Technical analysis

21 September 2018
  • 15:34

    USDCHF: Dollar Under Pressure, Targets 0.95

    As the EURUSD pair surged on Thursday, the USDCHF pair did the opposite and dropped sharply as these two are negatively correlated to each other.

    The USDCHF pair is now sliding at the lower trend line of the bearish trend line and it appears this trend line could be broken to the downside very soon. Should this happen, bears would push the greenback lower to the first stronger support of 0.9535. However, it's possible that the psychological level of 0.95 could be in play eventually.

    On the upside, bulls need to push the greenback back above 0.9640 to stop the immediate bearish threat. If this is achieved, further relief rally toward 0.97 could occur.

    Fundamentally, there is an uncertainty in regards to the the Swiss franc against the greenback, especially in the times of a risk-on sentiment. Moreover, the yield differential is very negative, when shorting this pair. Therefore, dip buyers could reemerge at some of the mentioned supports.

    USDCHF: Dollar Under Pressure, Targets 0.95 21.09.2018

    Analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal Opinion of the Author does not represent a statement or an investment advice made by TeleTrade. Indiscriminate reliance on illustrative or informational materials may lead to losses"

  • 15:33

    EURUSD: Euro Posts Bullish Breakout, Further Gains Likely

    The EURUSD pair surged more than 100 pips on Thursday and closed at two-month highs, slightly below the 1.18 handle. On its way up, the euro has risen about the very important resistance of previous tops at 1.1745 and this is now the key support for bulls in this upside wave.

    Should the rally continue, the next target might be at another strong level of 1.1850, where previous highs and lows were converged and larger selling offers could be located here. If this level falls, the trend could switch to bullish, targeting the psychological level of 1.20.

    On the downside, the price needs to stay above the mentioned support of 1.1750 to continue in this bullish structure. Falling below could mean further correction toward the bullish trend line, which is currently at 1.1650/60. However, if the pair defends this trend line, the outlook still seems positive.

    The greenback failed to capitalize on rising US yields, which have surged recently and sentiment remains bearish for the US dollar as it has been dropping broadly in the recent days (excluding against the yen).

    EURUSD: Euro Posts Bullish Breakout, Further Gains Likely 21.09.2018

    Analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal Opinion of the Author does not represent a statement or an investment advice made by TeleTrade. Indiscriminate reliance on illustrative or informational materials may lead to losses"

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Forex Technical Analysis

The basics of fundamental and technical analysis of the Forex market

The dynamics of the currency rates in currency markets depends on many reasons. That is why, in order to competently analyze Forex, we need to evaluate all economic performance indicators. This primarily relates to the macroeconomic factors such as GDP, the dynamics of inflation, interest rates set by central banks and other fundamental reasons of the formation and dynamics of market trends.

In order to take a decision quickly, it is necessary to be aware of any changes of the macroeconomic conditions which the investment climate directly depends on. This information is usually provided in special reports, releases of which can dramatically change currency quotations on the stock exchange. Such an extremely useful tool as a trader’s economic calendar is helpful in following macroeconomic reports.

Forex EUR USD technical analysis is based on the comparison of the current currency rates with the data for the previous periods as well as on the evaluation of the rate dynamics for particular periods of time by using different mathematical forecast methods. The received information is provided only in the form of statistical calculations among which various graphical tools come in handy. By considering charts and geometric models, an experienced trader quickly draws corresponding conclusions and takes a decision about operations with the currency pair.

The analysis of Forex market trends is a difficult task for a novice

The start of trading in the currency market is complicated by a large amount of information which varies in its diversity and gets constantly updated. No beginner can choose a trading signal and evaluate its significance in this flow of information.

Forex expert EUR USD technical analysis from the largest broker’s offices is a real help for a beginner. On the TeleTrade website, you will not only find all current information but also learn about the detailed analysis of equity, Forex and currency markets together with fundamental research on the macroeconomic factors and recommendations by the leading experts. The professional approach to market research is a guarantee of the quality of Forex analytics and the most lucrative investments and minimum risk.

Being guided by the results of expert multifactor analysis, it is practically impossible to miss a new Forex trend. This means that you will be able to build new trading strategies for the long term and move on to a fundamentally new profit level.

In order to provide an exhaustive picture of the Forex market, we constantly update the information, including current and significant events that are analyzed by our experts.

The basic postulates of Forex market technical analysis

Forex technical analysis is based on three main postulates:

  • The price is always governed by a trend

According to this axiom, the movement of prices always conforms to a specific Forex trend. In this regard, there is a possibility to single out the intervals of currency rate movements that go in the same direction within certain time frames. The direction can be upward (i.e. bullish trend, the rate continuously goes up), downward (i.e. bearish trend, the rate continuously goes down) and sideways (i.e. flat trend, gradual fluctuations of the currency rate within the same price range).

  • Everything is factored in to the price (the main postulate of the Dow theory – the base of technical analysis)

In accordance with this axiom, all the factors which may influence the currency are already factored in. Irrespective of the reasons and nature of events which affect the demand and supply, they are instantly factored in by the market. Thanks to this, while carrying out Forex technical analysis, there is no need to study macroeconomic factors.

  • History always repeats itself

According to this axiom, the dynamics of currency rates is always cyclic: currency prices go up and down, and sideways, etc. As a result, the methods of technical analysis successfully working in the past will also successfully work in the present and in the future. Such a cyclical nature is determined by certain aspects of the human psychology: consistent reactions to particular events lead to the fact that trends tend to reoccur.

The process of technical analysis is based on identifying typical patterns and distinct trends. A chart pattern is a distinct formation appearing on price charts. The most significant and well-known patterns are:

  • ‘Flag’ is a characteristic type of the graphical curve when there is an intermittent change in the currency rate amid a continuous uptrend or downtrend;
  • ‘Double top’ (two peaks on the top of an uptrend) is a so-called reversal pattern, a characteristic type of the graphical curve which signals about a possible trend reversal;
  • ‘Triple top’ (three peaks of the same range) and its variety called ‘head and shoulders’ (the first and third peak are lower than the middle one) – this is a reversal pattern, with a typical line break below the support level;
  • There is another pattern called triangle which is regularly encountered on charts in the currency market.

Forex trends identified in the process of technical analysis are the basis for making conclusions and taking decisions about closing and opening transactions.

Considering the availability of the programs allowing to quickly find the patterns and analyze the trends, many traders use only technical tools to assess the market situation.

However, we recommend you not to restrict yourself to using exclusively mathematical models when conducting the Forex analysis. An ideal variant is the complex account of the fundamental factors and results of technical analysis. Such an approach secures the most accurate forecast and, consequently, the most profitable Forex trading.