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Forexpros.com Daily Analysis - 04/07/2011

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ForexPros Daily Analysis July 04, 2011

Tomorrow: Free webinar on ForexPros - Using Candlesticks to Trade Forex

Expert: Marc Principato

Start: Tue, Jul 5, 2011, 10:00 EDT

End: Tue, Jul 5, 2011, 11:00 EDT

Candlesticks provide valuable information about price action when used correctly. From gauging momentum to better defining entries and exits on any time-frame, candlestick analysis provides unique advantages not found in other types of charting. Also covered in this presentation are the candle patterns that we find most useful for the short-term strategies that we employ in the chatroom each day.

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EUR/NZD Ready for a Move

So far, in 2011 the EUR/NZD pair has not made much progress. It started the year at around 1.7250 and now, six month later is at 1.7500, which not much more than a daily fluctuation. Nevertheless, that does not mean that the price action has been boring – quite the opposite.

Early on, the EUR/NZD rallied strongly, climbing to as high as 1.9569 in March. Since then, however, the price fell just as dramatically, touching 1.7350 in May, before settling down into a sideways motion, which prevails to this day.

This particular market phase should not last much longer. If we look at Bollinger Bands, we can see that this indicator has contracted a lot. In fact, the Bands are at a most narrow point since February, which was followed by an explosive breakout move. It is reasonable to expect similar outcome from this current congestion.

The direction of the eventual breakout is unknown, but based on the preceding trend, chances are that bearish sentiment will prevail. With that in mind, we should watch the trendline connecting recent minor lows, which was tested four times in a short time span. A move under that support, about 1.7450, could be a start of a new significant bearish price swing in the EUR/NZD.

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Forex Trading analysis written by Mike Kulej for Forexpros.

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Disclaimer:

Trading Futures and Options on Futures and Cash Forex

transactions involves substantial risk of loss and may not be suitable for

all investors. You should carefully consider whether trading is suitable for

you in light of your circumstances, knowledge, and financial resources. You

may lose all or more of your initial investment. Opinions, market data, and

recommendations are subject to change at any time.

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ForexPros Daily Analysis July 05, 2011

Today: Free webinar on ForexPros - Using Candlesticks to Trade Forex

Expert: Marc Principato

Start: Tue, Jul 5, 2011, 10:00 EDT

End: Tue, Jul 5, 2011, 11:00 EDT

Candlesticks provide valuable information about price action when used correctly. From gauging momentum to better defining entries and exits on any time-frame, candlestick analysis provides unique advantages not found in other types of charting. Also covered in this presentation are the candle patterns that we find most useful for the short-term strategies that we employ in the chatroom each day.

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---

Aussie & Kiwi review ahead the Australian cash rate

AUD/USD

There is lots of news regarding the Australian economy that have been published during the past two days. Building approvals went down by almost 8% and retails sales dropped 4.5%. The Australian cash rate will be published in the morning, without any surprises expected.

The current resistance area is at 1.08 and a strong break-up might take the Aussie to 1.10, but it will have to cross 1.09 before that. Nevertheless, there is a probability for declines as many investors might try to take profit of the recent risings. In that case, a technical correction might reach to 1.058-1.065.

Reminder: I had estimated last week, when the Aussie was at 1.045, that reversal was about to come. The Australian gained about 300 pips since then.

NZD/USD

The kiwi usually moves along with the Aussie, so it will be interesting to see how it reacts to the Australian cash rate announcement. The NZD is a powerful currency, especially in the last few days' momentum, but it doesn't necessary mean that the NZD will follow the AUD this time.

The 20 EMA is moving parallel to the 50 EMA, which indicates for prices strengthening. On the other hand, stochastic indicates for overbought so you have to be careful from entering the market in such high levels. A technical correction might cause a slide to 81.5-82.0

A break-up of the bullish-flag will be approval for the historical break-up in the monthly chart.

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Forex Trading analysis written by Bastian Rubben for Forexpros.

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Disclaimer:

Trading Futures and Options on Futures and Cash Forex

transactions involves substantial risk of loss and may not be suitable for

all investors. You should carefully consider whether trading is suitable for

you in light of your circumstances, knowledge, and financial resources. You

may lose all or more of your initial investment. Opinions, market data, and

recommendations are subject to change at any time.

