ActivTrades Webinar - London BREXIT Update: One month to Referendum

With one month left to the referendum in the UK that has to decide whether or not the country remains part of the European Union everyone on the market, especially the people trading the GBP pairs, are on edge and have many questions about the possible outcomes of this referendum and their consequences. I confess I am on edge and I have questions too.
 

Thankfully, the ActivTrades broker is organizing an online webinar, which will be led by professional trader Malte Kaub, who will go into detail about answering the most pressing questions about this event. What is the most likely scenario? How are the biggest traders positioned? Malte will share his insight straight from the leading traders in London.
 

The webinar will be held on 2nd June and you can learn more about it and register for it here>>> .
 

All ActivTrades webinars are free and open to the public.

AUD/USD Is About to Form a Double Bottom

It all depends on how today’s candlestick will close on the daily time frame and there are a few more hours until that happens. I think that there is a pretty big chance it will close as a double bottom indeed.

What is more, if we examine the RSI indicator we can see even without drawing any trendlines that there is a divergence between the two candlesticks that could form the potential double bottom.

That will be a very telling signal that the pair could change directions and we could see a move to the upside at least until it reaches 0.7250, which is a strong resistance level on the daily time frame. If the pair breaks above that level I think it will continue rising towards the next resistance at 0.7370.

Gold Could Not Break Above the Strong Monthly Support at 1280 – 1300

It has been four weeks since Gold began falling, the previous metal has fallen with almost $100 and at the moment it is at the strong support around 1200 that can be seen on the weekly time frame.

If we examine the monthly time frame we can conclude that the previous metal will continue falling at least until it reaches 1170 - 1160, which is another strong support level visible on this time frame.

If the pair succeeds in breaking below this zone of support (between 1200 and 1160) then the move to the downside will continue to 1050. On the other hand, if it cannot break below the support zone there will be a new move to the upside.

AUD/NZD Reached Strong Weekly Support and Bounced off of It

As we should have expected AUD/NZD reached the support at 1.06194, which is the red trendline you can see on the screenshot, for a fifth time for the past seven months and bounced off of it.

That, however, is no guarantee that a move to the upside is about to begin. The market has an unwritten rule that if a pair attempts to break above or below a certain level 2-3 times usually a reversal follows. This is not the case here though – AUD/NZD has tested this support (the trendline) five times now and it’s still trying to break below it.

If we look at the monthly time frame, the logical continuation of this movement is to the downside, not to the upside. In my opinion we should be prepared for a breakout after the next retracement. If that happens, I think the pair will continue falling towards the strong monthly support at 1.02160.

The Bank of Canada Kept the Interest Rate as It Is

The Bank of Canada announced today that it has decided not to change the interest rate and keep it at 0.50 and investors interpreted that as a good sign, which made all Canadian Dollar pairs start moving in favour of the Canadian currency.

When the news was announced USD/CAD fell with over 70 pips, which confirmed the trend reversal I have been expecting since yesterday.

EUR/CAD also fell with 90 pips and continues falling. I think the pair will keep moving to the downside, towards 1.4100 - 1.4050, which is a strong support level visible on the weekly time frame.

It is too early to say whether the pair will break below that level, because the monthly time frame is indicating a move to the upside, rather than to the downside. We will have to watch EUR/CAD carefully when it reaches that level.

EUR/USD Is Approaching the Diagonal Trendline that Has Formed Since 29th Nov 2015

There are less than 100 pips that remain until the pair reaches the diagonal trendline (the red line on the screenshot) and at this point there is little doubt that it will eventually go there.

If we examine the monthly time frame we will see that the pair has been consolidating around the middle line of the Bollinger Bands indicator, which can mean both an impending move to the upside, once the EUR/USD reaches that support, as well as a new move to the downside.

Future analysis of the pair depends on that trendline as well as the candlesticks that will form once it reaches that level. For now I intend to wait and see how it will behave without opening any new positions.

The USD/CAD Divergence Is Deepening which Means the Trend Will Reverse

Four highs during a divergence is a serious enough reason to think that the USD/CAD trend will reverse.

