FX Daily Signals, Analysis and News - 8 January 2008

Before reading tonight’s analysis, I recommend you to have the last night analysis open and have an eye on it because I have to refer to it a lot and you need to compare the tonight’s result with it.

Fundamentals:

10:00 AM - Pending Home Sales.

Tip of the day:

Keep your trading system simple.

There are a lot of trading systems. Some of them are really scientific and technical and easy to use but there are a lot of other systems that use a lot of indicators and complicated analysis, do nothing but making more confusion for you.

Generally the price movement is the best indicator and candlesticks are the only real time indicators that we have. All other indicators are delayed. So first try to learn the language of the candlesticks and technical analysis.

1. Euro against US Dollar (EUR-USD)

It seems the Saucer and Handle Pattern didn’t work. The rule says it should break up but it broke down. That’s why I do not trade based on these rules because these rules are created by the traders not the market. The market doesn’t care about what we say. It goes on its own way.

The 4hrs chart is in an almost symmetrical triangle now. All the signals like candlesticks, moving averages, Bollinger bands and … say that it will break down.

2. US Dollar against Swiss Franc (USD-CHF)

As I have already mentioned, USD-CHF and EUR-USD move against each other. USD-CHF moved up during the past day.

It confirmed that it will break up during the day. Hope you went long on time:

3. British Pound against US Dollar (GBP-USD)

It broke the 1.9750 support and went down but now it is back to test it as a resistance.

The 4hrs also says that it it is going down slightly.

4. US Dollar against Japanese Yen (USD-JPY)

It broke the descending wedge nicely and went up. It went down to test it as a support but didn’t even touch it. It should go up so.

5. British Pound against Japanese Yen (GBP-JPY)

The daily chart shows some reversal signals but the 4hrs chart still is in the wedge and have not broken it yet and didn’t show any strong tendency to break up during the past day.

6. Euro against Japanese Yen (EUR-JPY)

EUR-JPY has exactly the same situation as the GBP-JPY:

It is not recommended to take a long position by now. It is possible that it breaks the wedge up and goes up during the day. So if you like to trade EUR-JPY or GBP-JPY, you have to have an eye on them and go long if they broke the wedge.

7. Euro against British Pound (EUR-GBP)

The triangle is broken up. It went up then but now is testing the triangle upper side. It should go up after that.

The daily shows bearish signals but the market is still in an indecision situation. This is what that the last three candlesticks are telling up: a Doji, a spinning top, a hanging man:

8. US Dollar against Canadian Dollar (USD-CAD)

The 4hrs has a very clear pattern. No need to any explanations:

9. British Pound against Canadian Dollar (GBP-CAD)

10. Euro against Canadian Dollar (EUR-CAD)

11. Australian Dollar against US Dollar (AUS-USD)

Went up nicely as predicted yesterday.

12. New Zealand Dollar against US Dollar (NZD-USD)

13. British Pound against Swiss Franc (GBP-CHF)

14. Euro against Swiss Franc (EUR-CHF)

15. British Pound against Australian Dollar (GBP-AUS)

16. Euro against Australian Dollar (EUR-AUS)

17. British Pound against New Zealand Dollar (GBP-NZD)

18. Euro against New Zealand Dollar (EUR-NZD)

Further Reading:
Read and learn more about forex trading and technical analysis