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ForexPros Daily Analysis July 06, 2011

Tomorrow: Free webinar on ForexPros - Live Price Action Trading

Expert: Raul Lopez

Start: Thu, Jul 7, 2011, 09:00 EST

End: Thu, Jul 7, 2011, 10:00 EST

In this webinar Raul Lopez, expert analyst from Straight Forex, will analyze the market and look for trade opportunities based on a price action approach.

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Double Inverted Head and Shoulders in USD/CAD?

At present, the daily graph of the USD-CAD must be one of the least attractive looking charts of major currencies. After reaching a low of 0.9444, the price turned north and slowly proceeded to 0.9911, before selling off sharply about 325 pips. This drop was rapid for a change.

The overall behavior of this pair does not offer many clues about what the price might do next. However, when we look at highs and lows we can identify certain patterns. For example, the low 0.9444 is the Head of a small inverted Head and Shoulders formation, which projected the move to the recent high of 0.9911.

If we zoom out, we can see a possible much larger inverted H&S under development. The Head is still at 0.9444 but the Shoulders are at 0.9667 and 0.9578 respectively, with the two highs, 0.9966 and 0.9911 providing the Neckline. Together, we have a possible double inverted H&S pattern.

Obviously, the second, larger H&S is not complete yet. For that, the price will have to rally above 0.9900 again. If it happens, though, the USD/CAD could make an important, longer-lasting bottom. It is just one of possible developments in this pair, but it is plausible and worth following.

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Forex Trading analysis written by Mike Kulej for Forexpros.

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Disclaimer:

Trading Futures and Options on Futures and Cash Forex

transactions involves substantial risk of loss and may not be suitable for

all investors. You should carefully consider whether trading is suitable for

you in light of your circumstances, knowledge, and financial resources. You

may lose all or more of your initial investment. Opinions, market data, and

recommendations are subject to change at any time.

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ForexPros Daily Analysis July 07, 2011

Free webinar on ForexPros - Forex Psychology by Analyst Navin Prithyani

Expert: Navin Prithyani

Start: Mon, Jul 11, 2011, 09:00 EST

End: Mon, Jul 11, 2011, 10:00 EST

"Each of us traders have a unique strategy we use to engage the forex market with. We end up failing due to many factors caused by our very own mind. It is these very factors that are making a profitable trading strategy fail in progress. Changing the way one thinks is close to impossible but with certain tactics - tricking the mind to think what you need it to think can be achieved overnight." Learn the tips and tricks on Forex Psychology by Analyst Navin Prithyani.

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Dollar Index Pares Losses As Liquidity Returns

The dollar index had a bullish up day yesterday following 6 consecutive bearish candles. This bullish candle formed as liquidity returned to the market following the US holiday on the 4th July. A small correction is looking overdue and risk sentiment will potentially determine whether this move has legs or not. Moody’s downgrade of Portugal’s credit rating is the latest news relating to the Euro debt crisis.

The Euro is the primary driver for this “basket” of currencies and a failure of price to hold above the key 1.4500 psychological level and descending trend line resistance will encourage EUR/USD bears. However, the bullish engulfing bar printed week ending 3/7/11 is not invalidated until the candle low has been penetrated; further demand could be seen as price moves near the swing low of this candle.

The dollar index could possibly range between the 72.69 and 76.36 levels but the longer term trend points towards a breakout of this range to the downside being the most probable scenario - if we are to believe that the trend is our friend.

Initial event risk comes as the ISM Non-Manufacturing PMI is released today with further potential for volatility coming on Friday with the US Non-Farm Employment report.

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Forex Trading analysis written by Nick Simpson for Forexpros.

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Disclaimer:

Trading Futures and Options on Futures and Cash Forex

transactions involves substantial risk of loss and may not be suitable for

all investors. You should carefully consider whether trading is suitable for

you in light of your circumstances, knowledge, and financial resources. You

may lose all or more of your initial investment. Opinions, market data, and

recommendations are subject to change at any time.

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ForexPros Daily Analysis July 11, 2011

Today: Free webinar on ForexPros - Forex Psychology by Analyst Navin Prithyani

Expert: Navin Prithyani

Start: Mon, Jul 11, 2011, 09:00 EST

End: Mon, Jul 11, 2011, 10:00 EST

"Each of us traders have a unique strategy we use to engage the forex market with. We end up failing due to many factors caused by our very own mind. It is these very factors that are making a profitable trading strategy fail in progress. Changing the way one thinks is close to impossible but with certain tactics - tricking the mind to think what you need it to think can be achieved overnight." Learn the tips and tricks on Forex Psychology by Analyst Navin Prithyani.

