trend continuation

EUR/USD On Tuesday, the euro went through a correction, defined by the convergence with the Marlin oscillator. The price once again tested the target level of 1.0738 and the embedded line of the descending channel. The signal line of the oscillator has entered its own descending channel.     According to the main scenario, the price can now consolidate below the support level of 1.0692 and continue moving towards 1.0620, which is the lower embedded line of the price channel. The alternative scenario is simple - after settling above 1.0738, a test of the target resistance at 1.0804 is possible. This would extend the correction.     On the four-hour chart, the price has returned below the MACD indicator line after a false breakout above it. The Marlin oscillator has moved into the negative territory after briefly staying in the positive area. The trend is bearish.  

UK Mortgage Approvals (Apr) – 31/05 We've started to see a modest improvement in mortgage approvals since the start of the year, after they hit a low of 39.6k back in January, as the sharp rise in interest rates at the end of last year weighed on demand for property as well as house prices.   As energy prices have come down, along with lower rates, demand for mortgages has started to pick up again with March approvals rising to 52k, while net consumer credit has also started to improve after similar weakness at the end of last year.   With inflationary pressures starting to subside we could see this trend continue in the coming months, as long as energy prices remain at their current levels, and the Bank of England starts to signal it is close to being done on raising rates.     Manufacturing PMIs (May) – 01/06 Last week saw the latest flash PMIs show that manufacturing activity in France and Germany remained weak, while in Germany activity deteriorated further to its lowest levels since June 2020, when economies were still reeling from the effects of pandemic lockdowns.   We also found out that the German economy was in recession after Q1 GDP was revised lower to -0.3%. The UK and US on the other hand were able to see a modest pickup in economic activity. It is clear that manufacturing globally is in a difficult place, we're also seeing it in China, as well as copper and iron ore prices, which suggests that global demand is weakening sharply.   Italy and Spain economic activity is also expected to see further weakness in manufacturing when their latest PMIs are released later this week.

The EUR/USD pair has retraced 50% of the last wave down and hit the level of 1.0930. The next target for bulls is 61% Fibonacci retracement level located at 1.0949. The intraday technical support is located at 1.0865 and 1.0893.   The bulls are clearly in control of the market and there is no indication of a up trend termination or reversal, despite the fact that the corrective cycle was quite deep and solid. When the up trend is resumed, the next target for bulls is seen at the level of 1.1054 - 1.1097, which creates a supply zone for bears. Larger time frame trend remains up.    

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.

Understanding the terms like "uptrend," "bull market," and their significance is paramount for seasoned traders, but they might pose challenges for newcomers in the stock market. This article delves into the meanings and importance of these concepts when making investment decisions. Unveiling the Concept of Uptrend As discussed in our previous articles, a trend signifies the direction in which the price of a specific currency pair is moving. The ability to determine a trend is crucial in Forex trading. Adhering to the widely accepted principle, "the trend is your friend," aligning investments with the trend rather than against it is fundamental. Today, we'll focus on the rising trend. Bull Market – Definition and Characteristics: First and foremost, let's clarify that terms like "bull market," "uptrend," "rising trend," or "uptrend" all refer to the same market situation. If an upward trend persists over an extended period, it's referred to as a bull market. The graphical representation of an uptrend looks like this: Clearly, in an uptrend, each successive trough is higher than the previous one, along with each successive peak. This indicates that the price is consistently rising. It's crucial to remember that occasional price drops, known as corrections, may occur, but the overall upward trend is maintained. Following the basic trading principle for long-term investing, always act in line with the trend; during an uptrend, transactions should predominantly be buying. However, when the last trough is breached or no new peak is evident, it could signal the end of the uptrend. In such situations, refraining from investments and waiting for a clearer direction is advisable. Support and Resistance Lines: While discussing the uptrend, it's essential to mention support and resistance lines, critical moments in the cycle that can indicate significant changes in the trend. The resistance line marks the point where supply is stronger than demand, signifying the beginning of a price decline. Typically, the resistance line is determined by the previous peak (based on historical data). Overcoming levels of successive resistance peaks is necessary to sustain an uptrend. Conversely, if breaking the resistance line occurs after bouncing off the support line, a change in the current trend can be anticipated. The support line is the level where demand outweighs the force of supply. This halts the price decline, resulting in a resurgence of values. Usually, the depth of the previous price drop defines the support line. In summary, understanding uptrends, such as bull markets, involves recognizing the graphical representations, following the basic trading principle, and considering critical moments like support and resistance lines. This knowledge equips traders to navigate the complexities of rising markets more adeptly.