FXML’s Forex Signals Analysis of August 4-10, 2014
Read this week's daily Forex signals analysis to find out everything there is to know about the actions of the Forex market during the previous week.
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FXML’s Forex signals analysis of August 4, 2014
NZD/USD has been in a downtrend for most of April after three dojis at the top, but looks like it is set now for a bounce. The last three days it has traded for some time beneath the 100 smooth moving average but was unable to close below it. The Stochastics have been oversold for some time and the RSI touched that area a couple of days ago. On the 4 hour chart the first resistance comes around 0.8530 where the 50 moving average awaits. When it reaches that level, which we are not far from, the Stochastics and RSI will be overbought so that would be a good place to take a short for maybe 30 pips, but on midterm the daily chart is long biased.
On the hourly chart, the 100 moving average has been providing support since it was broken on Friday and today the 50 MA has added strength to that support. Looking at the hourly chart, today we missed a good opportunity for a long at the 100 and the 50 MAs, when the Stochastics reached oversold area and a hammer was formed.
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NZD/USD daily chart – NZD/USD has been in a downtrend for most of April after three doji candles.
NZD/USD 4 hour chart – the first resistance comes around 0.8530 where the 50 moving average awaits.
NZD/USD 1 hour chart – , the 100 moving average has been providing support since it was broken on Friday and today the 50 MA has added strength to that support.
GBP/USD broke the 100 daily moving average on Friday after UK manufacturing data came out below expectations. From the daily chart we see that the first significant resistance is the 1.67 level which held the pair on the retrace after the first failure to break 1.70 on May. Today was more of a consolidation day with little movement, but it has had a more bullish feeling intraday.
That said, we had the Construction PMI today which came above market consensus, but the pair ignored it and Construction is an important piece and a motor of the UK economy. Tomorrow we'll have the Services PMI and as we've seen recently and today, the risk is on the downside. We've seen that the 20 MA has been playing resistance on the H4 chart recently so it would be a good place to take a short against it which comes at around 1.6860s.
GBP/USD daily chart – we see that the first significant resistance is the 1.67 level which held the pair on the retrace after the first failure to break 1.70 on May.
GBP/USD 4 hour chart – the 20 MA has been acting as resistance recently.
GBP/USD 1 hour chart – tomorrow we'll have the Services PMI and as we've seen recently and today, the risk is on the downside.
FXML’s Forex signals analysis of August 5, 2014
AUD/USD has been trading within the 0.9260-0.93 and 0.95 range confined by the 100 smooth daily average on the bottom and the 200 smooth daily moving average on the top. Three days ago we touched the 100 moving average and it looked like it was set for a bounce with two bullish daily candles, but yesterday we had a very bearish candle and returned to the same moving average. On the 4 hour chart there was a good chance to get in on the short side at 10 am GMT after it touched the 200 smooth MA and made a pin just below it, suggesting that the 200 MA was going to hold. Apart from that the Stochastics were overbought at that moment. The two reverse pins on the hourly chart at the same time, confirmed this short setup.
AUD/USD daily chart – 0.9260-0.93 and 0.95 has been the range for some time now.
AUD/USD 4 hour chart – there was a good chance to get in on the short side at 10 am GMT after it touched the 200 smooth MA and made a pin just below it
AUD/USD 1 hour chart – two reverse pins on the hourly chart at the same time, confirmed the short setup.
USD/CAD has been in a steep uptrend since touching 1.06 during the first week of July. As we can see from the daily chart the uptrend has been so strong that the pullbacks have been very minimal. The pair has easily broken the 50 and 100 simple moving averages and yesterday it broke the first resistance around 1.0950. The next resistance comes at 1.1050 where we have the April high. The 4 hour chart shows the strength of the uptrend, where the bulls haven't waited for the indicators like RSI and Stochastics to get in the oversold territory.
The hourly chart suggests that most of the buyers have been using this timeframe to jump in on the long side. As we can see from that chart, during the last four days the pair has found bids whenever it touched the 50 MA first and then the 100 MA, coupled with oversold Stochastics. I took a small short on this pair yesterday after the Strong US ISM Non-Manufacturing PMI Data, where the other pairs had a considerable fall against the USD but CAD was being less weak, so I thought that it was time we might see a correction on this pair. But that wasn't the case and I got stopped. This shows that we shouldn't trade on our expectations but on what we see in the charts and the basic rule to always follow the trend.
USD/CAD daily chart – the uptrend has been so strong recently that the pullbacks have been very minimal.
USD/CAD 4 hour chart – this chart shows the strength of the uptrend, where the bulls haven't waited for the indicators like RSI and Stochastics to get in the oversold territory.
USD/CAD 1 hour chart – during the last four days the pair has found bids whenever it touched the 50 MA first and then the 100 MA, coupled with oversold Stochastics.
FXML’s Forex signals analysis of August 6, 2014
USD/JPY had several tries at breaking the 103 level last week, but even the excellent US Advance GDP data wasn't enough to break it. It went a few pips over but was unable to close above that level. After making a reverse pin on the daily chart it reversed the next day, then it made a couple of dojis/pins and yesterday it continued to the downside.
We had a strange episode yesterday where the pair fell about 60 pips within 2-3 minutes, breaking the 102.20 support, which can be seen on the daily chart. Some associate this move with GPIF front running and others with a fat finger placing a trade on illiquid markets. But the daily failed to close below the 100 moving average and right now the price is near the same levels as before that sudden move, meaning that no real news was behind it. Now the 50 moving average on the H4 chart seems to be providing resistance for the time being. From now on, this pair is in no man's land and chances are 50/50 both ways.