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---

AUD/JPY at New Resistance

After the nice run up in March, when the AUD/JPY appreciated from 74.48 to 90.02, this pair has not done much. The Japanese became “lifeless” and the price is largely responding to what happens to the Australian Dollar. As a result, its action on the daily chart has been moving primarily sideways, with a downward slant.

In a quiet manner, the AUD/JPY dropped to 84.31, rebounded slightly and then made another low for the move at 84.05. Recently though, the volatility increased to some degree and the price advanced to 87.57 on Thursday, which is an important point right now because it coincides with couple of possible resistance levels.

There is a minor high from few weeks ago, as well as a down trendline. It is the confluence of these two factors that makes this particular resistance important. Whatever happens at this level, can easily determine the direction of the AUD/JPY for the near future.

An upside breakout here will likely mean a bullish continuation, perhaps going as high as to test the 90.02 high. On the other hand, a reversal can send the price back down to 84.05, maybe even lower. We should have the answer within next 1-3 days.

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Forex Trading analysis written by Mike Kulej for Forexpros.

---

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Disclaimer:

Trading Futures and Options on Futures and Cash Forex

transactions involves substantial risk of loss and may not be suitable for

all investors. You should carefully consider whether trading is suitable for

you in light of your circumstances, knowledge, and financial resources. You

may lose all or more of your initial investment. Opinions, market data, and

recommendations are subject to change at any time.

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ForexPros Daily Analysis July 12, 2011

Free webinar on ForexPros - Q3 2011 Outlook for the Major Currencies

Expert: Ilian Yotov

Start: Sun, Jul 17, 2011, 10:00 EDT

End: Sun, Jul 17, 2011, 11:00 EDT

- Review of the trends for the currency majors in Q3 2011

- Should we expect a reversal of the USD fortunes in Q3 2011?

- Will the carry trade remain strong in Q3?

- Is the worst behind for the EUR?

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Monthly Trading Report June 2011

It’s necessary that I give a monthly report of the results from the strategies I use for signals generation and trading. The trading results from my weekly trading updates aren’t discussed here, since those who follow my articles can see for themselves when I place or close trades based on the weekly analyses. The results on live and demo accounts are similar. Only position sizes are different – in proportion to each account balance.

The USDCAD Hedging strategy has been optimized to give more frequent and profitable signals. No stop loss has been hit since the inception of this trading idea on the pair. Because the USDCAD is caught in equilibrium zones most of the time, some simulation was carried out to determine whether the profitability of this strategy could be improved by reducing the fixed target per trade by 35 pips. This ensures constant survival in the market in which both buyers and sellers are often stopped out. Nonetheless this kind of reduction would make less sense in a strongly trending market. A future article from me will explain the details of this optimization. In the month of June, our equity grew by an additional 9.5% (closed profits). The total trading time is a maximum of 15 minutes per week. One of the big mistakes in trading is to think you’ve always got to be doing something.

The Gap Trading strategy suffered some losses in the first half of June, leading to a roll-down of close to 4% on the accumulated profit. However before the end of the month, the losses were recovered and we’ve moved ahead by another 2.2% (additional 440 pips at minimum). Part of your profit would sometimes be given away: the key is to give away as little as possible so that recovery would be very much easier. Now, based on past experiences, it’s possible to forecast whether a gap would be filled or not after it occurs – with stunning accuracy. Gaps in the currency markets are usually followed by powerful price movements in the week they occur. Gap trading is a highly lucrative trading strategy – provided you know how to interpret the price actions correctly. A future article would be devoted to this advanced gap trading method.

Ralph Vince, author of 3 books on money management, allowed 50 PhDs who knew nothing about money management or statistics to play a game with 60% accuracy (which is certainly much better than any game you’ll ever play in Las Vegas) for 100 trials. They weren’t given any incentive for winning – which can cause stupid behavior. They were merely instructed to make as much money as possible playing the game. Guess how many of them made money? Only 2 of them! And these results aren’t unique. The markets can remain irrational longer than most traders can remain solvent. That’s why majority of traders would continue to suffer in the financial markets unless they embrace safe money management.

Why is it important that we understand money management? Because the main reason people think that trading is a dead-end activity is that they are unaware of – or choose to ignore – the purpose and power of this principle. Make money and risk management the focus of your trading activity. That’s what will make you a successful trader.

