Most Frequently Occurred Price Patterns In Forex Trading

If you are a long term trader, then you should have a close eye on various price patterns that occur frequently at various timeframes. These patterns may yield huge and easy return with minimum risk. Let us have a look at some famous price patterns.

Head & Shoulder (H&S)

H&S is one of the most frequently occurred price patterns. It consists of four main parts that are:

·         Left Shoulder

·         Head

·         Right Shoulder

·         Neckline

The most important component is the neckline. Neckline is the lowest point between right and left shoulder as shown in following chart.

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USD/CAD Eyes 1.0850 As Canada’s Inflation Remains Steady

The US Dollar (USD) extended downside movement against the Canadian Dollar (CAD) on Friday, dragging the price of USD/CAD to less than 1.0915 following the release of Bank of Canada (BoC) inflation reports. The bias however remains bullish due to Higher High and Higher Low in the recent wave.

Technical Analysis

As of this writing, the pair is being traded around 1.0913. A support may be seen near the current level, the confluence of 38.2% fib level and 200-Day Simple Moving Average (SMA) and then 1.0858, the confluence of 50% fib level and 100-Day SMA as demonstrated in the following chart.

usdcad news fx

On the upside, the pair is expected to face a hurdle near 1.0980, the intraday high of today ahead of 1.1000, the psychological level and then 1.1100, the swing high of the recent upside rally and psychological number. The bias will remain bullish as far as the 1.0810 support area is intact.

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USD/JPY Rallies To 6-Year High As Fed Tapering Continues

The US Dollar (USD) continued its record break spree against the Japanese Yen (JPY) on Thursday, increasing the price of USD/JPY to more than 108.50 following the Fed monetary policy announcement. The bias remains extremely bullish due to Higher High in the ongoing upside rally.

Technical Analysis

As of this writing, the pair is being traded around 108.59. A huge hurdle can be seen near 110.65, the high of 2008 ahead of 112.66, the 76.4% fib level as demonstrated in the following chart. The long term bias will however remain bullish as far as the 100.82 support area is intact.

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On the downside, the pair is likely to find a support near 106.80, the low of September 16 ahead of 105.57, the 61.8% fib level and then 105.00, the psychological level. The pair which is being traded at the six-year high would threaten the 2007-high if 110.65 is broken.

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Bitcoin Hits $434, Peercoin Doubles in Two Days

It has been an exciting two days for cryptocurrencies. Bitcoin broke out of its 11 day range, Peercoin prices doubled and Namecoin had a sympathy rally of around 30 percent. But let’s start from with big brother Bitcoin. As suggested in our article two days ago, the constant pushing on $460 eventually lead to a break lower. The support at $450 held up for few hours but during the evening yesterday prices broke lower and traded down to a new multiday low of $434.17. From here, BTC/USD had a sharp rally of 15 dollars. One coin is currently selling for $447.

BTCUSDH4

Given the strength of the recovery, we think that the selling pressure may subside, at least in the next day or two. If BTC manages to climb back above the range support at $460, this may put an end to further losses. But unless the cryptocurrency can take out the important resistance at $500, gains will be limited. Overall the technical picture is still negative but the recent strong bounce may stall further losses.

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Gold Remains Vulnerable As Fed Monetary Policy Weighs

Gold extended upside movement on Wednesday for the third day in a row, increasing the price of the yellow metal to more than $1235 an ounce. The long term bias however remains negative or bearish due to Lower Low in the recent correction wave.

Technical Analysis

As of this writing, the precious metal is being traded around $1236 an ounce. A support may be seen near $1225, the swing low of the recent dip ahead of $1200, the psychological level and then $1180, the low of 2013.

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On the upside, the metal is expected to face a hurdle near $1242, the intraday high of yesterday ahead of $1253, the 23.6% fib level and then $1271, the 38.2% fib level as demonstrated in the above chart. The bias will remain bearish as far as the $1296 resistance area is intact.

