Technical & Fundamental Analysis on one of the Most traded pairs

[Avinash]

I would like to use this thread for Newbies, Intermediate traders and Expert Traders all around the world for all to benefit and get the feel of the market. Before I publish any kind of Technical Data or any kind of analysis on this thread I would like to introduce myself to you all.

Here you go- My name is Avinash Bhojwani, I am from India but I have been staying in Dubai throughout my life. My email in case you require is- avi.pb87@gmail.com. I have been working with one of the top brokers for long (approx. over 5 years) and have been analysing, training and advising clients/traders into the market as I love to do as a passion. I always feel enlightened if traders have the knowledge and experience whenever entering the market with a trade plan and proper risk management system apart from performing their own analysis. With that knowledge it will always help them to know what is happening in the market around them. You all especially know that even though over 70% of the traders don't have a good amount of information about the market while trading and eventually end up in losing big amounts. I have spent literally thousands of hours looking at charts trying to understand how different currencies move with technical analysis, in reaction to news results and sentiments of investors how everyone reacts to news.

I appreciate for all your feedback and questions in replying me. This new thread would be open to all traders to discuss and we all can share valuable information and analysis helpful to all the traders.

 

[Avinash]

The Euro has been creating lower lows and continuing a downtrend in a channel, the intra day resistance for EURUSD is 1.3333 which is today's high and a psychological resistance. The trend is supported by a channel so the lower channel remains the support and any further price action crossing the channel trend can further fall below to the next support levels at 1.3210

 

[Avinash]

As you can see, from the hourly chart of XAU/USD (Gold). Gold has been within the range between 1700$ and 1725$ an ounce against the dollar and has been consolidating making lower highs and higher lows as the gaps starts decreasing and forming a triangle. A trend breakout towards the upper level and lower level can be expected as the gaps formed is lower and lower. Next Resistance and support level remains at 1736$ & 1702$ an ounce respectively.

 

[Avinash]

Above shown is Aussie against the dollar in an hourly chart. AUDUSD has been in an uptrend and strengthened against the dollar. There are are many reasons for Aussie to be stronger than the dollar such as higher commodity prices which are related with the rise in Aussie as being as one of the exporters of the commodities it produces, banks using a chunk of funds for carry trade- a trade in which low cost fund is deployed in assets with higher yields and weakening of dollar has been some of the important causes affecting a rise in prices against the dollar.

Technical Analysis on AUDUSD on 1 hourly chart attached is as follows: Lower Purple trend line where you connect the higher lows becomes the support for uptrend and Higher purple line where you connect the lower highs becomes the resistance as both the purple lines meet to form a triangle which had been broken giving confirmation that market falls further. The red parallel line shows a downtrend until any line is broken for confirmation. Currently support for AUDUSD remains at 1.0700 breaking the red line. When entering a trade make sure a new hourly candle is below the support line as a confirmation for selling to lower levels

 

[Avinash]

We had a confirmation for the downtrend both in technicals and fundamentals. Technical view:- Before on AUDUSD the downtrend had been supported by the red trend support lines and as expected if the support line is broken we can expect a further decline in AUDUSD at least somewhere above 1.06 levels.

Fundamental view:- AUDUSD fell to a low 1.0602 as 1.06 acting as a support level on risk aversion as equities extend indicating China's growth concern. The Aussie had been pressured as the Reserve Bank of Australia kept the interest rates unchanged moreover kept the rate open for rate cuts in the future. If the RBA decides to cut the interest rates then they would be ignoring the growth aspects and would be looking forward to counter inflation.

Attached is the chart is an hourly chart of AUDUSD after breaking the support level and falling to just above 1.06 levels due to the technical interpretation supported by fundamental outlook.

 

[Avinash]

Attached is the AUDUSD 1 hour chart which continued to fall breaking the support level. From the chart, you can see that the Triangle (indicated by purple lines connecting the lower highs and higher lows) approximately at 1.0750 on 2nd March was broken testing new levels supported by downtrend channel (indicated by the red support line) approximately at 1.0697 on 5th March was broken which created a new support downtrend channel (indicated by the gold line) approximately at 1.6 levels were broken as market fell to nearly a low of 1.0509.

