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Support And Resistance in Forex

Support and Resistance are the two most popular concepts in technical analysis. It states that there are certain price levels act as a barrier and make the price stop and reverse. Support is a level that prevents price from being pushed downwards. Resistance is a level that prevents price from being pushed upwards. There are 3 golden rules you need to know about support and resistance.
1. The more times the support or resistance level gets tested the stronger they get. Because the more obvious the level is, more the traders will be placing their sell orders or buy orders there.
2. When support or resistance level breaks the stronger it has been, the stronger the follow through is.
3. In theory a support becomes resistance when it breaks and resistance becomes support when it breaks.

EUR/USD — Daily Forecast Technical Analysis — September 19th 2014

Hantec Markets brings you the latest technical analysis on the EUR/USD pair for the September 19th in this video.
EUR/USD — The Euro which broke down a couple of days ago on that FOMC Meeting, just looks like its rebounded and is going to give another chance to sell. The outlook on all these momentum indicators is still pretty weak and you can make an argument for a slight bullish divergence on the RSI indicator, but nothing major for a rally at the moment. Looking at the intraday chart the rally has just come back into the resistance band between 1.29 and 1.2950 area, fairly sizeable resistance indicating that rally recovery is just giving another chance to sell. With the European session trading the downside has begun to take off again. We can make an argument for a minor double top pattern. It looks like the bears are regaining control. The Momentum indicators look bearish and gives a sell signal. I think we are going to retest these lows around 1.2830. Looking at the daily chart the consolidations have ended in downside move.

GBP/USD — Daily Forecast Technical Analysis — September 19th 2014

In this video the Trader Guy looks at currency pairs GBP/USD pair for the  September 19th session.
GBP/USD — We already started to take off during the day on Thursday and it looks to me atleast like we are doing a little bit of front running. The Scottish vote ofcourse is on everybody’s mind and this gap ofcourse is resistance. We had a perfect shooting star from Wednesday session and we broke above it and that is a very positive sign. I think ultimately the market expects a no vote in the referendum and that should send this pair higher. The 1.66 level will be my first target and can we go above 1.65. Yes I certainly think so and it might take some time. It just comes down to how many people are concerned and how much short covering is going to have to happen due to this sell off. We could see a pretty strong move to the upside with lot of short covering. On the other hand if Scotland does leave for whatever reason then 1.60 level will get broken to the downside. However I am already long on this pair for the Options and the Spot market. We expect a lot of volatility and we will go higher.

Forex News Trading Strategy

When news is released there is often a lot of irrational market movement. For example a large spike occured in the EUR/USD immediately following the release of Non Farm Payroll. NFP is a measure of number of people employed in all activities except agriculture. It is released on the first Friday of every month and historically the most market moving news event for the dollar. What we are looking for with this strategy is a correction. If we look closely at the price action about 15 minutes after the news event we can see that price begins to move back to previously traded levels.
I am going to show you my way of trading. First you need to look at market moving news event. This can be done by visiting the Global Economic Calendar and look for any events rated as high. Then I am going to watch for substantial market move following the news event. The critical step in this strategy is timing. We want to wait for 15 minutes before we do anything and after that we are going to trade in the opposite direction of the recent price action in anticipation that price should revert back to previous levels. Placing a stop loss is important to limit potential losses. In this trade we place our stops at 15 pips for a target of 40 pips.

Types Of Forex Charts

Line charts are drawn by simply connecting session’s open, high, low and close prices in one single line. The main advantage of this type of chart is that its extremly clean. It filters out a lot of market noise. It gives clear support and resistance levels.
Bar charts show open, low, high and close prices for each given session. The horizontal line on the left shows the opening price, the bottom shows the lowest price of that specific time period, the top shows the highest price of that specific time period and the horizontal line on the right shows the closing price. This is the most popular of the charts.
Candlestick chart display the same information as bar charts but the visual representation is a lot better. The big blocks are called real bodies. The vertical lines above this are upper shadows and the lines below are lower shadows. Usually candles with light color is prefered for bullish candle and dark color for bearsih candles. The main advantage of this chart over other charts is the excellent visual representation that candlesticks provide. It shows clearly who is in control, bulls or bears.

GBP/USD — Daily Forecast Technical Analysis — September 18th 2014

In this video the Trader Guy looks at currency pairs GBP/USD pair for the  September 18th session.
GBP/USD — The only market that people are paying attention to at the moment and that is because of the Scottish referendum vote that will be happening today. Expect a lot of volatility no matter what happens that the first thing you have to know. However we have come up and filled the gap as of two sessions from Tuesday and Wednesday. We say we are trying to break out and looks like people are trying to front run the vote and failed. The shooting star is a very negative sign but don’t be fooled because we have a little bit of a hammer before that. I believe that we are simply waiting to see what is going to happen quite frankly a lot of research that i am doing suggest that Scots are going to stay and that should be good for the Pound. How much higher we can go I don’t know but I think probably 1.66 is a fairly reasonable estimate and because we are in a downtrend for a couple of different reasons. This is partially due to the dollar ofcourse. 1.70 could be targeted in the longer term possibly and I just have to see and I am very bullish on the top of the shooting star and we will continue to go higher. As far as selling is concerned I am very cautious and if Scots decide to leave the union, then 1.60 will be attacked. and probably broken to the downside. I still have an upward bias even with this very negative candle.