What is more, despite the slight move to the upside in the past five days (between 19th and 24th May) during which the pair formed said four new highs, there are multiple spinning top candlesticks on the daily time frame, which suggests that the trading volumes have been many times smaller than the ones at the beginning of the move to the upside on 3rd May.

All these factors are indications that a correction to the downside is about to begin.

On the chart you can see the important levels of support and resistance that formed while the pair climbed and I think the move to the downside will likely reach one of those levels. That said, in my opinion after the correction is over the pair will continue climbing at least until it reaches 1.3300, which is a strong resistance level visible on the weekly time frame.

Doubtle Top and a Divergence on the USD/CAD Chart

I am writing again about my favourite pair – USD/CAD.

I like it so much because its movements are so smooth and at the same time usually they are also very clear and predictable, which makes it easy to profit off of it. After all, that’s the purpose of all traders – to profit!
There was a powerful rally on Thursday and USD/CAD stopped at the resistance at 1.3150 (or to be more precise, its high was at 1.3153). On the 4-hour time frame it formed a very noticeable bearish formation – a bearish hammer as well as a hanging man candlestick, then fell with about 80 pips and then tested the high once more, even formed a new high at 1.3161.

All that said, you can easily notice that there is a visible divergence on the RSI indicator on most time frames, from 15-minutes to 4-hours. This is a screenshot of the 1-hour time frame.
These two indications – the double top and the divergence – are a clear signal that a correction is about to begin.

I will elaborate more on how deeply the pair could fall in a following post.

GBP/JPY Has Reached a Strong Resistance on the Daily Time Frame and I Think It Will Start Falling

I haven’t examined this pair in detail before. Today, however, there is a pretty strong signal and I think it’s worth paying attention to it.

The pair has reached the strong resistance at 160.50 – 161.50 and has been moving between these levels all day long, forming a very telling doji candlestick on the daily time frame.

The resistance level itself is visualized by the upper band of Bollinger Bands and the green line of the (EMA)89 indicator on the same time frame.

On the 4-hour time frame there is an already closed bearish hammer candlestick which has formed entirely below the resistance at 161.50.

Of course we have to wait for the daily candlestick to close as well, which will happen in a few hours, before we can do anything with any certainty. If the daily candlestick closes as it is now – as a doji below the resistance level – in my opinion this will be a strong signal that a move to the downside is about to begin and the pair could reach at least 157.00.

The USD/CAD Range Is Over, Next Target is at least 1.31

In my opinion, the USD/CAD range that began on 9th May is over. The pair broke above the resistance trendline of the purple symmetrical triangle you can see on the screenshot and it broke above 3rd triangle high at 1.2962. What is more, on the smaller time frames you can see that the pair also tested the support trendline (the red line) again earlier today.

In my opinion, the next target of the move to the upside that just began will be 1.3100 – 1.3150, which is a powerful resistance level visible on the daily time frame.

It is also very possible that the move to the upside will continue until the pair reaches 1.3300, which is the resistance level visible on the weekly time frame, but for the moment it’s still too early to speculate about this with any certainty.

ActivTrades Webinar: Working with Stop-Losses and Take Profits

Any successful Forex trader knows that to make a profit they need to have a trading plan before they ever open a new position and that they need to have a basic understanding of risk and money management. Fortunately, the online broker ActivTrades is organizing a webinar led by professional trader Paul Wallace where you can watch him explain various types of stop losses and ways to take profit so that you can add them to your trading plan.

This webinar will be held on 19^th May. Don’t miss this opportunity to learn something incredibly useful.

For more information and to register follow this link>>>.

All ActivTrades webinars are free and open to the public.

USD/CAD Reached a Strong Resistance Level. What Follows Next?

USD/CAD reached the strong resistance level at 1.2950 and attempted to break above it, reaching 1.2986.

Unfortunately this breakout was false, the pair could not continue climbing and began a consolidation.

