Two Ways to Trade Gold

Fast moving markets are known to have periods of consolidation after the conclusion of a strong move. Thus is the case with Gold (XAU/USD) seen below after a sharp $375.81 decline.These periods may come in many forms on your chart, but one of the most recognizable patterns of consolidation is the symmetrical triangle. These charting patterns occur when current levels of support and resistance are seen converging on our chart. With this in mind we will further examine the price of gold, and identify two ways to trade symmetrical triangles.

Learn Forex –Gold Daily Triangle

The first method of trading a symmetrical triangle is to wait for price to breakout from current levels of support and resistance. This can be useful for gold traders thats don’t have to have a clear opinion of future market direction. Traders can trade a breakout in either direciton by setting up an OCO order. Traders can plan to sell a break of support and trade the pair to new lows under .$1.338.06. At the same time traders can look to buy a price break above resistance on a breakout to a new high above $1,423.71. In the event that price moves back inside the triangle Stop orders can be placed on both entries in the center of the triangle pattern, to limit risk exposure in the event of a false breakout.

Learn Forex –Gold Breakout Strategy

The second method of trading a triangle is a simple strategy designed to trade between the outlined levels of support and resistance that make up our charting pattern. Again using our example on gold, this time pictured on a 4 hour chart, we can see price approaching the upper boundary of our triangle that is currently action as a line of overhe3ad resistance. Traders looking to trade the interior of a triangle may consider setting entries to sell gold at this point. Likewise if price dips to support traders can repeat the process and set entries to buy. Once entry orders are set, stops should then be placed outside of either support or resistance. In the event that price breaks from these predefined levels traders should exit any existing positions and begin looking for new opportunities.

Learn Forex –Gold Retracement Strategy

Regardless of where price action ends up on gold, identifying a symmetrical triangle can allow traders to choose from a variety of trading strategies. Remember, the key for trading triangles is to first identify levels of support and resistance. Then, traders can set their risk and manage positions until the pattern concludes.

 

Source: http://dld.bz/cE6yn

USD/JPY Struggles to Retake 95 Despite Biggest S&P 500 Rally in 2013

 

 

The yen crosses were one foot into a serious bearish breakdown before the strongest US equity rally this year revive the troubled carry trade. Yet, after the dust settled on this exceptional risk appetite revival, we find the USDJPY is still struggling to hold its head above 95. In early trade Friday, Japanese markets tempered the carry over optimism from the New York session and troubling volatility stirred once again.

 

Is this simply localized trouble or representative of trouble in global sentiment trends? We discuss the USDJPY and yen crosses as well as the broader trade opportunities for the FX and capital market world should risk appetite hold up or falter in today's video.

 

 

Source: http://dld.bz/cEzy5

Price & Time: Looking for a USD/JPY Low

Foreign Exchange Price & Time at a Glance:

USD/JPY:

 

-USD/JPY broke below the 1x1 Gann angle line of the February low on Thursday and traded to its lowest level since early April

-The move below 95.00 has shifted our bias to negative, but caution is advised here as the cyclical picture begins to turn more positive later today

-The 88.6% retracement of the April to May advance and the 10th square root progression of the year’s high in the 93.55/85 area is critical support and weakness below is needed maintain the immediate downside tack

-Medium-term cycle turn window is in effect over the next couple of days

-The 8th square root progression of the year-to-date high near 95.55 is key resistance and move over this level is required to turn the technical picture positive

Strategy: Cycles suggest a turn could materialize over the next couple of days. As such, don’t like chasing the downside here. Will look to go long if price action confirms a turn.

USD/CAD:

 

-USD/CAD broke below the 1.0165 61.8% retracement of the May range on Thursday and touched its lowest level in almost a month

-Our bias remains lower in Funds, but a close below 1.0165 is needed to set up further weakness towards 1.0115 and below

-The cyclical picture continues to favor general weakness into the middle of next week

-The 2nd square root progression of the year-to-date high near 1.0215 is immediate resistance

-However, only aggressive strength over the retracement confluence at 1.0265 alters the negative technical outlook and turns us positive on Funds

Strategy: Like the short side while the rate is below 1.0260.

