Forex Market Analysis Report - 4 February 2008
Today was a slow day. Mondays are usually slow maybe because most of the big traders do not open/close their positions on Monday. The banks’ traders need one day to analyze the market and decide about the next positions because they are swing traders and one day doesn’t make a big difference for them.
On the other hand, the market, economy and business is slow in general because of the all of the bad news that can be heard everywhere about the USA and USD recession. After the real Estate recession in USA and then UK, now the world is waiting for the credit card recession in USA. Waiting means indecision and inaction in different markets and specially forex market.
But as I have always emphasized, this inaction and indecision will be followed by a big move and wave in the market that can make a lot of money for the good traders. You have to be ready for this big move. I don’t mean that you should take your position now. I mean you should analyze the market and have the supports, resistances and … plotted on your charts and then take the proper action after a true breakout.
Fundamentals: Tomorrow at 10:00 AM - ISM Services
I don’t expect to see big changes on the charts since last night report. Lets check the currency pairs and see what they have done so far.
1. Euro against US Dollar (EUR-USD)
12:02am GMT
Please have the last night report open and take a look at it when you need to compare tonight charts with the last night charts.
The today candlestick on the daily chart shows some Bullish activities and it couldn’t go down and break the close price of the last Friday candlestick. So it is not the time to go short yet.
The 4hrs shows that the Bollinger middle band has been retested as a resistance today but could not be broken. I am sure we will have a triangle in the one hour chart that shows us the direction.
The one hour shows that the market has been really slow today. We have to wait for the triangle to be broken out to take the proper position.
2. US Dollar against Swiss Franc (USD-CHF)
12:14am GMT
Today’s candlestick is formed as a Doji which means Bulls and Bears have the same power and none of the has been stronger.
The 4hrs shows that the resistance has been retested unsuccessfully. This resistance is in fact the 161.80% Fibonacci level related to one of the small trends between 4 Jan 12:00 and 8 Jan 0:00.
The one hour shows a pattern which looks like a triple top or a deformed head and shoulders. However the neckline can be distinguished and if it breaks down the neckline, the price will go lower. And you know what to do then.
3. British Pound against US Dollar (GBP-USD)
2:58am GMT
As I told you last night, GBP-USD was showing some buy signals but we had to wait for more confirmation. The confirmation for me was breaking up the 1.9667 line which happened. So the price went up and the today’s candlestick in the daily chart is formed as a Bullish candlestick right on the broken resistance.
The 4hrs shows that the price went up during the day but now it is stopped by the 161.80% level. Before it, when it was going up, it was stopped by the 100% level. Look at the Fibonacci levels I have plotted on the below chart.
You can see the descending triangle formed almost under the 161.80% level. So the next position will be dependent on the triangle breakout. If it broke up, you should go long and visa versa.
4. US Dollar against Japanese Yen (USD-JPY)
2:56am GMT
Not any big changes on the daily chart. It is still inside the symmetrical triangle and it is trying to break it up. All the last up and down are happened around the 161.80% level and it is not clear yet if it is broken up or down.
The 4hrs shows that retesting the triangle resistance has been unsuccessful so far and the price is going down to retest the 161.80% level.
The one hour shows a head and shoulders inside a descending wedge. Before the wedge we have an uptrend and descending wedge after an uptrend is a continuation signal. The 38.20% has been broken up and down several times. I expect the wedge to be broken up but we have to wait and see. So go long if it broke up and visa versa.
5. British Pound against Japanese Yen (GBP-JPY)
3:27am GMT
Today’s candlestick formed under the Bollinger middle band. It means Bulls have problems in taking the price up.
Look at the flag (pennant) in the 4hrs chart. It is formed after an uptrend. So we should expect it to go up but we have to wait and see.
The same flag in the one hour chart. So here we have to wait for the flag to be broken. Then we can take the proper position.
6. Euro against Japanese Yen (EUR-JPY)
3:36am GMT
The daily looks so similar to the GBP-JPY. The price is stopped by the 50% level as a resistance.
The 4hrs has not broken out of the triangle yet.
The one hour shows that the price is trying so hard to break up the triangle. If you don’t have any position, you have to wait for the triangle to be broken out and then take the proper position.
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