20:46 Gold ticks lower despite risk-off sentiment
The bullion failed to rise on Thursday, despite massive losses on the stock market and remained stuck in a narrow range, trading near 1,236 USD, still below the critical resistance of 1,242 USD.
The major selling zone is still at around 1,242 USD, where October highs are located and if the price jumps above this level, we could see another leg higher toward the 200-day moving average, which is currently at 1,255 USD. Jumping above this level might confirm the bullish breakout for the next weeks.
The support is currently at 1,230 USD and if taken out, further losses toward the broken trend line at 1,225 USD could happen, with the next bullish bids probably at the 100-day average at 1,210 USD. Gold needs to stay above this trend line to remain with a short-term bullish outlook.
However, the inability to move higher despite the recent sell-off elsewhere is pointing to a possible bearish reversal, if bulls don’t push the price above 1,242 USD quickly.
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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.