GBP/USD:

 

-GBP/USD broke above the 7th square root progression of the year-to-date low on Thursday to trade to a new multi-month high

-Our bias remains higher in Cable with traction over the 5th square root progression of the year-to-date high at 1.5705 needed to prompt a push towards a critical resistance cluster between 1.5760/90

-Near-term cycle studies favor strength into next week

-The 1.5585 area is immediate support

-However, only weakness under the 1x1 Gann angle line of the March low around 1.5550 would signal a turn in the rate

Strategy: Longs favored while over 1.5550.

Focus Chart of the Day: S&P 500

The S&P 500 undercut a key support level at 1605 last week before turning higher to overcome key resistance at 1630. Such action is usually indicative of an upside resumption. The index’s failure, however, to gain much upside traction these past few sessions now puts it in a precarious position. Weakness below last week’s 1597 low on a closing basis over the next day or so will put the index on the back foot and improve the odds for an important decline into the long-term cyclical turn window expected around June 20-25. However, medium-term cycles seem to favor an attempt at a low over the next day or so. Back over 1630 needed to confirm a base. 

 

Source:  http://www.dailyfx.com/forex/technical/article/forex_strategy_corner/2013/06/13/PT_jpy_low.html

Dollar Hits 2-Month Low vs. Yen, Eyes Retail Sales Data for Help

The US Dollar looks to May’s Retail Sales report for Fed stimulus reduction clues after hitting a two-month low against the Japanese Yen amid risk aversion.

Talking Points

• Yen Soars, Aussie and Kiwi Dollars Drop as Risk Aversion Strikes in Asia
• Markets Look to May’s US Retail Sales Data to Guide Fed QE Taper Bets

The Japanese Yen outperformed while the yield-sensitive Australian and New Zealand Dollars plunged on the back of carry trade liquidation and flight-to-safety capital flows as risk aversion struck Asian markets anew. The MSCI Asia Pacific benchmark stock index fell nearly 3 percent en route to setting a year-to-date low. Japan’s shares again led the way lower among the region’s major bourses, with the Nikkei 225 shedding a staggering 6.35 percent.

The rout followed a dismal day on Wall Street that was compounded as the World Bank downgraded its economic growth outlook. The international lender said global recovery is “hesitant and uneven”, trimming its 2013 GDP expansion forecast to 2.2 percent from 2.4 percent predicted in January. The Kiwi bore the brunt of the selloff after the RBNZ said it intends to keep interest rates unchanged through the rest of the year despite expectations of rising trend in CPI inflation.

Looking ahead, all eyes are on May’s US Retail Sales report. Expectations call for receipts to rise 0.4 percent, marking an improvement from the 0.1 percent increase recorded in the prior month. Traders will interpret the outcome in terms of its implications for the timing of a cutback in the size of the Federal Reserve’s monthly asset purchases.

A strong outcome is likely to stoke expectations for a relatively sooner cutback in stimulus efforts, offering support to the US Dollar against most its major counterparts. USDJPY and to some extent USDCHF may prove to be exceptions as the negative risk appetite implications of a less accommodative FOMC weigh down the sentiment-linked pairs. Needless to say, a soft result will probably produce the opposite dynamic.

Capitalize on Shifts in Market Mood with the DailyFX Speculative Sentiment Index

Asia Session:

GMT	CCY	EVENT	ACT	EXP	PREV
21:00	NZD	Reserve Bank of New Zealand Rate Decision	2.50%	2.50%	2.50%
1:00	AUD	Consumer Inflation Expectation (JUN)	2.3%	-	2.3%
1:30	AUD	Employment Change (MAY)	1.1K	-10.0K	45.0K
1:30	AUD	Unemployment Rate (MAY)	5.5%	5.6%	5.5%
1:30	AUD	Part Time Employment Change (MAY)	6.4K	-	15.3K
1:30	AUD	Full Time Employment Change (MAY)	-5.3K	-	29.8K
1:30	AUD	Participation Rate (MAY)	65.2%	65.2%	65.3%
1:30	JPY	BOJ’s Shirai Holds Press Conference	-	-	-

Euro Session:

GMT	CCY	EVENT	EXP/ACT	PREV	IMPACT
6:00	EUR	German Wholesale Price Index (YoY) (MAY)	-0.1% (A)	-0.4%	Low
6:00	EUR	German Wholesale Price Index (MoM) (MAY)	-0.4% (A)	-0.2%	Low
7:15	CHF	Producer & Import Prices (YoY) (MAY)	-0.2% (A)	-0.1%	Low
7:15	CHF	Producer & Import Prices (MoM) (MAY)	-0.3% (A)	0.2%	Low
8:00	EUR	ECB Publishes Monthly Report	-	-	Medium