EUR/USD — Daily Forecast Technical Analysis — September 18th 2014

In this video the Trader Guy looks at currency pairs EUR/USD pair for the  September 18th session.
EUR/USD — You can see that we did fall relatively significantly during the session on Wednesday and this was a reaction to the Federal reserve and continued tapering of Quantitative easing. That being the case it looks like the Euro is going to continue to sell off except there is one thing and this is the main reason I made this video that I want to point out to short term traders who may not be paying attention. We are at 1.2845 that is important on the longer term charts. This is the weekly chart you can see which has been supportive at 61.8% and I would not be selling into this. Yes it looks weak and we have broken the bottom of a shooting star in the weekly chart. But this is the type of trades that nightmares can be made of. Quite frankly there are easier ways to trade the currency market right now. Sometimes I make videos and show you excellent setups and other times I will show you a trade may not work. This is one of the later of those two types. I am not saying that we can’t break down but I need to see a daily close below 1.28 to start selling at this point. Quite frankly I’d rather see a bit of a bounce that I can sell into, maybe if we can bounce back to 1.30 and get a resistive candle, I will be willing to take a short term sell position. I have no interest in buying this pair, don’t get me wrong. The 1.3250 is the absolute ceiling right now based upon that gap. If we get above there then I would have to change my thought process but right now we are just above the 1.28 level, I will be on the sidelines today.

Fundamental Analysis in Forex

Fundamental analysis is a method to forecast future price movements by analyzing the overall state of economy by considering the factors like Interest rates, Production, Employment, Housing and Manufacturing. Fundamental Analysts believe that market make misspriced currency in the short run but the current price will eventually be reached. They make profit by purchasing mispriced currency and then wait for markets to recognize its mistake and then reprice the currency. In theory if a country’s future economic outlook is good then the currency should get stronger. If the country’s economy is improving they may need to raise Interest rates to control growth and inflation. Higher Interest rates can attract Foreign investors looking to buy country’s financial asset. In order to do that they first need to purchase country’s currency and higher demand means higher price. So the value of the currency increases.

GBP/USD — Daily Forecast Technical Analysis — September 17th 2014

Hantec Markets brings you the latest technical analysis on the GBP/USD pair for the September 16th in this video.
GBP/USD — The Sterling Pound is now beginning to rally. It had a strong recovery yesterday. The recovery begun as a result of the possibility that the Fed may well remain dovish but since then move is controlled by the latest polls on Scottish independence that the campaign is going to possibly win. So that is driving Sterling higher and this recovery is in process now. For the last 3 days we have been hitting against this 38.2% Fib retracement of the big sell off and now that has been broken decisively at 1.6278. Now we have the next 50% Fib retracement to the upside at 1.6350. Looking at the intraday hourly chart the 1.6240 level looks like minor resistance. Tommorrow is the big voting day and on Friday could potentially be enormously volatile day in terms of results coming through and we wait and see how it goes. At the moment the rebound is on and the Sterling is strengthening. In terms of support there is real not support until we get back to 1.6160. We have broken the resistance around 1.6280 and filled that gap. We will see if we get a close above this gap and if we get it then bulls are in control.

EUR/USD — Daily Forecast Technical Analysis — September 17th 2014

In this video the Trader Guy looks at currency pairs EUR/USD pair for the  September 17th session.
EUR/USD — We did try to rally a bit during the session on Tuesday but found the 1.30 level to be a bit resistive. Now thats something I would have expected but I am willing to say this. I feel that at this market is oversold. So I think we are going to continue as we roll over into GMT day and continue to force our way up against the 1.30 level. Even if we fall from here a break of the bottom of the shooting star which normally is pretty negative sign, I think we don’t go any lower than 1.28 level. There is significant amount of support there based on longer term charts. So I am really looking for a fairly quiet session. The one thing that could change this things though, that if we get above 1.30 level the target is 1.32 to 1.3250 area and the gap up there could get filled. So there is a possibility that we could get a bit of reprieve. Quite frankly we believe selling rallies is the easiest way to trade this market.
We are in a downtrend and any rally could be a retracement. If 1.28 level gives away it is massively bearish. A pullback here is very likely. If we could break the top of this shooting star in the daily chart and if you are inclined to take short term counter trend trades then so be it. But for us personally we wait to sell at higher levels.

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