AUDUSD sold off heavily from a 7 month high of 1.0855 to a 1 1/2 month low of 1.0500 which has been one of the high volatile pairs to trade as the Aussie has been affected by the US and Japan. The outlook still remains downwards until a resistance of 1.0650 is broken.

 

[Avinash]

Gold is one of the very attractive instruments to trade in the world wide market and in reality also to buy, own and invest for long term purposes. Gold as it is a precious metal makes it very valuable in the long run so every trader, investor and even banks buy for some or the other purpose. I believe they are lot of traders and investors who are looking to trade in metals such as Gold & Silver. XAUUSD (Gold) is one of the easiest pair to trade- To trade in Gold, you need to know the basic fundamentals, apply normal trend indicators or the indicators you think would work and more equity back up as Gold may be very profitable or very risky in short term but the right way to trade in Gold is to understand the long term trend and hold your positions. Even if the Gold is bringing some losses does not mean that you are unable to hold your positions, if you are right on the trend and you have taken a position just sit on the train until you reach your destination. With proper risk management and trading strategies it would be much futile to trade in Gold.

I would make you understand how easy it is to trade in Gold using very simple indication in the market so I have attached an hourly chart for XAUUSD (Gold) from 23rd February to 8th of March. On 23rd February I have inserted a purple trend lines moving downwards which is a downtrend channel, gold has been moving within the downtrend channel for 3 days until it was broken on 28th Febraury (indicated by red circle breakout) showing that the trend have changed to uptrend. When you monitor the charts well enough you can observe that the trend has been shifted to an uptrend channel indicated by red line between 27th February and 29th February. On 29th February the uptrend was heavily broken which is a simple technical indication falling from 1775 to 1688.

1775$-1688$= 87$, say 1 standard lot that is 100 ounces is traded will give a profit of 87$ x 100= 8700$ Profit. If 10 Standard lots that is 1000 ounces is traded= 87$ x 1000= 87000$ profit.

On 1st March, Gold tried to break 1725$ as a resistance level but was not able to break and created lower highs showing a downtrend channel which showed a breakout as a selling opportunity on 6th March. As per today, the short term trend was shifted from downtrend to uptrend channel between 6th March and 8th March continuing to go up. Carefully watching both the red lines can indicate you either breaking the uptrend resistance where market may go up further or breaking uptrend support where market may go down further.

Please let me know if you face any difficulty in understanding, it is very simple to understand and there is not much complexity involve in explaining. Please refer to the chart which will explain in a better way.

 

[Avinash]

Attached is the continuation of an hourly chart of XAU/USD (Gold) on 8th of March. As you can all see that Gold created an uptrend channel on 6th March which has been creating higher lows which created the uptrend support and higher highs which created the uptrend resistance (indicated by the red uptrend channel shown in the chart).

Yesterday we saw that Gold broke out from the uptrend channel for around 700-800 pips (7$-8$) where one could go for short term buy/long position whoever enjoys intra day trading or scalping (indicated by the red bubble shown in the chart). Another way to trade for scalpers and intra day traders is that you can wait for a bounce or when it rebounds within the trend channel just as it did on 8th of March and 9th of March for short term sell/short position (indicated by the white bubbles shown in the chart).

GOLD- Resistance and Support Levels
R1 / 1710.00 R2 / 1725.00 R3 / 1732.00
S1 / 1693.00 S2 / 1666.00 S3 / 1650.00

 

[Avinash]

Fundamental View: There was one of the most important fundamental data on Friday which was the release of Non Farm Payroll Data which had increased to 227,000 vs. forecast of 209,000. Non Farm Payroll indicates that the change in the number of people employed excluding the agriculture sector. Unemployment in the US has remained at 8.3% which had been same as expected which was announced along with the non farm Payroll data. The news was positive for the US and that is the reason you would see a drop in majority of the pairs.