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Forex Trading analysis written by Azeez Mustapha for Forexpros.

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Disclaimer:

Trading Futures and Options on Futures and Cash Forex

transactions involves substantial risk of loss and may not be suitable for

all investors. You should carefully consider whether trading is suitable for

you in light of your circumstances, knowledge, and financial resources. You

may lose all or more of your initial investment. Opinions, market data, and

recommendations are subject to change at any time.

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ForexPros Daily Analysis July 13, 2011

Free webinar on ForexPros - High Performance Trading for a Busy Lifestyle

Expert: Travis McKenzie

Start: Mon, Jul 18, 2011, 13:00 GMT

End: Tue, Jul 19, 2011, 14:00 GMT

Travis McKenzie will demonstrate the trading strategies and techniques he uses on a daily basis to fit trading into a busy lifestyle. He will discuss in detail his Precision Lifestyle Strategy which is a simply but extremely powerful combination of technical analysis tools which can be applied to any market and any timeframe. He will also dispel the myth that you can't earn a full time income from part time trading.

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The reversal in the CHF is working perfectly

The reversal in the Swiss, which I analyzed here, last week, is working perfectly. In spite of the strengthening of the USD against most of the major currencies, the Swiss is keeping its power, and it would have got even stronger if the US stock markets did not slide.

The reversal idea was brought up when the Swiss traded at 83.5, and the main goal was getting down to the historical low at 82.70, which the CHF eventually did. The question now is whether going in under that support or wait for correction up and another reversal. There are several approaches for this kind of situation, but I believe that it is dangerous to go into the market in extreme points, so you have to be careful.

Those of you who want enter the market in spite of the above, have to constantly monitor the trade, and choose an appropriate size for the current trading conditions. This pair has never traded under the support at 82.7, so it is difficult to point out a significant support under it. Therefore, the round number of 81.0 might be the level in which buyers will go in again.

*The reversal in the GBP/CHF from last week works even better and gained more than 200 pips so far.

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Forex Trading analysis written by Bastian Rubben for Forexpros.

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Visit Forexpros new Stock Quotes Section and our Eur Usd Forecast system.

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Disclaimer:

Trading Futures and Options on Futures and Cash Forex

transactions involves substantial risk of loss and may not be suitable for

all investors. You should carefully consider whether trading is suitable for

you in light of your circumstances, knowledge, and financial resources. You

may lose all or more of your initial investment. Opinions, market data, and

recommendations are subject to change at any time.

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ForexPros Daily Analysis July 14, 2011

Free webinar on ForexPros - Q3 2011 Outlook for the Major Currencies

Expert: Ilian Yotov

Start: Sun, Jul 17, 2011, 10:00 EDT

End: Sun, Jul 17, 2011, 11:00 EDT

- Review of the trends for the currency majors in Q3 2011

- Should we expect a reversal of the USD fortunes in Q3 2011?

- Will the carry trade remain strong in Q3?

- Is the worst behind for the EUR?

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---

The USD/CAD is approaching the weekly support

USD/CAD

The Canadian keeps its volatile move of the last few weeks, though it seems that it was calmed a little bit this week. The 50 EMA crossed below the 20 EMA, which is a positive sign for the CAD. There is a support around 0.955-0.956 and the long shadow that extends from Monday’s candlestick, increases the chances for continuation of the declines. A strong break-down might get to 0.944, which is a strong support on the weekly chart. A break-down there might cause sharper strengthening of the CAD, though in the short-term the currency will be influenced by Wall Street, so declines there might support the USD.

AUD/USD

The Australian had corrected in the few days of the week, mainly because of Wall Street plunging, but it struck yesterday and got close to the resistance at 1.08, which I have been following for few weeks. The more the resistance line goes through many points, and the more it lingers, so we say that the resistance is stronger, and the odds for a break-up are reduced. However, a real break-up here will trigger many automatic orders and cause a powerful ‘short-squeeze’. The target for this potential break-up, as I mentioned in the recent analysis, is at 1.10. Watch out from false –break; such a tempting pattern could be a trap.

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Forex Trading analysis written by Bastian Rubben for Forexpros.

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Disclaimer:

Trading Futures and Options on Futures and Cash Forex

transactions involves substantial risk of loss and may not be suitable for

all investors. You should carefully consider whether trading is suitable for

you in light of your circumstances, knowledge, and financial resources. You

may lose all or more of your initial investment. Opinions, market data, and

recommendations are subject to change at any time.