Critical Levels:

CCY	SUPPORT	RESISTANCE
EURUSD	1.3283	1.3414
GBPUSD	1.5605	1.5709

 

Source: http://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/euro_open/2013/06/13/Forex_Dollar_Hits_2-Month_Low_vs_Yen_Eyes_Retail_Sales_Data_for_Help.html

Choosing A Forex Strategy

Technical analysis and fundamental analysis are the two basic areas of strategy in the FOREX market which is the exact same as in the equity markets. However, technical analysis is by far the most common strategy that is used by individual FOREX traders.

Here is a brief overview of both forms of analysis and how they directly apply to forex trading:

Fundamental Analysis   If you think it's hard enough to value one company, you should try valuing a whole country instead. Fundamental analysis in the forex market is often an extremely difficult one, and it's usually used only as a means to predict long-term trends. However it is important to mention that some traders do trade short term strictly on news releases. There are a lot of different fundamental indicators of the currency values released at many different times. Here are a few of them to get you started:   * Non-farm Payrolls   * Purchasing Managers Index (PMI)   * Consumer Price Index (CPI)   * Retail Sales   * Durable Goods   You need to know that these reports are not the only fundamental factors that you have to watch. There are also quite a variety of meetings where you can get some quotes and commentary that can affect markets just as much as any report. These meetings are often brought out to discuss any interest rates, inflation, and other issues that have the ability to affect currency values.  Even changes in how things are worded when addressing certain issues such as the Federal Reserve chairman's comments on interest rates; can cause a volatile market. Two important meetings that you have to watch out for are the Federal Open Market Committee and Humphrey Hawkins Hearings. Just by reading the reports and examining the commentary, it can help FOREX fundamental analysts to get a better understanding of any and all long-term market trends and also to allow short-term traders to be able to profit from extraordinary happenings. If you do decide to follow a fundamental strategy, you will want to be sure to keep an economic calendar handy at all times so you know when these reports are released. Your broker may also be able to provide you with real-time access to this kind of information.   Technical Analysis   Just like their counterparts in the equity markets, technical analysts of the FOREX trading market analyze price trends. The only real difference between technical analysis in FOREX and technical analysis in equities is the time frame that is involved in that FOREX markets are open 24 hours a day.  Because of this, some forms of technical analysis that factor in time have to be modified so that they can work with the 24 hour FOREX market. Some of the most common forms of technical analysis used in FOREX are:   * The Elliott Waves   * Fibonacci studies   * Parabolic SAR   * Pivot points   A lot of technical analysts have a tendency to combine technical studies to make more accurate predictions on your behalf. (The most common method for them is combining the Fibonacci studies with Elliott Waves.) Others prefer to create trading systems in an effort to repeatedly locate similar buying and selling conditions.  Choosing Your Strategy   Most successful traders will develop a strategy and perfect it over a specific period of time. Some people will focus on one particular study or calculation, while still some others use broad spectrum analysis as a means of determining their trades. Most experts would likely suggest that you try using a combination of both fundamental and technical analysis, with which you can make long-term projections and also determine entry and exit points. Of course, in the end, it is the individual trader who has to decide what works best for him.  When you are ready to get started in the FOREX market, you should open a demo account and paper trade so that you can practice until you can make a consistent profit. Many people who fail have a tendency to jump into the FOREX market and quickly lose a lot of money because of a lack of experience. It is important to take your time and learn to trade properly before you start committing capital.   You also need to be ale to trade without emotion. You can't keep track of all stop-loss points if you don't have the ability to execute them on time. You must always set your stop-loss and take-profit points to execute automatically, and don't change them unless you absolutely have to. Make your decisions and stick to them. Otherwise you will drive yourself and your brokers crazy.   You should also realize that you need to follow the trends. If you go against the trend, you are just messing with your money because the FOREX market tends to trend more often than anything else and you will have a higher chance of success in trading with the trend.   The FOREX market is the largest market in the world, and every day people are becoming increasingly interested in it. But before you begin trading, make sure your broker meets certain criteria, and take the time to find a trading strategy that works for you.

Source: http://www.earnforex.com/articles/choosing-a-forex-strategy

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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