday and the pair moved above and below the level of 1.6170 but neither the bulls nor the bears could impose their will in a decisive manner.

Technical Outlook

Yesterday’s price action provides little clue about future direction but at the moment, the pair is trading above 1.6170. Once price moves away decisively from this level we will probably see a break of either the resistance located at 1.6250 or the support at 1.6115; if this scenario unfolds, we will possibly see a continued move in the direction of the break but until then, this should be considered a ranging market.

Fundamental Outlook

United Kingdom’s Preliminary Gross Domestic Product is released today at 08:30 am GMT and its value is expected to increase from the previous 0.7% to 0.8%. Most components of the GDP are known in advance and this makes it easier to forecast the actual value but the importance of the release remains very high. Better than expected values are beneficial for the Pound and may take the pair higher.

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.