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ForexPros Daily Analysis July 18, 2011

Free webinar on ForexPros - High Performance Trading for a Busy Lifestyle

Expert: Travis McKenzie

Start: Mon, Jul 18, 2011, 13:00 GMT

End: Tue, Jul 19, 2011, 14:00 GMT

Travis McKenzie will demonstrate the trading strategies and techniques he uses on a daily basis to fit trading into a busy lifestyle. He will discuss in detail his Precision Lifestyle Strategy which is a simply but extremely powerful combination of technical analysis tools which can be applied to any market and any timeframe. He will also dispel the myth that you can't earn a full time income from part time trading.

Click here to join free

---

Commodity Currencies Will Be Bought Once S&P Consolidation Completes

The markets are consolidation as Japan was closed for holidays. But looking from a little bit larger perspective we may see dollar shorts soon, especially if commodities will remain bullish. The main reason for lower dollar is also a stock market, where S&P500 shows corrective price action on a daily. We are monitoring a triangle consolidation, and once this will complete, majors will rally. At the moment, wave E) of (4) still not done, as shown on the attached chart below.

Once the stocks will find buyers, commodity currencies such as Australian and Canadian dollar will find the support.

Aud/Usd Comments:

Aud/Usd bounced sharply higher at the end of June from 1.0389, where corrective wave (4) appears complete. Well, first impulsive leg found highs just below 1.0800 region, which was wave 1/A as labelled on the chart. As such, current price action must be corrective, with wave © underway that may test 1.05 once again, before uptrend resumes. We can also see a blue trend line in that area, that will also tend to react as a support.

Usd/Cad Comments:

After a sharp reversal from above 0.99, Usd/Cad made a nice corrective a-b-c pull-back within wave 2) that found the top at the trend line connected from 2011 lows. From there we can see an impulsive qualities, and if our count is correct, then pair should hit much lower levels in days ahead, as wave 3) appears to be underway with minimum targets seen at 0.94.

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Forex Trading analysis written by Gregor Horvat for Forexpros.

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Disclaimer:

Trading Futures and Options on Futures and Cash Forex

transactions involves substantial risk of loss and may not be suitable for

all investors. You should carefully consider whether trading is suitable for

you in light of your circumstances, knowledge, and financial resources. You

may lose all or more of your initial investment. Opinions, market data, and

recommendations are subject to change at any time.

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ForexPros Daily Analysis July 19, 2011

Tomorrow: Free webinar on ForexPros - Sharpening Your Edge Series: Finding Your Entry

Expert: Andrei Knight

Start: Wed, Jul 20, 2011, 08:00 PST

End: Wed, Jul 20, 2011, 09:00 PST

Learn how to spot the 3 different types of entries: trend-following, range, and counter-trend, as well as how to confirm those signals and fine-tune your timing. Join leading fund manager and trading coach Andrei Knight for this exciting instructional webinar which will transform the way you look at charts and help you achieve better trading results.

Mr. Knight is the author of "Trading Forex for a Living" from Harriman House, the "Institutional Trading Secrets Revealed" DVD course from Rockwell Trading, and much more.

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Is Reversal Next in USD/JPY?

Following weeks or relative inaction, the USD-JPY finally sprang to live last week. The price found solid resistance at the 100 SMA, around 81.60, and sold off for the next few days, closing below the critical 80.00 level. Before the trading stopped for the week, the lowest point reached was 78.45.

The USD/JPY touched that level twice, on two consecutive days, forming a possible “tweezer bottom”, well-known candlestick reversal pattern. Here this formation indicates a probability of a bullish reversal, even though the tweezer bottom is not regarded as a “strong pattern”, like a hammer or an engulfing line.

It formed in a general location, which supports the possibility of a reversal. The price has almost reached the 78% Fibonacci retracement level of the 76.12-85.52 dominant upswing, often a level where the trend reverses. It does not project how far the price should move from here, only that a probability for a change in trend direction has increased.

Unfortunately, tweezer bottom needs addition confirmation from the price action itself, meaning a bullish day. So far, there is none. Instead, the small dojis signal indecision. We need to see a more directional day, which will likely determine the next price swing in the USD/JPY.

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Forex Trading analysis written by Mike Kulej for Forexpros.

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Visit Forexpros new Forex Brokers Directory !