USD/JPY daily chart – after making a reverse pin, the price reversed the next day, then it made a couple of dojis/pins and yesterday it continued to the downside.
USD/JPY 4 hour chart – the 50 MA seems to be providing resistance.
USD/JPY 1 hour chart – from now on, this pair is in no man's land and chances are 50/50 both ways.
Yesterday the news out of Europe was not so good with German factory orders posting a 3.2% decline month on month and Italian quarter on quarter GDP at -0.2%, which is the second quarterly contraction making it an official recession. Regarding the importance of the news EUR/USD didn't react that badly, falling about 40 pips during three hours as we can see on the hourly chart. Then after it made a pin on the same chart it retraced all the daily loses to close as a hammer on the daily chart.But most of the afternoon gains were due to the USD/JPY selling which spilled on other pairs, as we have often seen this kinds of moves do. Since then the pair has been stuck around 1.3370-80 for more than 14 hours waiting the outcome of the ECB Press Conference and the US Unemployment Claims, so we'll wait with the crowd and look for trades in this pair after those events.
EUR/USD daily chart – candle closed as hammer on the daily chart.
EUR/USD 4 hour chart – the pair has been stuck around 1.3370-80 for more than 14 hours waiting the outcome of the ECB Press Conference and the US Unemployment Claims.
EUR/USD 1 hour chart – the price fell about 40 pips in three hours.
FXML’s Forex signals analysis of August 7, 2014
Today we had the Euro Minimum Bid Rate at 12:45 GMT and the ECB chairman Draghi press conference 45 minutes later. My opinion prior to the press conference was sort of bearish on EUR/USD given the not so great recent outlook of the European economies and data. So I had a small short placed around 1.3380 before it started. Luckily for me the pair fell some 30 pips immediately when the conference started. Then it retraced back up and I placed another short up there.
Looking at the hourly chart it seems a pretty straight forward trade but when you are actually trading central bank conferences like these, it's anything but easy. It's very painfully to watch the price move your way and then change direction in a matter of minutes, even seconds. Looking at the 1 minute chart below we see the volatility during the 1 hour conference, which I was watching live. The comments from Draghi had indeed a slight bearish tone but the pair didn't fall during the interview. Instead it fell right after the conference finished and reached previous day's low of 1.3330s. So my pain finally paid off, but I wouldn't recommend these kinds of trades unless you are experienced enough to read between the lines of the comments.
EUR/USD 4 hour chart – today we had the Euro Minimum Bid Rate at 12:45 GMT and the ECB chairman Draghi press conference 45 minutes later.
EUR/USD 1 hour chart – price fell right after the conference finished and reached previous day's low of 1.3330.
EUR/USD 1 minute chart – the volatility during the 1 hour conference can be seen.
Yesterday USD/CAD finally had the much waited retracement after the Canadian trade balance coming out better than expected. On the hourly chart we had some divergence between the price and MACD signaling a possible reverse/retracement. Today the price reached 1.00902 where we find the 50 moving average. I missed the chance to load up big at that level, given the divergence with the RSI, MACD and Stochastics but on the hourly chart, I took a smaller short a little higher and cashed in around 1.0945. The outlook for this pair is bullish, but I'll wait for the Canadian employment/unemployment data today. If it comes out better than expected then I'll wait for a bigger retracement and will buy it lower.
USD/CAD 4 hour chart – the outlook for this pair is bullish, but I'll wait for the Canadian employment/unemployment data today.
USD/CAD 1 hour chart – divergence between the price and MACD signaling a possible reverse/retracement.
FXML’s Forex signals analysis of August 8, 2014
GBP/USD has been on the back foot since mid-July and the slide isn't stopping. The bounces have been very minimal, with the best one in the beginning of this week which counted for about 80 pips from 1.68. We saw that level break today but it wasn't a big deal. It only fell about 5 pips below 1.68 and we have been hanging around there since this morning. We see on the 4 hour chart the volume increase during the down moves and decrease when moving up. This means that there are more sellers than buyers and the downward pressure is obvious on this pair.
GBP/USD daily chart – this pair has been on the back foot since mid-July and the slide isn't stopping
GBP/USD 4 hour chart – the volume increases during the down moves and decreases when moving up.
GBP/USD 1 hour chart
EUR/JPY has been in a downtrend for more than three months and the 100 smooth daily moving average which has acted as support during the past two months turned into resistance at the beginning of the week. When I talk about resistance this is what I have in mind. A clear trend in this case a downtrend, the pair pulls back until Stochastics and/or RSI reach overbought territory where a moving average awaits and possibly a previous resistance now turns support.
This daily chart formation coincides with the 100 smooth moving average on the H4 chart at the same level adding extra resistance. For those of us who missed the chance to enter short at the peak of the retrace, some more opportunities appeared on the hourly chart yesterday and today where the 50 moving average proved to be the turning point when the Stochastics reached overbought.
EUR/JPY daily chart – the 100 smooth daily moving average which has acted as support during the past two months turned into resistance at the beginning of the week.
EUR/JPY 4 hour chart – the 100 smooth moving average is adding extra resistance.
EUR/JPY 1 hour chart
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