Attached is an hourly chart for Gold as continuation of the previous chart.
Technical View on Gold: There are 2 trend lines shown in the chart, the downtrend channel (indicated by a green line acting as a support and resistance which have already explained in the previous sessions) and the uptrend channel (indicated by the yellow golden line). As you can see from the chart that Gold had created an uptrend since 6th of March and you can see that most of the time it is between the channel indicating the market going up smoothly within the channel. The White bubbles shown in the chart can help you in short term counter position bouncing from the trendline. The Red bubbles indicates the breakout from the trend. On Friday when the market had broken the trendline, Gold fell sharply from 1698 to 1676 due to channel breakout confirmation and a positive data from the US indicating to sell against the dollar. Both technical and fundamental view applied would give a profit of over 20$. Say 1 standard lot traded on Gold (XAUUSD) would give a profit of 20$ x 100 ounces= 2000$ within 30minutes. It is very important to realise the time value of money and riskiness/profitability of the trade however you could even go for short term trading for short term profits.

Purple and Red Lines indicate the resistance and support levels as follows:

R1 / 1716.00 R2 / 1725.00 R3 / 1732.00
S1 / 1701.50 S2 / 1694.00 S3 / 1688.00

 

[Avinash]

Attached is the hourly chart for the EURUSD recognizing the short term trends on an intra-day basis from 27th February to 12th of March.

Between 27th-29th February, you can see that the market has been in an uptrend bouncing within the trenline (indicated by the greenlines). On 29th February the Euro trend was broken as it broke the uptrend channel and EURUSD fell from 1.3420 to 1.3314.

Between 29th February-2nd March, EURUSD was moving in a downtrend channel (inidcated by the redlines). The Euro eventually broke the downtrend channel to create further lows to a low of 1.3185 which appeared on 2nd March. This level became a key level for the following day as a support level.

Between 6th March-12th March, Euro was moving in a downtrend channel (indicated by the yellow gold lines) from 6th of March. On 8th of March, you can see a big breakout appeared breaking the yellow lines from 1.3156 to 1.3290 which was also moving in an uptrend steeper channel between 7th March to 9th March. On 9th March, the uptrend channel had a major breakout breaking the green trend line from approx. 1.3234 to a low of 1.3083. Apparently Euro had to enter in the same downtrend channel line (indicated by the yellow lines).

Indications- Euro currently following on a downtrend channel line indicates the market is bearish at the moment. Trading can either take place bouncing from the lines to go for counter position or breaking the line for continuing either an uptrend or down trend. Red & Blue lines are The Moving Average of 2 different periods for intra day trends. If EURUSD is above both the lines this will indicate an uptrend (long/buying position) and if the EURUSD is below both the lines will indicate the downtrend (short/selling position)

EURUSD Resistance and Support Levels.
R1 / 1.3155 R2 / 1.3185 R3 / 1.3220
S1 / 1.3100 S2 / 1.3075 S3 / 1.3000

 

[Avinash]

As on 13th March, Gold made breakout from the downtrend channel (indicated by the Gold yellow lines) which was created between 9th to 13th March. Gold after breaking the downtrend channel support has created further lows which moved from 1682$ an ounce to a low 1634$.

1682$-1634$= 48$, if 1 standard lot was traded would give a profit of 48 x 100= 4800$ and 10 standard lots traded would give a profit of 48 x 1000= 48000$.

Currently Gold is moving within the red uptrend channel trying to break the upside resistance through the channel but still remains within the channel. It is very important to monitor the channel trends to rebound or breakout from the trendlines. If a trader wants to go for a higher profit opportunity, he can wait for a breakout and if it is a day trader or a scalper then bouncing from trendlines can create an opportunity for short term profits.

Gold resistance and support levels
R1 / 1650.00 R2 / 1663.00 R3 / 1672.00
S1 / 1639.00 S2 / 1634.00 S3 / 1625.00

 

[Avinash]

These days there has been too much speculation on Crude oil where a lot of mix fundamental data has made investors very confused whether to buy and keep Crude oil or sell Crude oil immediately. Apart from the daily fundamental data, Crude Oil can be analysed on the basis of simple trending indicators explaining the direction of the market.

Attached is a 4 hourly chart on Crude Oil.

