Text Forex

Technical Analysis for Tuesday 7/1/2014 from the team at www.texteforex.co.uk using the hourly candle charts

The FTSE went back and forth during the session on Monday, ending up unchanged for the day basically. This market continues to consolidate in this area, and therefore we think that waiting until we get a significant break higher, possibly above the 6820 level will be the easiest way to take the long position. Ultimately, we do not sell this market as it has been so parabolic and bullish lately, which of course shows real underlying strength. Any pullback at this point time should represent value, and we would be more than willing to buy candles below that show signs of that support.

The EUR/USD pair had a slightly positive session on Monday, bouncing off of the 1.36 level in a sign of support. If you look back at late November, you can see that there was a cluster back there that does suggest that this support is valid. It’s difficult to imagine this pair moving to drastically before the nonfarm payroll numbers, so bit of a bounce from here would exactly be too far out of the question. Nonetheless, we would not expect this pair to get above the 1.38 level anytime soon, at least not until the nonfarm payroll numbers would suggest US dollar weakness. Until then, expect choppy and sideways action.

The GBP/USD pair fell initially during the session on Monday, but as you can see bounce back above the 1.64 handle by the end of the day. This bullish action of course formed a nice-looking hammer, we now think that this pair is ready to continue going higher, challenging the 1.65 area, and then potentially higher levels than that. Ultimately, we think this market will go to the 1.70 handle based upon British pound strength more than anything else, as the US dollar isn’t exactly a week currency at the moment. With that, we are deftly buyers on a break in the top the hammer as we think that the uptrend continues.

All things being equal, selling is not possible, basically because of the way that the British pound has been acting lately, and the fact that the 1.63 level should continue to be supportive. The shape of the candle of course tells us that there is buying pressure below, thereby making the market very interesting to us.

Quite frankly, the British pound is one of the few currencies out there that we like against the US dollar for the longer-term, as the Pound has been so strong against most currencies around the world. You can also use this currency pair is a bit of a signal for relative strength, as the pair going higher signifies that the British pound should be going much higher against other currencies such as the Swiss franc, Japanese yen, or many of the other commodity-based currencies. After all, if the British pound look strong against the US dollar, is going to look especially strong against the Japanese yen as it is being sold off.

That being the case, this is a pair that you should be watching even if you are trading it. There might be better returns to be had by buying the British pound against other currencies, or we may just find a nice grind higher in this market. It’s a scenario which you can play either way, simply because it comes down to your personal comfort.

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Latest Technical analysis was for Thursday 3/10

Results for Week Ending 31/8/2013 from our forum at www.textforex.co.uk
TRAILING STOP STRATEGY

Monday No Trades Advised

Tuesday No Trades Advised

Wednesday +40

Thursday +20

Friday +20

Total for the week +80

Total to date +9915

FORUM TRADES

Monday No Trades Advised

Tuesday No Trades Advised

Wednesday -11

Thursday -20

Friday -40

TOTAL for the week -71

TOTAL since April 2009 +32368

Averaging 820 per month

TEXT TRADES

Monday +40

Tuesday Non Advised

Wednesday +140

Thursday Non Advised

Friday Non Advised

possible max profit for the week of +180 points

+27346 to date (137 weeks) AVE 199 pts per week

MORNING CALL

Monday No Trades Advised

Tuesday No Trades Advised

Wednesday +17

Thursday -40

Friday +19

Total for week -4 (grand total 5902)

Total for August -7