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Bitcoin Pushing on $460 Lower Bound

Bitcoin is pushing on the lower bound of the trading range mentioned in our Thursday article. In the past five days, BTC/USD has remained well inside the $460 – $483 bounds that mark this congestion area. Still, as can be seen on the chart below, bitcoin has consistently pushed on the lower bound. Today, prices got as low as $460.90 before rebounding. One coin is currently selling for $462.10.

BTCUSDH4

 

Taking into account the price action of the past few days, a break below $460 is the more likely scenario. Right below this level, the $450 mark may provide some support, followed by the round psychological $400 figure. But keep in mind that both of these two levels are relatively untested and it is possible that falling prices will just cut through them like knife through butter. Lower still, the $330 to $350 area will likely be strong support for BTC/USD. This was the stopping point for bitcoin’s fall in August.

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AUD/USD Holds Off 0.9000 Ahead of RBA Minutes

The Australian Dollar (AUD) pulled back sharply against the US Dollar (USD) on Monday, increasing the price of AUD/USD to more than 0.9020. The long term bias has already turned to bearish due to Lower Low in the ongoing correction wave.

Technical Analysis

As of this writing, the pair is being traded around 0.9019. A support may be seen near 0.8980, the intraday low of Monday as well as 61.8% fib level ahead of 0.8890, a major horizontal support as demonstrated in the following chart.

audusd-d1

On the upside, the pair is expected to face a hurdle near 0.9080, the 50% fib level ahead of 0.9181, the confluence of 200-Day Simple Moving Average (SMA) and 38.2% fib level. The bias will remain bearish as far as the 0.9400 resistance area is intact.

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Gold Halts Downside Movement As Bulls Gain Momentum

Gold finally showed a moderate pullback near the $1232 support area, apparently leaving a potential bullish pin bar on the daily chart that would be considered a major sign for the bullish reversal although the bias has already been turned to bearish due to Lower Low in the recent correction wave.

Technical Analysis

As of this writing, the precious metal is being traded around $1235. A support may be seen near $1232, the intraday low of today ahead of $1200, the psychological number and then $1180 which is a monster support in short to medium term.

gold fxopen

On the upside, the yellow metal is expected to face a hurdle near $1258 an ounce, the 23.6% fib level ahead of $1275, the 38.2% fib level and then $1285, the 200 Daily Simple Moving Average (DSMA) as shown in the above chart. The bias will remain bearish as far as the $1344 resistance area is intact.

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Bitcoin May Be Settling Back into a Range

Bitcoin prices may be settling back into a trading range after the important Braintree news announcement failed to trigger a rally in the cryptocurrency (more on this here). Two days ago BTC fell to $459.70 but few hours later prices peaked at over $483 per coin. Since then however BTC/USD has eased back and is now trading below the $470 mark. This unpredictability is one of the marks that we may be entering another rangebound period.

btcsept

What are the potential breakout points for bitcoin? On the top end, the round $500 figure needs to be left behind before the bulls can have any hope to turn the downward tide. On the lower end, while the most recent down move saw prices spike to a low of $460, it may be more prudent to wait for a break of $450 before making any bearish bets. This is because the range is fairly new and barely two days in the making. If you want to be on the safe side, wait a few more days for BTC to clearly define the outlines of the new congestion area.

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GBP/USD Consolidates As Britain’s Industrial Production Exceeds Expectations

The Great Britain Pound (GBP) extended upside movement against the US Dollar (USD) on Wednesday after leaving an indecision doji on the daily chart yesterday thus apparently kicking off the consolidation phase. The sentiment is very bearish due to Lower Low in the recent dip amid Scottish independence news.

Technical Analysis

As of this writing, the pair is being traded around 1.6118. A support  can be seen near 1.6060, the swing low of yesterday ahead of 1.6000, a monster support due to the confluence of 200 Weekly Simple Moving Average (SMA) and 50% fib level of the last major rally.

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On the upside, the pair is likely to face a hurdle near 1.6250, a major horizontal support ahead of 1.6489, the 38.2% fib level and then 1.6621-43, the high of the recent consolidation phase & 50% fib level as demonstrated in the above chat. The sentiment will remain bearish as far as the 1.6650 resistance area is intact.

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