Note: This applies only for medium to long term traders in Crude oil.

Technical view on Crude Oil: The movement between 1st March to 7th March from 109.00 to 104.50 created a downtrend channel which had been supported by both the support and resistance trendlines until Crude oil had a major breakout on 7th March. Once the trendline was broken on 7th March, Crude oil jumped from 106.00 to 108.00. Currently Crude oil is flowing in a downtrend which has been supported by the support and resistance trendlines waiting for it to break and create new lower lows or higher highs.

 

[Avinash]

Attached is the hourly chart for EURUSD. As you can see that the Euro have been in a downtrend since last week and had a breakout indicated by the Red Bubble. Currently Eur is still following a downtrend channel and waiting for a channel breakout.

Scenario 1: If EURUSD flows through the channel, trades can be done by taking short term positions for reversals from the trend resistance and support (indicated by white line and white bubble). Preferably short term trend for Euro is down as it is creating lower highs.

Scenario 2: If EURUSD flows through the channel and breaks the channel downwards, i.e the channel support is broken and one can open position for selling in the market as the direction for the Euro would be bearish/downwards falling further.

Scenario 3: If EURUSD flows through the channel and breaks the channel upwards, i.e. the channel resistance is broken and one can open position for buying in the market as the direction for the Euro would be bullish/upwards rallying further.

EURUSD resistance and support levels:

R1 / 1.3185 R2 / 1.3210 R3 / 1.3240
S1 / 1.3150 S2 / 1.3118 S3 / 1.3100

 

[Avinash]

On a time frame between 9th March and 21st March, Gold has been creating lower highs which shows a downtrend channel and stays below the Moving average of 100 and 200. Still Gold has been below the downtrend resistance level indicated by a red line like a triangle. Similarly on a short time frame between 14th March and 21st March, Gold has been moving in a consolidated range between 1635 to 1670 approximately finding a clear direction for breakout. As you can see in the chart between 14th March and 21st March, it is moving in a slight uptrend creating higher lows.


Gold resistance and support levels
R1 / 1660.00 R2 / 1670.00 R3 / 1682.00
S1 / 1641.00 S2 / 1634.00 S3 / 1625.00

 

[Avinash]

Attached is the GBPUSD daily chart which is trying to create a Head and Shoulder pattern. Currently the Sterling is forming the end of the Shoulder if it is able to bounce from the resistance level.

 

[Avinash]

Euro trend broken determining further price action with a support and resistance level. Buying from the support with a stop loss as the trend is confirmed.

 

[Avinash]

Attached is the daily chart of EURUSD. Note that this is very important for medium to long term traders as it is a longer frame chart. Above shows a clear flat head & shoulder pattern on EURUSD which acts as a strong resistance and support level rebounding from the resistance level 1 currently.

EURUSD resistance and support levels:

R1 / 1.3290 R2 / 1.3333 R3 / 1.3485
S1 / 1.3180 S2 / 1.3131 S3 / 1.3000

 

[Avinash]

Attached is the 4 Hour chart on EURUSD showing an uptrend channel from 12th of March to 28th March indicating various support and resistance levels. The EURUSD have been flowing in an uptrend channel bouncing from the trendlines.

EURUSD resistance and support levels:

R1 / 1.3385 R2 / 1.3485 R3 / 1.3565
S1 / 1.3290 S2 / 1.3180 S3 / 1.3131

 

[Avinash]

Attached is a 4 hourly chart for the GBPUSD. GBPUSD shows an uptrend channel in a 4hr chart creating higher lows but we can expect a breakout on either side.

Scenario 1: If it not able to break the trend line a counter position can be taken.

Scenario 2: If it is able to break the resistance of the uptrend channel then GBPUSD would indicate a further upside so it will trigger a buying opportunity.

Scenario 3: If it is able to break the support of the uptrend channel then GBPUSD would indicate a downside so it will trigger a selling opportunity.

 

[Avinash]

Attached is the 1 hour chart for EURUSD. In the chart approx at 1.3260 EURUSD has a strong support indicated by medium term trendline, short term downtrend channel and 200 Simple Moving Average.