Price & Time: Key Levels to Watch Around the Central Bank Decisions

EUR/USD rebounds off an Andrews line

AUD/USD potentially tracing out a more important bottom

GBP/USD needs to overcome 1.5725 to signal the start of a more important move higher

Foreign Exchange Price & Time at a Glance: forex technical analysis,forex analysis,forex trading strategies,forex signals,forex strategies,forex strategy, forex trading

Price & Time Analysis: EUR/USD

• EUR/USD traded to its lowest level in over a month Tuesday before finding support at an Andrews line in the 1.3160 area
• Our near-term trend bias is negative on the exchange rate while below 1.3300
• The Andrews line at 1.3160 is now a key level of focus with weakness below ideally on a closing basis needed to signal a downside resumption
• A medium-term turn window is eyed around the second half of next week
• Strength back over the 1.3300 50% retracement of the August to September decline would turn the outlook back to positive

EUR/USD Strategy: Like selling into strength over the next few days.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
EUR/USD	1.3130	*1.3160	1.3200	1.3240	*1.3315

Price & Time Analysis: GBP/USD

• GBP/USD has moved steaduly higher since finding support on a closing basis last week at the 1x1 Gann angle line of the year-to-date high
• While over 1.5460 our near-term trend bias will remain higher
• The 78.6% retracement at 1.5655 is the next minor upside pivot, but strength over 1.5725 is really required to signal the start of a more important move higher
• A minor cycle turn window seen at the end of the week
• The 50% retracement of the late August decline is near-term support, but only weakness below the 1x1 Gann line at 1.5460 undermines the postive structure in Cable

GBP/USD Strategy: Like buying on weakness next week.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
GBP/USD	*1.5460	1.5570	1.5605	1.5655	*1.5725

 

Price & Time Analysis: USD/CAD

• USD/CAD has struggled to overcome resistance at the 1x2 Gann angle line of the of the 2012 closing low in the 1.0560 area
• However, while above the 50% retracement of the July range at 1.0425 our near-term trend bias is higher in the rate
• The 1.0560 remains a critical near-term pivot with strength above required to unlock critical resistance at 1.0610 and above
• A minor cycle turn window is seen early next week
• Weakness below 1.0425 on a closing basis would turn us negative on Funds

USD/CAD Strategy: Like the long side while above 1.0425

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
USD/CAD	*1.0425	1.0465	1.0480	1.0560	*1.0610

 

Focus Chart of the Day: AUD/USD

In previous Price & Times we have written about the potential importance of the early August low as this time period holds a clear Fibonacci time relationship with several important lows of the past 4 years. Last week’s inability to break under .8845 further confirms its importance and raises the possibility that a larger bottoming process is unfolding. Traction over .9230 especially on a weekly closing basis would be further confirmation of this scenario. Only unexpected weakness below .8845 would completely undermine the positive potential time cycle relationship. 

 

Source: http://dld.bz/cPmSk

FOREX: What Is It And How Does It Work?

The Foreign Exchange market, also referred to as the "Forex" is the biggest and largest financial market in the world. It has a daily average turnover of US$1.9 trillion- just imagine that amount of money! Don't you want to join this trillion-dollar industry?

Forex is the simultaneous buying of one currency and selling of another. Currencies are traded in pairs, for example Euro/US Dollar (EUR/USD) or US Dollar/Japanese Yen (USD/JPY). So basically, Forex is trading.   There are two reasons to buy and sell currencies. About 5% of daily turnover is from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign currencies into their domestic currency.   The other 95% is trading for profit, or what you call speculation. Investors frequently trade on information they believe to be superior and relevant, when in fact it is not and is fully discounted by the market.   On one side of each speculative stock trade is a participant who believes he has superior information and on the other side is another participant who believes his information is superior.   For speculators, the best trading opportunities are with the most commonly traded (and therefore most liquid- meaning its in cash or convertible to cash) currencies, called "the Majors." Today, more than 85% of all daily transactions involve trading of the Majors.   A true 24-hour market, Forex trading begins each day in Sydney, and moves around the globe as the business day begins in each financial center, first to Tokyo, London, and New York. Unlike any other financial market, investors can respond to currency fluctuations caused by economic, social and political events at the time they occur — real time- day or night.   The Forex market is considered an Over The Counter (OTC) or 'interbank' market. This is because the transactions are conducted between two counterparts over the telephone or via an electronic network. Trading is not centralized on an exchange compared to stocks and futures markets.  Understanding Forex quotes   Reading a Forex quote may seem a bit confusing at first. However, it's really quite simple if you remember two things: 1) The first currency listed first is the base currency and 2) the value of the base currency is always 1.   The US dollar is the centerpiece of the Forex market and is normally considered the 'base' currency for quotes. In the "Majors", this includes USD/JPY, USD/CHF and USD/CAD. For these currencies and many others, quotes are expressed as a unit of $1 USD per the second currency quoted in the pair. For example, a quote of USD/JPY 110.01 means that one U.S. dollar is equal to 110.01 Japanese yen.   When the U.S. dollar is the base unit and a currency quote goes up, it means the dollar has appreciated in value and the other currency has weakened. If the USD/JPY quote we previously mentioned increases to 113.01, the dollar is stronger because it will now buy more yen than before. The three exceptions to this rule are the British pound (GBP), the Australian dollar (AUD) and the Euro (EUR). In these cases, you might see a quote such as GBP/USD 1.7366, meaning that one British pound equals 1.7366 U.S. dollars.   In these three currency pairs, where the U.S. dollar is not the base rate, a rising quote means a weakening dollar, as it now takes more U.S. dollars to equal one pound, euro or Australian dollar. In other words, if a currency quote goes higher, that increases the value of the base currency. A lower quote means the base currency is weakening.   Currency pairs that do not involve the U.S. dollar are called cross currencies, but the premise is the same. For example, a quote of EUR/JPY 127.95 signifies that one Euro is equal to 127.95 Japanese yen.   When trading Forex you will often see a two-sided quote, consisting of a 'bid' and 'offer'. The 'bid' is the price at which you can sell the base currency (at the same time buying the counter currency). The 'ask' is the price at which you can buy the base currency (at the same time selling the counter currency).

Source: http://www.earnforex.com/articles/forex-what-is-it-and-how-does-it-work

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