At this point you can see that a symmetrical triangle is forming on the four-hour time frame, which so far has four highs and lows, and there is also a bullish hammer candlestick and such a formation is a signal that the upward trend will continue. I expect that the pair will break above the resistance at 1.2950 and will continue climbing towards the next resistance, which is at 1.3100 and can be observed on the daily time frame.

Is the Bearish EUR/USD Trend Over?

I am referring to the trend that began on 4th May 2004 and continued until around 29 November 2015, with its five impulse waves.

Why do I think that it might be over?

On the screenshot you can see the supposed five Elliot waves, which have all the typical characteristics of a finished impulse – there is a very long and steep third wave, a fourth wave that reaches exactly 38.2% Fibo (it’s almost a textbook example) and a fifth wave that is shorter than the third and could not reach its bottom, which is typical for fifth waves after such a long third wave.

If my supposition is correct, that would mean that the overall bullish trend has already begun, and after a correction we can expect a new move to the upside with its long-term target being at 1.2200 or even higher than that.

The other possible scenario is the classic expectation for EUR/USD to reach parity.

Still, at this stage we should be very careful when we trade this pair until we get a confirmation that the bearish trend is truly over.

AUD/NZD Is Approaching a Strong Weekly Support Zone

This support is visible on the AUD/NZD weekly time frame and the pair has not been able to break below it not even once since October 2015, i.e. it has been about six months since that has happened last.
There are less than 100 pips left until the pair reaches said support zone at 1.0650 – 1.0660.

If the pair succeeds in breaking below that level, I think we could likely expect it to continue falling towards the next strong level around 1.0500 or even possibly 1.0200. If the pair cannot break below the support zone this time either, we will likely see it climb towards the resistance zone between 1.1290 and 1.1350.

EUR/USD Formed a Shooting Star Candlestick Last Week and this Could Be the Beginning of a Correction to the South

In the past week EUR/USD reached the resistance trend line of the overall bullish trend on the weekly time frame and formed a very clear shooting star candlestick on the same time frame. Such a candlestick tends to be a very telling signal for a reversal and in this case it is a signal that before the pair continues climbing a bearish correction is about to begin.

I am examining the weekly time frame and I am thinking that the move to the downside will probably reach at least 1.1160, which is a strong support level visible on the same time frame.

Also, I am becoming more and more convinced that the bearish trend that has continued from May 2014 until November 2015 is over and sooner or later the pair will start climbing again once the aforementioned correction ends. I will elaborate on my reasons for thinking so in a future post.

GBP/USD Is Testing the Strong Diagonal Support Trendline and There Is a Potential For Longs

The pair has been testing this support for four days now and the diagonal trendline is at the same level as the (EMA)89 on the daily time frame. At the same time it’s becoming more and more obvious that traders are in the mood to buy the GBP.

This situation is a good opportunity to start opening long positions, and in my opinion the stop loss for them should be below 1.4370, which is the low formed on Monday, 9th May. The target of the long positions should be around the 1.4640 level, which is a powerful resistance, visualized by the upper band of the Bollinger Bands and (EMA)200 (the orange line) indicators on the daily time frame.

Is This the End of the USD/JPY Move to the Downside?

When I ask this question I am referring to the global trend that began on 1st Oct 2011 or more precisely, the whole cycle of 5 impulse and three corrective waves.

If we examine the monthly time frame we will see that at the moment the pair has fallen to 38.2% Fibo of the impulse, which makes me wonder whether this is the end of Wave A of the correction. If it has ended, then the possible move to the upside will last at least until the pair reaches 118 – 119. There is another scenario where the move to the downside could continue for a little while longer, until the pair reaches 50% Fibo, which is around 108.50.

Either way, we should expect a new move to the upside, so we should be on the lookout for good entry points for long positions, since Wave B of the correction should start climbing soon.

Forex Trading and Economic News Events

Today’s poor Non-Farm Payrolls data caused a wild, if short-term reaction on the market for all USD pairs, which is typical, at least in my experience for the years I’ve spent trading.

