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Return to Mean Reversion for AUD/CAD

The AUD/CAD is a strange beast. Comprised of two commodity currencies, sometimes this pair is calm as it can be, while other times it goes completely crazy. We seem to be in the second phase right now. On the daily chart below the AUD/CAD has entered into heavily oversold area. The Stoch is flashing extreme values of 7. Below 20 is oversold according to traditional technical analysis.
But pairs can remain oversold long after they've hit 20 on the Stochastic. Why bet on stabilization here? Well l…
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EUR/GBP Inside Old Congestion Area

The EUR/GBP is back inside its old congestion area. On the weekly chart below we can see that the range between 0.7760 and 0.8060 has been important in the past. The pair was locked inside this area for the entire second half of 2014. Even though earlier this year we overshoot the range a bit, we've now settled nicely inside it.
Even on the shorter-term charts there's no clear direction. On the daily chart below we see that while the long-term trend was up earlier this year, in the past month pr…
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EUR/PLN at 50% Fibonacci Level

The EUR/PLN had a major decline this year. The pair crumbled from a high of 4.5100 to a low of 4.2262. This was largely a correction of the Polish Zloty weakness after the election delivered an eccentric party to power. But this month, the pair is on the rise again. We're currently quoted at 4.3717, right above the 50% Fibonacci of the large move from 4.51 to 4.22.
Wildly volatile periods like these are usually followed with calmer, ranging markets. On our second pic we can see that on the lower…
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More Gains for the Euro

The Euro had a okay but not great April. The pair rallied from 1.1377 to close the month at 1.1445. But that doesn't tell us the whole picture. On the chart below the daily trend is more clearly visible. Even more important, the EUR/USD closed Friday 94 pips in the green, showing that it has both trend and momentum on its side.
But just how far will this rally take us? I think the pair will have no problem breaking past the 1.1400-1.1500 resistance barrier. The only potential stopping point I'm …
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More of the Same for Singapore Dollar

The EUR/SGD closed the month down by only 44 pips. We opened at 1.3479 and we closed on Friday at 1.3435. As we can see on the picture below, the pair has been range-bound for the past few weeks. I marked April with a rectangle to make it easier to spot.
On the downside the pair is being held up by 1.3401 level. This is the 50% Fibonacci retracement of the large rally from 1.2361 to 1.4420. This is strong support and I don't expect it to give way during May. On the top end, this month's high at …
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EUR/SEK to Continue Range

I expect the EUR/SEK to continue trading inside a range, here 's why. The longer timeframes show that since 2014 there has been no clear trend in this pair. As time goes on, we've seen this range narrow to below 7% last year. The weekly chart below shows that the pair has been stuck between a low of 9.05 and a hgih at 9.68.
But things are not looking great on shorter timeframes either. On the hourly chart below you can see that for the past three weeks the EUR/SEK exhibited no momentum.
I'm plac…
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Further Trend Extension for Cable

I except the current bullish trend for Cable to continue. We show this trend on the 4 Hour chart below. Notice the nice sequence of higher highs and higher lows.
But why am I forecasting 1.4991? Well on the second picture below we see that the Pound has just completed an inverse Head and Shoulders pattern. I wrote about this pattern in my TA post for April but back then it wasn't completed yet.
To arrive at the target for this pattern we take the lowest low to the shoulder, in our case 679 pips.…
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EUR/TRY Still Inside That Wedge

The EUR/TRY continues to trade range-bound. The pair opened the month at 3.2025 and closed it at 3.2008. The total monthly range high to low was only 2.6 percent. While this was higher then last month's 1.6%, it's still fairly low even for currencies.
Price action is congested on higher timeframes too. On the weekly chart below we can see that the pair is still stuck inside that major Wedge formation. Until the EUR/TRY stages a breakout, betting on more of the same seems like a no-brainer. I'm f…
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More Losses for the USD/JPY

Last month we saw a doji pattern in the USD/JPY. This is usually an indecision pattern. But in this case the Doji has been followed by a large red bar. This breaks the stalemate and potentially signals that more losses are to come.
On the lower 4 hour timefame we can see that the pair has fallen by over 500 pips in the last two days alone. So not only do we have the medium-term trend heading down but so is the momentum.
The average monthly range for the USD/JPY is 479 pips but this of course is …
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EUR/JPY to Stabilize at Double Bottom

The EUR/JPY has lost a lot of ground in April. The pair closed the month lower by 636 pips. On the first picture below we can see that the currency pair is oversold on the lower timeframes according to the Stochastic Oscillator. Values below 20 indicate an oversold market.
Let's go up in timeframes. On the daily chart below we see that the pair is now right at a critical support level. This area around 122 Euros per Yen has acted as support on two other separate occasions, forming a double botto…
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Calmer Month for Canadian Dollar

The USD/CAD had a wild ride for the past year. Initially it rallied strongly on US Dollar strength then fell as Oil (a major CAD export) recovered. On the first pic we can see that after a the large decline the charts are finally flashing oversold. Furthermore we've now ticked up from the 20 Stochastic level and heading higher, added confirmation that we may see an end to the losses.
An added supporting factor for a bounce higher is that the long-term trend is still up. On the second chart we ca…
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Large Gains for the Kiwi

The NZD/USD spent most of last year in the dulldrums. The currency fell from 0.7800 to a low of 0.6071 before retracing somewhat. We are currently quoted at 0.6980.
But there are signs that a recovery is under way. On the chart below we can see that the NZD/USD has just cleared an important resistance area around 0.6900. After two-three false breaks, we're finally leaving this resistance behind.
I'm placing my bet on 0.7381, this is around 400 pips away from the current price. The average monthl…
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