Wednesday, January 31, 2018

AUD/USD Is In A Strong Resistance Zone



On the weekly  time frame the pair is close to the resistance trend line of the flag that has been developing since 2016.

The pair has reached a strong resistance around 0.8124 – 0.8135. It tried to break out above in September 2017 but it was unsuccessful.

On the D1 time frame one can notice that the test of that resistance has lasted for several days and there is even a RSI divergence.

I think that a rally to the resistance trend line of the flag on the monthly time frame around 0.82 is possible, but if there is not breakout the pair will probably return within the consolidation and it will continue to develop the flag.  Obviously this is a key zone and we should follow closely the pair’s development in it.

Monday, January 29, 2018

USD/CAD Is In A Strong Support Zone


The pair has been consolidating within the support zone between 1.2280 and 1.2330 for a third day, while the RSI indicator on the H4 time frame has been developing a divergence.




Although I expect a continuation of the downward trend the probability to see a correction to the upside within the consolidation is quite large. If the limit of the RSI divergence is reached, then the correction could reach 1.2520.

I doubt that today we will see any significant movement, but we could follow how the D1 time frame bar will close in a few hours. If it closes as a spinning top or as a doji bar right above the support of the lower band of the Bollinger Bands that could be another signal for a rebound and a correction to the upside before the downward trend continues.


Saturday, January 27, 2018

USD/JPY Renewed Its Downward Trend



It is now very clear that at this stage there won’t be a USD/JPY rally. It appears that the bears finally took the initiative in their hands and the long term downward trend has been renewed.

If that assessment is correct, then instead of the expected rally to 119+ we may see a significant drop which could lead the pair to levels forgotten since 2013, i.e. 95.00 – 94.00 or even much lower.

The first support is around 108.00 - 107.50 and the pair may rebound from it to the upside to test the resistance zone around 109.50 – 109.00.

In case it breaks out below that first support the next strong support is the zone around 100.50 – 99.50.


Thursday, January 25, 2018

USD/CHF May Be Renewing Its Drop


There may finally be a breakout to the downside of the pennant that has been developing for six and a half years on the monthly USD/CHF chart.

This pair is truly unique in terms of the sheer stubbornness of the investors and especially of the Swiss Bank not to allow any further rally of their national currency. On the other hand, however, before the sharp drop of the US dollar compared to the other main currencies (such as the EUR, the GBP, the JPY) the inertia on the markets seems that it cannot be held back any more and this time there may not be a move the Swiss Bank may try that could stop the depreciation of this currency pair.

I think that if the limit of this pennant is reached we could expect a depreciation of the pair with 3000 pips, which means a long term movement south to 0.6700.


Wednesday, January 24, 2018

EUR/USD Is Forming A Typical Elliott Wave Theory Impulse


I have marked the possible waves and sub-waves of the impulse to the upside in red and blue and if my assessment is correct at the moment the pair should be forming the third (blue) sub-wave of the fifth wave (in red).

Of course, this is an assessment of the W1 time frame, which means that the upward trend should continue developing over the course of weeks or even months.

At the moment it is difficult to ascertain which scenario the EUR will follow as it moves north, only the market can decide that. In my opinion, the rally without a significant correction could continue to 1.2450 - 1.2500 and above which is still within the strong resistance zone (marked in red).

Tuesday, January 23, 2018

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Monday, January 22, 2018

GBP/AUD May Be Preparing To Renew Its Rally


The bars on the W1 time frame for the past four-five weeks are exceedingly small spinning tops that have been formed within the support zone above 1.7100 – 1.7200.

I expect that the pair will renew its move north after the depreciation from last month that began from 1.79940 and ended at 1.70962. I think that in the medium term the pair will head for the resistance trend line (in blue) and it will reach 1.8000 – 1.8100.

In the alternate scenario there will be a depreciation, but that scenario will become valid only in case there is a break out below the support trend line (in red) and the pair remains below it for a considerable period of time. In the short term that is not very probable.

Saturday, January 20, 2018

Medium Term Assessment Of The USD/CAD Development



As I had assessed in my last post about the USD/CAD pair>>> , it broke out below the support of the horizontal range between 1.2922 – 1.2670 (in blue) and reached its limit.

However, the pair has not been able to break out below the zone around 1.2400 - 1.2460 for three weeks. This week it closed at 1.2493.


I expect the pair to renew its move north toward the diagonal trend line of resistance (in red).

The alternative scenario is for depreciation toward the support trend line which is also marked in red.
I think that we should watch the pair’s charts for the formation of a wedge which would give us the opportunity to open good positions once there is a breakout above or below that wedge.



Friday, January 19, 2018

A RSI Divergence On The H4 GBP/USD Time Frame Is A Signal For A Drop

GBP/USD reached the resistance zone around 1.3950, which I mentioned in my last analysis of this pair, and when that happened a RSI divergence formed between three highs of the indicator compared to the pair’s chart movement.

The possible drop that this divergence is a signal for could reach 1.3550.

On the larger time frames, however, there is no signal that the pair’s rally is over, so for now we can only expect a corrective depreciation, after which GBP/USD could keep moving north to 1.4050 – 1.4100.

In my opinion a further deepening of the depreciation is not very likely, at least for the moment.
We should also observe the trend lines of the RSI divergence. In case there is a breakout to the upside that would mean a renewal of the rally without reaching the limit of the divergence.


Thursday, January 18, 2018

GBP/USD Is Close To a Key Resistance Level



GBP/USD is clearly aiming for the key resistance around 1.3950 – 1.4000 and toward the resistance trend line and it has almost reached that zone.

Said zone is marked on one side by the resistance trend line of the trend channel (in blue) and from the Bollinger Bands indicator on the monthly time frame on the other.


 I think that if it manages to overcome that zone that will be both a break out above the trend channel and a signal that the pair is renewing its move north, after a year and a half of depreciation.

In the alternate scenario there will be a drop from the resistance zone to the support trend line (in red) and after a possible breakout there will be another drop to 1.3050-1.3000.