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Disclaimer:

Trading Futures and Options on Futures and Cash Forex

transactions involves substantial risk of loss and may not be suitable for

all investors. You should carefully consider whether trading is suitable for

you in light of your circumstances, knowledge, and financial resources. You

may lose all or more of your initial investment. Opinions, market data, and

recommendations are subject to change at any time.

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ForexPros Daily Analysis July 20, 2011

Today: Free webinar on ForexPros - Sharpening Your Edge Series: Finding Your Entry

Expert: Andrei Knight

Start: Wed, Jul 20, 2011, 08:00 PST

End: Wed, Jul 20, 2011, 09:00 PST

Learn how to spot the 3 different types of entries: trend-following, range, and counter-trend, as well as how to confirm those signals and fine-tune your timing. Join leading fund manager and trading coach Andrei Knight for this exciting instructional webinar which will transform the way you look at charts and help you achieve better trading results.

Mr. Knight is the author of "Trading Forex for a Living" from Harriman House, the "Institutional Trading Secrets Revealed" DVD course from Rockwell Trading, and much more.

Click here to join free

---

GBP/USD Still Contracting

Historically, the British Pound and its pair with the US Dollar, the popular “cable”, have been among the most volatile of all currency pairs. Recently, though the GBP/USD does not move as much as it once did. These days, even the EUR/USD has better daily trading ranges.

This process of contraction is probably best visible on the weekly chart of the GBP/USD. Following the panic of 2008, when this pair had dropped all the way to 1.3545, the price has been moving largely sideways. We can see how the movements have been getting smaller, with falling ATR.

The current Average True Range reading for this chart is the lowest in years, showing 275. In addition, the MACD also oscillates around the zero line, which confirms this trendless environment. Because this situation can last for many more weeks, perhaps months, those who trade trends should probably look for opportunities elsewhere.

Of course, that does not mean that the GBP/USD will remain like that forever. Eventually, the volatility will return prompting this pair to start moving in line with, or closer to, its historical norm. Until such time, shorter-term charts of the GBP/USD are a better choice.

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Forex Trading analysis written by Mike Kulej for Forexpros.

---

Visit Forexpros new Forex Brokers Directory !

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Disclaimer:

Trading Futures and Options on Futures and Cash Forex

transactions involves substantial risk of loss and may not be suitable for

all investors. You should carefully consider whether trading is suitable for

you in light of your circumstances, knowledge, and financial resources. You

may lose all or more of your initial investment. Opinions, market data, and

recommendations are subject to change at any time.

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ForexPros Daily Analysis July 21, 2011

Free webinar on ForexPros - Developing Traders State of Mind: The 5 Essential Skills to Peak Performance Trading

Expert: Rande Howell

Start: Mon, Jul 25, 2011, 10:00 EDT

End: Mon, Jul 25, 2011, 11:00 EDT

Developing an effective mindset specifically for trading is often the missing element in a trading plan and becomes the barrier to desired success. It is this blindness to the inner game of trading that stops the trader from having a breakthrough in achieving his potential. After endlessly crafting a methodology and platform into a trading plan that should give him (or her) an edge in the markets, the serious trader acknowledges that the problem in his quest for success is him (not his trading plan) and his psychology that actually puts his trading plan into play.

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Higher-lows pattern in GBP/USD

GBP/USD

The pound resumed strengthening against the USD, and made a “higher-lows” pattern (blue lines). The MPC meeting minutes was publish yesterday, and showed no change in the vote about the interest rate. Today is publishing the private sector net borrowing, which expected to be lower than the previous data, so the GBP might get a negative momentum. The British retails sales are publish today as well.

On the technical aspect, the pound made a positive pattern that increases the chances for more risings. The 200 SMA supports the GBP at 1.604-1.605. The nearest resistance is at 1.62, and strong break-up there can launch the pound to 1.64.

GBP/JPY

The Japanese currency is about to break the “bear-flag” pattern in the daily chart of the USD/JPY, but the strengthening of the pound makes the GBP/JPY to stamp. The triangle pattern, which I analyzed on Tuesday, still appears, but the direction will be determined according to the way those currencies trade against the USD. A break-up of 128 can take the pound to 130, whereas a break-down of the lower edge of the triangle at 126.5, can slide to 125.

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Forex Trading analysis written by Bastian Rubben for Forexpros.

---

Visit Forexpros new Forex Brokers Directory !