EUR/USD moved sharply north and then returned to its old levels, USD/CAD continued its steadfast rising despite the poor data, AUD/USD didn’t even move all that much – about 60 pips – and USD/JPY almost didn’t react at all and continued its sideways consolidation, which is an indication there will be a new move to the downside.

Why am I saying all this? Because I have always been convinced that news events, with few exceptions, are capable of causing strong, but short-term changes on the market, after which every currency pair continues in its previously chosen direction. For me the charts are the most important thing – because what we see on them forms the mood and expectations of the people participating in the Forex market.

Which is why for me it’s more important to be able to analyze the charts properly, rather than be interested in the details of the economic data causing every short-term disturbance on the Forex market.

There Was a Very Clear Signal for Short Positions on the EUR/USD Chart and It Had a Predictable Result

Such a clear and obvious signal is actually pretty rare to see on the charts of any currency pair and when it does appear it should be used to the fullest of its potential. The move to the downside that followed could be used in a textbook.

EUR/USD didn’t begin a considerable correction before reaching the resistance trendline of the daily time frame around 1.1625. That said, the pair started moving to the downside before it could actually touch that trendline even though only 10 pips remained until that could happen. It formed a very clear bearish hammer and has continued falling for three days now.

Although for now it has stopped at the support visualized by (EMA)89 on the four-hour time frame at 1.1390, I am convinced it won’t hold for long. I expect for the move to the downside to continue tomorrow towards the next, stronger support at 1.1450 – 1.1430, which can be seen on the daily time frame.
What will follow next will become clear tomorrow after the Non-farm Payrolls.

 

USD/CAD Couldn’t Break below 1.2650 and Began a Correction

The support there is visualized by the middle line of the Bollinger Bands indicator on the monthly time frame and as it happens almost always, once the pair reached it a correction began. Usually during such a correction the price either lingers on the middle line of Bollinger Bands or it bounces off of it.

In this case it’s difficult to say which one of these two scenarios will be more valid, but on the daily time frame you can see that the pair has broken above the resistance at 1.2700 with ease and it is rising towards the next resistance at 1.2950.

Whether the pair will bounce off that resistance once it reaches it or it will continue moving to the upside remains to be seen. I have to see what candlestick patterns will form on that level so I can make a decision whether to open new short positions or keep my long ones open.

SMART TRADER UK : The Undeclared Secrets of a Smart Trader

The online broker ActivTrades is launching its first UK trading tour, called Smart Trader UK. This tour will last 4 days and it will be presented by Gavin Holmes, a world famous trader and founder of Trade Guider, as well as Volume Spread Analysis expert Darron Jobling.

During each of the four seminars you will learn essential strategies, as well as  psychology needed to begin or enhance your trading. You will also have the opportunity to ask technical questions and network with other traders.


The schedule of the seminars is as follows:

Wednesday 11th May - DoubleTree by Hilton Hotel Edinburgh City Centre :
34 Bread Street, Edinburgh, EH3 9AF, United Kingdom

Thursday 12th May - DoubleTree by Hilton Hotel Leeds City Centre :
Granary Wharf, 2 Wharf Approach, Leeds, LS1 4BR, United Kingdom

Friday 13th May - Radisson Blu Edwardian Kenilworth :
97 Great Russell Street, Bloomsbury, London, WC1B 3LB

Saturday 14th May - Radisson Blu Edwardian Kenilworth :
97 Great Russell Street, Bloomsbury, London, WC1B 3LB

For more information please follow this link>>>

EUR/USD Reached Target 1.1530, But What Will Follow Next?

Тhe pair reached the resistance at 1.1530>>>, which is vizualized by (EMA)89 and the upper band of Bollinger Bands indicators on the weekly time frame.
The question is what will follow next?
In my opinion, the pair will probably test this high at least once more, or it will possibly form a new one at 1.1550.

However, I do not think it will break above this strong resistance level right away, which is why I think there will be a retracement. It is difficult to discern how deep this retracement will be, but I think its first target would be around 1.1450.

Also, considering that the pair has been moving in a bullish channel, I think it is possible that after a small correction it will start climbing and its next target would be the resistance line of that channel, around the 1.1650 level.