price reversal

On Monday, the GBP/USD pair managed to show even lower volatility than the EUR/USD pair, with only 37 pips. Therefore, there is no point in analyzing the movements because there simply weren't any.     The entire day was characterized by absolute flatness, which is not surprising given the complete absence of fundamental and macroeconomic events, as well as the status of a holiday in the US.   The downward trend remains intact, so nothing has changed for the pound and the dollar: the latter should continue to rise. There are currently no trend lines or channels due to the weak movement, but there is no doubt about the downtrend.     If you tried really hard you could find one signal on the 5-minute chart. At the beginning of the European trading session, the pair technically bounced off the range of 1.2351-1.2367 but failed to move down even by 20 pips, which is not surprising considering the overall volatility of 37 pips.   Beginners could have opened a short position based on this signal, but by the start of the US session, the pair hardly moved, so the trade could have been closed practically anywhere with zero profit. Trading tips on   Tuesday: As seen on the 30M chart, the GBP/USD pair continues to trade lower, but in the past few days, we have observed more low-volatility flatness than trending movement. We continue to expect further decline as we believe that the pound has not fallen sufficiently strong yet.   The key levels on the 5M chart are 1.2171-1.2179, 1.2245-1.2260, 1.2351-1.2367, 1.2420, 1.2470, 1.2507-1.2520, 1.2597-1.2616. When the price moves 20 pips in the right direction after opening a trade, a stop loss can be set at breakeven. On Tuesday, there are no important events or reports scheduled in the UK or the US.   We are in for another completely dull day. Volatility may be low again, and there may be a lack of intraday trending movement. Basic rules of the trading system: 1) The strength of the signal depends on the time period during which the signal was formed (a rebound or a break). The shorter this period, the stronger the signal. 2) If two or more trades were opened at some level following false signals, i.e. those signals that did not lead the price to Take Profit level or the nearest target levels, then any consequent signals near this level should be ignored. 3) During the flat trend, any currency pair may form a lot of false signals or do not produce any signals at all. In any case, the flat trend is not the best condition for trading. 4) Trades are opened in the time period between the beginning of the European session and until the middle of the American one when all deals should be closed manually. 5) We can pay attention to the MACD signals in the 30M time frame only if there is good volatility and a definite trend confirmed by a trend line or a trend channel. 6) If two key levels are too close to each other (about 5-15 pips), then this is a support or resistance area.   How to read charts: Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them. Red lines are channels or trend lines that display the current trend and show which direction is better to trade. MACD indicator (14,22,3) is a histogram and a signal line showing when it is better to enter the market when they cross.   This indicator is better to be used in combination with trend channels or trend lines.   Important speeches and reports that are always reflected in the economic calendars can greatly influence the movement of a currency pair.   Therefore, during such events, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement. Beginners should remember that every trade cannot be profitable.   The development of a reliable strategy and money management are the key to success in trading over a long period of time.    