---

Disclaimer:

Trading Futures and Options on Futures and Cash Forex

transactions involves substantial risk of loss and may not be suitable for

all investors. You should carefully consider whether trading is suitable for

you in light of your circumstances, knowledge, and financial resources. You

may lose all or more of your initial investment. Opinions, market data, and

recommendations are subject to change at any time.

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ForexPros Daily Analysis July 25, 2011

Today: Free webinar on ForexPros - Developing Traders State of Mind: The 5 Essential Skills to Peak Performance Trading

Expert: Rande Howell

Start: Mon, Jul 25, 2011, 10:00 EDT

End: Mon, Jul 25, 2011, 11:00 EDT

Developing an effective mindset specifically for trading is often the missing element in a trading plan and becomes the barrier to desired success. It is this blindness to the inner game of trading that stops the trader from having a breakthrough in achieving his potential. After endlessly crafting a methodology and platform into a trading plan that should give him (or her) an edge in the markets, the serious trader acknowledges that the problem in his quest for success is him (not his trading plan) and his psychology that actually puts his trading plan into play.

Click here to join free

---

Possible Rounded Bottom in GBP/CAD

The Canadian Dollar was very active last week, due to enormous amount of data released in that country. Even though a lot of it was positive, like a hint of interest rates increase in the near future, the Canadian Dollar remained largely stalled.

The CAD pushed the US Dollar to a new three-year low, at 0.9424, but in relation to most other currencies, it either consolidated or even lost some ground. In case of the GBP-CAD, for example, the price is in a congestion zone, perhaps best visible on the intermediate term chart.

This pair sold off recently, falling from 1.6144 to last week’s low of 1.5246. However, the most prominent feature of this chart is the consolidation contained between 1.5525 and 1.5246. In the process, the GBP-CAD has built a possible rounded bottom, a little complicated but unmistakable.

In order to confirm this formation, the price must climb above a strong resistance of 1.5525. Currently, the GBP-CAD is not far away and appears ready to test that level again. With the price already above the 100 SMA and MACD turning positive as well, a successful breakout above the resistance could send the GBP-CAD on a 300 pips rally.

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Forex Trading analysis written by Mike Kulej for Forexpros.

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Disclaimer:

Trading Futures and Options on Futures and Cash Forex

transactions involves substantial risk of loss and may not be suitable for

all investors. You should carefully consider whether trading is suitable for

you in light of your circumstances, knowledge, and financial resources. You

may lose all or more of your initial investment. Opinions, market data, and

recommendations are subject to change at any time.

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ForexPros Daily Analysis July 26, 2011

Today: Free webinar on ForexPros - Candlestick Charting Basics

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Start: Tue, Jul 26, 2011, 10:00 EDT

End: Tue, Jul 26, 2011, 11:00 EDT

Candlestick Charting Basics. It is strange how the same set of information presented differently could lead to an entirely different view of price action. Learn candlestick charting from its basics to their application in real market conditions.

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AUD/NZD Waiting For a Catalyst

Commodity currencies have been among the best performing Forex instruments of past few months, especially the New Zealand Dollar, which continues to get stronger seemingly every day. Not only against the US Dollar, but in relation to its peers as well.

The AUD/NZD has been dropping since early March. It fell from 1.3789 to the recent low 1.2481, which is a large move for this pair. In fact, that is more than the GBP/USD and the EUR/USD moved during this time, making the Aussie/Kiwi cross worth following.

Recently, though, the AUD/NZD settled into a trading pattern, meaning range-bound. For about two weeks now, the price has been locked between 1.2611 and 1.2481, a tight consolidation when compared to preceding velocity. It is an unusually long stretch for the price to remain within such narrow band.

This indicates that market players are clearly waiting for an important catalyst to start a new move. An event, which could deliver a jolt to AUD/NZD, is the RBNZ rate decision on Wednesday. Direction of the price breakout is very likely to determine orientation of the next major move. Breaching of either resistance or support can easily push the price 300-400 pips within days.

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Forex Trading analysis written by Mike Kulej for Forexpros.

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Disclaimer:

Trading Futures and Options on Futures and Cash Forex

transactions involves substantial risk of loss and may not be suitable for

all investors. You should carefully consider whether trading is suitable for

you in light of your circumstances, knowledge, and financial resources. You

may lose all or more of your initial investment. Opinions, market data, and

recommendations are subject to change at any time.

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ForexPros Daily Analysis July 27, 2011

Free webinar on ForexPros - Understanding the simple rules of Money Management

Expert: Sunil Mangwani

Start: Mon, Aug 1, 2011, 10:00 EDT

End: Mon, Aug 1, 2011, 11:00 EDT

Part.1 - The Risk-to-Reward ratio.

