Saturday, September 30, 2017

Gold Is Approaching A Support Zone


During the last three weeks Gold formed a significant pullback from the local high at 1357.45, which it had reached for the last year and one could almost believe it would reach 1375.11 which is the high from July 2016. The precious metal, however, failed to break out above the resistance at 1357.50 and literally dropped with 870 pts.

There is a chance for Gold to meet a strong support in the zone around 1270 – 1265 and to rebound from it, renewing  the upward trend.

In the alternate scenario it would break out below the above-mentioned support zone and I think that if that happens we could expect a drop almost to 1102.

I, personally, am more inclined to expect a renewal of the move north but let’s see what scenario the market will pick.

Friday, September 29, 2017

USD/CAD Could Possibly Form A Doji Bar On The Monthly Time Frame

As I thought it would, USD/CAD reached 1.2450 and it even rose above that level to 1.2470 and in that zone it formed its first small correction, visible on the D1 time frame, before it tested and attempted to break out above 1.2500. At the moment the pair is trading little above 1.2500 and if the breakout is successful and the pair remains above that level, it will rally to 1.2550 – 1.2600.



More importantly, September is all but over and how the market closes today will be vital for how the monthly bar will close.

What we can see on the monthly time frame is a doji bar which has a serious chance to close above the support I’ve marked with a thick blue line.

Further back there is another doji bar that has closed at the same level.

I think that we can expect a continuation of the move to the upside, but up to where – that can be considered after we see how the monthly bar closes.

Thursday, September 28, 2017

The EUR/USD Correction Began, We Could Expect A Drop To Around 1.1480

EUR/USD began the expected correction, albeit quite hesitantly.

For the moment the drop is a little over 390 pips and is at 23.6% Fibo of the rally that began on 22nd February 2017.


The impulse rally has very clearly formed 1-2-3 (blue) waves, and that means that the current drop is part of the development of the fourth wave. I think we could expect a drop to around 1.1480, which is 38.2% Fibo of the impulse rally of the third wave. It’s still hard to tell what form the fourth wave will take – after it develops at least partially that will become clearer.

Either way, the pair has not stopped moving to the upside, and I think that after the end of the correction the rally will be renewed. Of course, this is just one of the possible scenarios, but I think it is the most probable one.


Tuesday, September 26, 2017

USD/JPY Is Forming A Flag And We Can Expect A Rally



USD/JPY formed a perfect flag with the pair reaching the trend lines of support and resistance four times and it even managed to break out above it.

The height of the flag at its base is 108 pips, which means that if it reaches its limit the pair should rise to 113.40.

If we examine the pair on the weekly time frame, we will notice that that is exactly the zone of the weekly resistance. I think it is logical to expect that the pair will aim for it and reach it.
If it manages to break out above the resistance after the inevitable correction, I think we can expect a continuation of the long term rally to 118.00 or even higher.

Of course, the market could have a different idea and form yet another drop.

Obviously, we need to be exceedingly careful when the pair is in that zone and we should observe what sort of figures and patterns it will draw.

Monday, September 25, 2017

GBP/USD May Continue Rallying To 1.41

After GBP/USD broke out above the upward trend channel around 1.3430 the pair has remained range-bound right above resistance trend line for ten days. This trend line is obviously turning into a support and for the moment it’s withstanding all attempts to test it, as it can be observed on all time frames – from the D1 to the H1 and M30.


The height of the trend channel at its base is around 730 pips. It is logical to expect a further move to the upside for another 730 pips in favour of the GBP, which means that if the pair does not break out below the trend line again, it could reach 1.41.

On the other hand, I think the target to the downside is around 1.3300 – 1.3250. In my opinion, however, such a movement would be corrective only as the trend appears bullish for the moment.


Saturday, September 23, 2017

USD/CAD Began A Correction, There Could Be A Move To The Upside To 1.2550 - 1.2600

USD/CAD is behaving in the typical way a pair behaves in after it reaches and breaks out below the support marked by the Bollinger Bands indicator. I have observed that behavior thousands of times and I can say with a great degree of certainty that such behavior is, indeed, typical – the pair reaches the support, breaks out below it, and just when the trader thinks that the depreciation will continue, there is a rebound. That applies to all time frames – from the M5 to the monthly one.

The only difference is in the duration and the depth of the correction in terms of pips. In this case we are examining the monthly time frame, which explains the considerable rebound – 270 pips until now.


If we examine the W1 time frame, we will notice something both interesting and important: at the bottom of the move to the downside there is a spinning top bar, which is a strong signal for a reversal.

In my opinion, 1.2430 – 1.2450 is the first target of the rally. In case USD/CAD continues moving north we could expect it to reach 1.2550 - 1.2600.

Friday, September 22, 2017

EUR/USD Is Range-bound And Cannot Pick A Direction

After the pair reached the local high at 1.20924 – which is the highest high since 4th January 2015 - the pair dropped with about 70 pips and remained within the range which has continued for two weeks now.

I expected a quicker move to the downside, but it is obvious that the bulls refuse to give way so quickly, and the bears aren’t active enough.


If we look at the monthly time frame we’ll notice that the pair is at a very strong support level, and it is not certain that it will break out below it.

Which are the most probable scenarios?

The pair could test of the local high at 1.20924 and even 1.2100 before it reaches a new high at 1.2150.

The next possible scenario is a lengthly range and the formation of a double or a triple top and then a corrective drop to 1.1750 and 1.1500.

A rally to the upside above 1.2150 seems less likely without a correction first, but still, let’s see which scenario the market will pick.


Thursday, September 21, 2017

USD/JPY Reached A Strong Resistance And We Can Expect A Correction



After FOMC kept the interest rate as it was and their press conference yesterday, which served as a catalyst for the movement of this and other pairs related to the USD, USD/JPY rallied with almost 150 pips. The pair reached the resistance zone around 1.1270 – 1.1280 and it seems that the rally won’t continue without a correction first.

The bars at the end of the rally are hinting that we could expect a drop, the first support being in the zone around 111.90 – 111.70.

The 111.10 level (the green line) is critical to the pair's rally.

Despite all that, I think that the depreciation is corrective and after the end of the correction there will be a renewal of the rally and a test of 114.00.


Tuesday, September 19, 2017

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Monday, September 18, 2017

The Forex Calendar For This Week



This week FOMC will announce the US Federal Funds Rate, but apart from that there will also be several other high impact news events that traders should watch out for because they always cause a lot of volatility on the market:

On Monday there is a speech by the Bank of England Governor Mark Carney and the announcement of the Reserve Bank of Australia Meeting Minutes.

On Tuesday will be released the US Building Permits.

On Wednesday will be announced the abovementioned US Federal Funds Rate, and there will also be a FOMC Statement, FOMC Economic Projections, FOMC Press Conference and an announcement of the US Crude Oil inventories.

On Thursday we can expect a speech by the Reserve Bank of Australia Governor Lowe, the US Unemployment Claims and a Bank of Japan Press Conference.
On Friday will be announced the Canadian CPI m/m and the Canadian Core Retail Sales m/m.