The GBP/USD pair exhibited identical movements on Friday. It remained flat during the European trading session and experienced a decline during the American session. Therefore, there is no need to repeat the details. The strengthening of the US currency was naturally triggered by the Nonfarm Payrolls report, which significantly exceeded expectations.   However, the downward trendline (the second one) was previously breached, technically making the current trend upward. Nevertheless, we still don't see any reasons for the British currency to show growth in the medium-term perspective, so we expect a new decline in the pair. There were no important publications or events in the UK, and the pair demonstrated logically consistent movements on Friday.     On the 5-minute chart, the trading signals on Friday were not the best due to the flatness during the first half of the day. Only one signal was formed during that time, which was a buying signal near the level of 1.2520, and it should have been closed with the opening of the American trading session, as important data was expected to be released in the US, which could have caused the pair to move in any direction.   Immediately after the release of the data, a buying signal was formed in the range of 1.2507-1.2520, but it should have been ignored as the values of the US reports clearly favored the dollar. However, the next selling signal could and should have been traded. Eventually, the price dropped to the level of 1.2445, where short positions should have been closed. The profit amounted to approximately 40 pips.     Trading tips on Monday:   As seen on the 30M chart, the GBP/USD pair has ended its downward trend and started a new upward trend in the short-term perspective. We believe that the pound has not fallen enough to form a new strong uptrend, but the market may have a different opinion. There will be limited important statistics next week, so we recommend studying higher charts to understand the potential direction of the price. The key levels on the 5M chart are 1.2171-1.2179, 1.2245, 1.2307, 1.2386, 1.2445, 1.2507-1.2520, 1.2597-1.2616, 1.2659, 1.2697. When the price moves 20 pips in the right direction after opening a trade, a stop loss can be set at breakeven. On Monday, the UK has only scheduled the release of the Services PMI, which may provoke a reaction. In the US, there will also be business activity indices in the service sector, including the ISM index, which is considered important.   1) The strength of the signal depends on the time period during which the signal was formed (a rebound or a break). The shorter this period, the stronger the signal. 2) If two or more trades were opened at some level following false signals, i.e. those signals that did not lead the price to Take Profit level or the nearest target levels, then any consequent signals near this level should be ignored. 3) During the flat trend, any currency pair may form a lot of false signals or do not produce any signals at all. In any case, the flat trend is not the best condition for trading. 4) Trades are opened in the time period between the beginning of the European session and until the middle of the American one when all deals should be closed manually. 5) We can pay attention to the MACD signals in the 30M time frame only if there is good volatility and a definite trend confirmed by a trend line or a trend channel. 6) If two key levels are too close to each other (about 5-15 pips), then this is a support or resistance area.   How to read charts: Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them. Red lines are channels or trend lines that display the current trend and show which direction is better to trade. MACD indicator (14,22,3) is a histogram and a signal line showing when it is better to enter the market when they cross.   This indicator is better to be used in combination with trend channels or trend lines. Important speeches and reports that are always reflected in the economic calendars can greatly influence the movement of a currency pair. Therefore, during such events, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement. Beginners should remember that every trade cannot be profitable. The development of a reliable strategy and money management are the key to success in trading over a long period of time.  

USD/JPY: On Monday, the USD/JPY pair tested the resistance level at 140.35 but was pushed down from it, though not by much. This morning, the price is trying to rise, but the signal line of the Marlin oscillator is decreasing, which could eventually lead the price back to 138.57.     If the dollar manages to find the strength to rise, after surpassing 140.35, the next target will be 142.28, the nearest line of the global price channel. On the four-hour chart, we can see that the target level of 140.35 was reinforced by the MACD line, which resulted in a local price reversal from it.     If the dollar manages to find the strength to rise, after surpassing 140.35, the next target will be 142.28, the nearest line of the global price channel. On the four-hour chart, we can see that the target level of 140.35 was reinforced by the MACD line, which resulted in a local price reversal from it.  