A Trading Plan is often the thin line between success and failure in the markets & the ‘Trading Plan’ must incorporate the 3M’s (Money, Mind & method…in that order).

From these 3M's, it is “Money Management” which is the most important part of a trading plan…and ironically the most ignored.

If a trader follow the 2 basic rules of money management, it increases the probability of success –

1.) The Risk-to-Reward ratio.

2.) Position sizing - The ideal exposure of the trading capital.

In the first part of this series, we will have a look at the Risk-to-Reward ratio, understand the importance of this ratio and learn how to implement it in the “Trading plan”.

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Is EUR/GBP Ready to Resume Downtrend?

The Euro stabilized to some degree in days following the agreement to aid Greece for the second time. It seems that fears about possible dissolution of the common currency are gone, at least for now, allowing the EUR to rally against some of its counterparts.

In case of the EUR/GBP pair, this rally has not been very impressive. After a decline from 0.9083 to 0.8704, the price slowly appreciated to 0.8883 a level almost equal to 50% Fibonacci retracement level of the downswing. This creates a strong possibility of reversal and resumption of the downtrend.

On a positive note for the EUR/GBP, this recent run up broke through couple of resistance levels. The price managed to move above the Ichimoku cloud and the 100SMA. However, it failed to stay there, dropping to the current level of 0.8828.

Under these conditions, the EUR/GBP is likely to continue lower, especially if the MACD turns negative, too. The price could possibly test the support of 0.8704 within few days. We must watch the 0.8883 resistance, though – a move above that level might swing momentum into bullish again.

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Forex Trading analysis written by Mike Kulej for Forexpros.

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Disclaimer:

Trading Futures and Options on Futures and Cash Forex

transactions involves substantial risk of loss and may not be suitable for

all investors. You should carefully consider whether trading is suitable for

you in light of your circumstances, knowledge, and financial resources. You

may lose all or more of your initial investment. Opinions, market data, and

recommendations are subject to change at any time.

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ForexPros Daily Analysis July 28, 2011

Free webinar on ForexPros - Understanding the simple rules of Money Management

Expert: Sunil Mangwani

Start: Mon, Aug 1, 2011, 10:00 EDT

End: Mon, Aug 1, 2011, 11:00 EDT

Part.1 - The Risk-to-Reward ratio.

A Trading Plan is often the thin line between success and failure in the markets & the ‘Trading Plan’ must incorporate the 3M’s (Money, Mind & method…in that order).

From these 3M's, it is “Money Management” which is the most important part of a trading plan…and ironically the most ignored.

If a trader follow the 2 basic rules of money management, it increases the probability of success –

1.) The Risk-to-Reward ratio.

2.) Position sizing - The ideal exposure of the trading capital.

In the first part of this series, we will have a look at the Risk-to-Reward ratio, understand the importance of this ratio and learn how to implement it in the “Trading plan”.

Click here to join free

---

The Euro is weakening against JPY & CHF

EUR/JPY

The declines in Wall Street supported the USD against most of the major currencies. Both JPY & EUR were weakening against the US dollar, but the JPY is usually stronger than the EUR, so the EUR/JPY is more likely to slide than rise. The JPY is now dealing with the support at 112, and a break-down of yesterday’s low will complete a classic reversal pattern. The target would be the support at 110. The 20 EMA is resisting the EUR at 113.5, and a break-up there will be a positive signal for the Euro.

EUR/CHF

The reversal in Wall Street almost did not affect the CHF that continues getting stronger. Many investors see Switzerland as a stable and powerful economy and they feel safer to invest their money in the CHF when the markets are shaking. Therefore, most of the symbols that contain the Swiss currency tend to go with the CHF’s direction. A break-down of the support at 115.0 can take the price down to 114 and below. A break-up at 117 would be negative signal for the CHF against the EUR.

TIP:

When all currencies are weakening against the USD, you should try to find the weakest one.

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Forex Trading analysis written by Bastian Rubben for Forexpros.

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Disclaimer:

Trading Futures and Options on Futures and Cash Forex

transactions involves substantial risk of loss and may not be suitable for

all investors. You should carefully consider whether trading is suitable for

you in light of your circumstances, knowledge, and financial resources. You

may lose all or more of your initial investment. Opinions, market data, and

recommendations are subject to change at any time.

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