FOREX TRADING

There are many candlestick trend reversal and trend continuation patterns. These candlestick patterns can help you confirm a trend reversal or a trend continuation. Inverted Hammer Candlestick Pattern is an important trend reversal pattern that can give accurate signal on trend reversal. However, this pattern occurs rarely but when it does, it means that the trend will reverse itself soon.

The first day is a usual bearish candle in the downtrend. On the second day or what you call the signal day you find the inverted hammer something quite rare as the price action required to produce such a pattern seldom takes place.

An inverted hammer has a very small body at the bottom with a long wick at the top. As the high is way above the body, most of the trading took place near the small area close to the low. This low serves as the support for the upcoming days.

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Easy Fibonacci Trading Guide – 4 Simple Steps to Trading with Fibonacci

If you’re just like anybody else who’s got demanding lifestyle, I am sure you don’t want to spend most of your time sitting and waiting for the market to move for you. Years of experience has taught me some techniques that allowed me to cut my sitting and waiting time to a minimum. I found that I don’t need to watch the markets hour in hour out. Would you like to know these techniques so you can also do your trading in just a short period, leaving you time to do things that the money from trading allow you to do? Then, read on!

1. Keep your trading technique simple and understandable. It’s important for you to decide right away that you’re going to make trading work for you, not you working for the markets.

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U.S. Review

What if Sustainable is also Insufficient?

• Although the recovery continues to take shape and the pace of growth this year appears to be on trend, there is a growing realization that such growth is insufficient to significantly lower unemployment or generate enough public sector revenues to meet campaign promises.
• Moreover, there are also growing concerns that the applied stimulus to the economy today to reinvigorate growth may lead to lurching the economy in the direction of higher inflation and unsustainable deficits in the near future–from the frying pan into the fire?

When Good is Not Good Enough

Chairman Bernanke’s testimony this week stated the increasingly obvious reality of this recovery “Notwithstanding these positive signs, the job market remains quite weak, with the unemployment rate near 10 percent and job openings scarce.” Meanwhile, the Obama administration projected 9.8 percent unemployment at the end of this year. On the budget front the outlook for local, state and federal budgets is for significant deficits that will force local and state spending cuts while raising concerns about the long-run position of the federal debt. Therefore, in a year where economic growth is expected to come in at trend, the inability of the economy to deliver lower unemployment and more balanced public finances is worrisome. By the way this is also an election year. (more…)

USD Lower, GDP Revised Higher, Existing Homes Sale Drop

• USD: Lower, pressured by a recovery in global equity markets, Q4 GDP revised up, existing home sales drop
• JPY: Higher, factory output expands and retail sales jump, Yuan revaluation speculation
• EUR: Higher, inflation falls, gains in cross to GBP, short covering
• GBP: Lower, UK Q4 revised up, Q4 government spending higher than expected
• CAD and AUD: AUD & CAD higher, strong Australian credit demand, Canada’s C/A deficit narrows

Overview

The USD traded lower Friday pressured by a modest improvement in risk sentiment as equity markets rally in reaction to report of an upward revision in UK and US Q4 GDP, stronger industrial production and retail sales in Japan and strong private sector credit demand from Australia. USD was also pressured by Yuan revaluation speculation. Yuan forwards traded higher in reaction to a newspaper report that the Chinese government is assessing the potential impact of currency gains. US economic data was mixed with Q4 GDP revised higher, Chicago PMI came in higher than expected and Michigan sentiment was revised slightly lower. Existing home sales posted an unexpected sharp decline. Existing home sales are at a seven month low. USD remained on the defensive despite mixed US economic data as US equity markets trade both sides of settlement.

Focus turns to next week’s central bank policy meetings in Australia and Canada on Tuesday and the UK and EU on Thursday and Friday’s release of US February unemployment. The BOC is expected to maintain steady rate policy, the RBA is expected to hike rates 25 bps, the ECB is expected to remain on hold and there is uncertainty about whether the BOE will maintain its current level of asset purchases. US February unemployment is expected to post a modest rise with nonfarm payrolls unchanged from last month. (more…)

Daily Technical Analysis

EURUSD Outlook

The EURUSD attempted to push lower yesterday, bottomed at 1.3451 but closed higher at 1.3549. On h1 chart below we can see that price has slipped above the minor trendline resistance (yellow) indicating potential upside correction testing the upper line of the minor bullish channel. The main scenario should remain bearish but the fact that price already in oversold area may produce some minor upside correction. Immediate resistance at 1.3625 area. Break above that area and violation to the minor bullish channel could trigger further upside momentum but note that overall the pair is still in a bearish mode. After Greek debt and financial problem, traders now concern about the potential economic problem in Spain which could continue to pressure the Euro in longer term. Initial support at 1.3500 area. Break below that area could trigger further bearish momentum testing 1.3400 region.