What events may affect market sentiment on June 7? Analysis of fundamental data for beginners. On Wednesday, there will be very few macroeconomic reports. We can mention the US balance of trade report, but I can't even remember the last time this report provoked any market reaction. Therefore, we should probably expect the market to go into a "half-holiday" state again today. Volatility could range from 50 to 70 pips for both instruments, which makes it challenging to trade.   But there's nothing we can do if there are no news and reports, the market has no reason to be active. Analysis of fundamental events: Among the fundamental events, the only notable one is the speech by European Central Bank Vice President Luis de Guindos. As we approach the June ECB meeting, his comments may help traders understand the central bank's plans for this month. However, traders are already aware of these things.   The probability of a new quarter point rate hike is 100%, and there are simply no other options. Therefore, even if de Guindos hints at further tightening, it will not support the euro or create pressure on it. It would be different if de Guindos outlines the future prospects for the ECB rate, as there has been recent information suggesting that the June hike may be the last in the tightening cycle. But for now, it's only rumors.     General conclusions: On Wednesday, there will be hardly any significant events, so we expect low volatility and weak intraday movements. Theoretically, de Guindos' speech could turn out to be interesting, but in reality, we have witnessed a large number of speeches by ECB committee members in the last two weeks. It is unlikely that de Guindos will reveal anything fundamentally new today.     Basic trading rules: 1) The strength of the signal depends on the time period during which the signal was formed (a rebound or a break). The shorter this period, the stronger the signal. 2) If two or more trades were opened at some level following false signals, i.e. those signals that did not lead the price to Take Profit level or the nearest target levels, then any consequent signals near this level should be ignored. 3) During the flat trend, any currency pair may form a lot of false signals or do not produce any signals at all. In any case, the flat trend is not the best condition for trading. 4) Trades are opened in the time period between the beginning of the European session and until the middle of the American one when all deals should be closed manually. 5) We can pay attention to the MACD signals in the 30M time frame only if there is good volatility and a definite trend confirmed by a trend line or a trend channel. 6) If two key levels are too close to each other (about 5-15 pips), then this is a support or resistance area.   How to read charts: Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them. Red lines are channels or trend lines that display the current trend and show which direction is better to trade. MACD indicator (14,22,3) is a histogram and a signal line showing when it is better to enter the market when they cross. This indicator is better to be used in combination with trend channels or trend lines. Important speeches and reports that are always reflected in the economic calendars can greatly influence the movement of a currency pair.   Therefore, during such events, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement. Beginners should remember that every trade cannot be profitable. The development of a reliable strategy and money management are the key to success in trading over a long period of time.    

The XAU/USD chart shows a bearish momentum within a descending channel, indicating a predominant downward trend.       here is potential for a bearish reaction at the first resistance level of 1966.26, leading to a price reversal towards the first support level at 1933.95. Additional support is observed at 1914.16, offering significant buying opportunities. The resistance levels at 1966.26 and 1980.08 present obstacles for upward movement. Monitoring these levels can provide valuable insights for trading opportunities in the XAU/USD market.  

June 29 macroeconomic calendar Today, the US will see the release of its weekly jobless claims data. Figures are projected to grow. Continuing claims are forecast to rise to 1,765,000 from 1,759,000 while initial ones are likely to rise to 265,000 versus 264,000. Trading plan for EUR/USD on June 29 The pair may trade horizontally for a while or bounce due to a sharp price change the day before. Should quotes stay firm below 1.0900, we would see a fall in value. Trading plan for GBP/USD on June 29 Due to a sharp price change in the market, an oversold signal could be generated, which would mean that the pair could come to a standstill or bounce. However, should speculators not respond to technical signals, the price would fall to 1.2550.             What's on chart The candlestick chart shows graphical white and black rectangles with upward and downward lines. While conducting a detailed analysis of each individual candlestick, it is possible to notice its features intrinsic to a particular time frame: the opening price, the closing price, and the highest and lowest price. Horizontal levels are price levels, in relation to which a stop or reversal of the price may occur. They are called support and resistance levels. Circles and rectangles are highlighted examples where the price reversed in the course of its history. This color highlighting indicates horizontal lines which can exert pressure on prices in the future. Upward/downward arrows signal a possible future price direction.  

The market hardly reacts to final data on PMIs as they mostly coincide with preliminary estimates. Any significant trading movements usually occur during the release of the preliminary estimates. By the time the final data is published, the market has already taken these indicators into account. Furthermore, the preliminary estimates are released simultaneously for all indexes, while the final data is released at different times.   For example, today, only the manufacturing PMIs are slated for release, which have the lowest value among all business activity indexes. In other words, even if today's data differs from the preliminary estimates, which is possible, the market response will be relatively moderate, and so we shouldn't expect any significant movements. The preliminary estimate of the UK manufacturing PMI already revealed a decline from 47.1 points to 46.2 points.   The US PMI also fell from 48.4 points to 46.3 points. Therefore, the preliminary estimate already indicated a noticeable decline in the state of the industry. The GBP/USD pair has slowed down its downward cycle around the 1.2600 level, where a reversal occurred amid the weakening of the dollar positions.       As a result, the price returned above the 1.2700 level. On the four-hour chart, the RSI indicated the possibility of a price reversal when reaching oversold territory. On the same time frame, the Alligator's MAs reversed, indicating a slowdown in the downward cycle. Outlook In order to raise the volume of long positions, the quote needs to stay above the 1.2750 level. In this case, there may be a subsequent stage of recovery in the value of the British pound relative to the recent corrective move.   As for a subsequent downward move, falling below the 1.0650 level could easily reignite short positions. This will result in updating the local low of the corrective cycle. The complex indicator analysis unveiled that in the short-term period, technical indicators are pointing to a bearish bias from the 1.2700 level. In the intraday period, there is a primary signal of the end of the corrective phase. In the mid-term, the indicators are pointing to an uptrend.  

Gold pares losses after a rough couple of months Gold has struggled in recent weeks against the backdrop of persistent stubborn inflation, resilient economic data, and, as a result, higher interest rate expectations. We’re seeing it bounce back a little over the last couple of sessions after briefly dipping below $1,900 but the trend is still very much against it. That said, we may be seeing some weakening of momentum around $1,900 which could hint at a corrective move, although a loss of momentum in itself doesn’t mean the price will suddenly reverse. A significant break below $1,900 could see it plunge again, and on improving momentum, but after falling almost 9% since early May, a correction could make sense.

Medium-term downtrend phase of AUD/USD has reached an oversold condition with downside momentum easing. Key short-term support to watch will be at 0.6385. Intermediate resistance at 0.6490. The price actions of AUD/USD have been oscillating in a medium-term downtrend phase in place since the 17 July 2023 high which has been reinforced by the bearish breakdown of its former medium-term ascending trendline support from 13 October 2022 low on 9 August 2023. So far, the AUD/USD has plummeted by -530 pips from its 17 July 2023 high to its 17 August 2023 low of 0.6365, and the recent four weeks of decline have led to an oversold condition in terms of price actions     Fig 1:  AUD/USD medium-term trend as of 28 Aug 2023 (Source: TradingView, click to enlarge chart) The daily RSI oscillator of the AUD/USD, a gauge that measures momentum, oversold, and overbought conditions on price actions reached an oversold condition recently on 17 August 2023 and shaped a bullish divergence condition (a higher low) thereafter on last Friday, 25 August. These observations suggest that the downside momentum of the ongoing medium-term downtrend of AUD/USD may have eased which supports a potential imminent minor countertrend/consolidation phase. These positive elements have also occurred at a key support of 0.6385 that coincided with the 10 November 2022 low and the 76.4% Fibonacci retracement of the prior medium-term up move from 13 October 2022 low to 2 February 2023 high.     Fig 2:  AUD/USD minor short-term trend as of 28 Aug 2023 (Source: TradingView, click to enlarge chart) Since its 17 August 2023 low, the price actions of AUD/USD have started to evolve into a minor range configuration with its key short-term pivotal support at 0.6385 and respective minor range resistance at 0.6490 (also the 20-day moving average). A clearance above 0.6490 sees the next resistances coming in at 0.6510 and 0.6600 (5 August/10 August 2023 minor swing highs areas, pull-back resistance of the former medium-term ascending trendline support from 13 October 2022 low & the 50-day moving average). However, failure to hold the 0.6385 key short-term support invalidates the minor countertrend rebound scenario for a continuation of the impulsive down move sequence of the medium-term downtrend phase towards the next supports at 0.6310 and 0.6270 in the first step.