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USD Higher, Jobs Claims Rise, Durable Goods Strong

• USD: Higher, concern about Greek debt troubles and weaker US jobs data fuels risk aversion
• JPY: Higher, supported by safe haven demand and gains in cross trade
• EUR: Lower, S & P may downgrade the Greek debt rating, Greek rescue may be at risk
• GBP: Lower, UK Q4 business investment dropped sharply
• CAD and AUD: AUD & CAD lower, pressured by a spike in risk aversion, RBA rate hike speculation ignored

Overview

The USD traded higher and the JPY surged supported by a spike in risk aversion sparked by report of a sharp rise in US jobless claims and fresh concern about the Greek debt crisis. Wednesday the US reported that January new home sales fell to a record low. The decline in home sales follows Tuesday’s release of a sharp drop in US consumer confidence consumer confidence. These reports and today’s jobs claims report generate concern about the outlook for the US recovery. A report in the UK telegraph that the Greek rescue plan may be in jeopardy because of comments made by the Greek Deputy PM about Germany’s Nazi war atrocities coupled with increased risk of a downgrade of the Greek debt rating sent European currencies lower. The JPY traded at a one-year high versus the EUR. GBP traded at a nine month low versus the USD pressured by concern about UK debt and report a sharp drop in UK Q4 businesses investment. Commodity currencies traded lower pressured by a spike in risk aversion sparked by weaker equity market trade. AUD weakened despite RBA rate hike speculation. RBA watcher McCrann says there’s nothing standing in the way of a 25bps rate hike next Tuesday. US economic data was mixed with jobless claims posting a sharp rise. Jobless claims are at their highest level since last November. Durable goods came in almost 3 times as strong as expected. The jump in durable gods reflects a sharp increase in civilian aircraft orders. USD extended its gains and the JPY traded at a new high for the day after the release of the unexpected spike in US jobless claims. Fed Chairman Bernanke suggested that weather may be impacting the jobs report but his comments had limited impact and stocks traded sharply lower in reaction to jobless claims report. (more…)

Daily Technical Analysis

EURUSD Outlook

The EURUSD attempted to push higher yesterday, topped at 1.3625 as a temporary reaction after The Fed decided to keep the interest rate low but further bullish momentum was rejected as price closed lower at 1.3539. This fact should keep the bearish scenario intact. On h4 chart below we can see price is now testing the minor trendline support (yellow). Break below that trendline should trigger further bearish momentum testing 1.3444 – 1.3400 area. Immediate resistance at 1.3580 area. Break above that area could trigger further bullish correction but overall I still prefer a bearish scenario with sell on rallies strategy.

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USD Lower, Bernanke Says Rates to Stay Low, Stocks Rally

• USD: Lower, new home sales declined by 11.2%, Bernanke says rates to stay low for an extended period
• JPY: Higher, exports rise, safe haven demand as Asian equities decline
• EUR: Higher, EU industrial orders rise,ECB’s Gonzalez-Paramo downplays risk of contagion from Greece
• GBP: Mixed, BOE’s Posen said he expects UK inflation to remain subdued, QE will be expanded if needed
• CAD and AUD: AUD & CAD higher, China tells commercial lenders to restrict lending to local governments

Overview

The USD traded mixed to lower Wednesday with the EUR rebounding supported by report of better than expected EU industrial orders and speculation that Bernanke will signal that US interest rates will remain at zero for some time. The GBP continues to underperform pressured by a dovish statement from the BOE’s Posen. Posen said that the BOE will expand quantitative ease if necessary. Commodity currencies opened lower pressured by weaker Asian equity market trade and report that China took action to curb lending. China’s regulators told its commercial banks to restrict lending to local governments. Commodity currencies turned higher in US trade, tracking a rally in US equities sparked by Bernanke’s testimony. JPY traded higher for the fourth day in a row supported by report of a jump in Japan’s January exports. In his testimony before Congress Fed Chairman Bernanke said the economy still needs help, a sustained recovery remains in question and interest rates will stay low for an “extended period.” Bernanke went on to say the Fed will have to tighten at some point to prevent inflationary conditions but he gave no clue when that point might be. Bernanke’s testimony was seen a bit more dovish than expected as he confirmed the Fed extend period language. Some analysts have suggested that the Fed’s discount rate hike last week would be a prelude to the Fed dropping the extended period language from its next communiqué. This seems less likely after today’s testimony. The Fed’s Bullard said rates may stay near zero for all of 2010 and the USD trades lower as stocks rally. US economic data was weak with new home sales reported down by a record 11.2%. (more…)