Details of the Economic Calendar on September 26 European Central Bank Chief Economist Philip Lane announced a shift in monetary policy towards a more accommodative stance but also presented forecasts indicating the possibility of the first interest rate cut as early as the second quarter of next year. Furthermore, the refinancing rate could be reduced by 150 basis points over the next two years. Based on this information, the euro accelerated its decline, and as a result, the British pound also shifted towards active weakening.   Analysis of Trading Charts from September 26 The EUR/USD currency pair concluded its pullback with a new surge in the volume of short positions. As a result, the local low of the downward cycle was updated, and the technical signal of oversold euro remains in the market. On the other hand, the GBP/USD pair, during its inertial movement, does not respond to technical signals of oversold conditions. As a result, the exchange rate fell below the level of 1.2150, indicating significant speculative interest in short positions. Economic Calendar for September 27 Today, the publication of data on durable goods orders in the United States is expected, with expectations of a decrease of 1.4% in the volume of these orders. This should be considered in light of the previous month when they fell by 5.2%. Thus, this will be the second consecutive month of declining orders for durable goods. Durable goods orders reflect the state of consumer activity, which is a driver of economic growth. If the data confirms a decline in orders, this could put pressure on the dollar in the market.     EUR/USD Trading Plan for September 27 Based on the oversold signal for the euro exchange rate, it can be assumed that the support level at 1.0500 may play as support. In this case, there is a scenario of slowing down the current downward cycle within this level, which could lead to an increase in the volume of long-term positions, potentially resulting in a partial recovery of the euro exchange rate. However, if speculators ignore the technical oversold signal and the exchange rate remains below the level of 1.0500 during the day, this could support the momentum in the euro market for some time.   GBP/USD Trading Plan for September 27 If the inertial movement continues in the market, and traders continue to ignore the technical oversold signal for the British pound, further depreciation of the exchange rate towards the psychological level of 1.1950/1.2050 is possible. What's on the charts The candlestick chart type is white and black graphic rectangles with lines above and below. With a detailed analysis of each individual candle, you can see its characteristics relative to a particular time frame: opening price, closing price, intraday high and low. Horizontal levels are price coordinates, relative to which a price may stop or reverse its trajectory. In the market, these levels are called support and resistance. Circles and rectangles are highlighted examples where the price reversed in history. This color highlighting indicates horizontal lines that may put pressure on the asset's price in the future. The up/down arrows are landmarks of the possible price direction in the future.    

The bearish trend, a significant aspect of Forex trading, plays a crucial role in shaping investment decisions. This article aims to elucidate the characteristics of the bear market and its implications for traders. Understanding the Downtrend As discussed in our previous articles, a trend represents the direction in which the price of a currency pair is moving. A fundamental trading principle is to align investments with the trend rather than against it. Therefore, comprehending the downtrend is essential. The identification of a downtrend can be facilitated by analyzing charts that reflect past price values. Analyzing the Downtrend In the chart, the descending peaks and troughs, marked in red, signify a downtrend. Connecting the peaks forms a clear trend line. The strength of the trend is proportional to the distance between the peaks, with a larger gap indicating a more robust trend. While charts may not always vividly display trend lines, recognizing a general downward price trend can serve as a signal to temporarily exit the market. Bear Market Dynamics A bear market, synonymous with a downtrend, occurs when prices consistently decline. In the long term, it signifies a bearish market. Adhering to the popular adage "the trend is your friend," in such scenarios, traders usually contemplate selling. Bear markets often exhibit greater volatility compared to bullish trends, attributed to the accompanying unease amid declining prices. Support and Resistance Lines Support and resistance lines denote potential reversal points in the price movement of a currency pair. In a downtrend, support comprises the successive troughs, each lower than the previous one. These levels represent the depths of prior downward movements, acting as points where the price resisted further decline. Conversely, resistance surfaces when there is a visible level at which the price resisted further upward movement. Referring to the "change of poles" principle, if a resistance level is breached, it transforms into a support level. This pivotal moment often prompts seasoned traders to enter the market. Understanding the dynamics of a bear market is crucial for Forex traders. By recognizing the signs of a downtrend, interpreting charts, and comprehending the roles of support and resistance lines, traders can navigate the complexities of bearish markets more adeptly.