Ahead of the German ZEW data this morning, markets are positioning for a move in the euro dollar, with the euro now heavily oversold and the US dollar equally over bought in the faster timeframes. Using the currency strength indicator in multiple timeframes provides a fast and visual picture of currency strength and weakness, with the euro (the gold line) now deeply oversold from the the 5 minute to the 30 minute timeframe, and preparing to reverse the longer term bearish sentiment ahead of the news. Apart from the ZEW, the only other ongoing euro news is of course Greece which continues to weigh on the single currency.
Finally remember that any market or currency can remain over extended for some time, and as always patience is the key coupled with the price action on the charts. The currency strength indicator is always the starting point to identify potential strength and weakness in an individual currency. Then it's time to consider...
As the markets get under way in London this morning, and with a relatively thin day for fundamental news, the US dollar is once again advancing on the fast time frame charts and providing some excellent intraday scalping opportunities across the currency majors. Both the British pound and the euro have been selling off sharply against the US dollar, with the currency strength indicator on the 15 minute timeframe showing the US dollar, the red line rising firmly and moving towards the overbought region, with the euro (orange) and the pound (yellow) both moving strongly lower along with the Swiss franc (green).
The chart alongside is of the GBP/USD in a slightly slower time frame (30m) and reflecting the current bearish sentiment at present for this pair, with the Trend Monitor at the bottom of the chart remaining firmly red, with the current volume rising, and confirming the current move lower. In addition, Cable is now breaking below the recent platform...
In this morning's forex trading session with Anna and David, one of the currency pairs they focused on was the EUR/AUD, which was the strongest performing currency pair in the currency matrix. The 60 minute currency strength indicator confirmed the longer term position, with the euro (the orange line) climbing strongly towards the overbought region on the indicator, with the Aussie dollar ( the blue line) moving firmly towards the oversold region in this timeframe. The 5 minute chart alongside reflects the trend, with the trend monitor maintaining the bullish picture, and only moving into a transitional color during the minor congestion periods. The trend monitor sister indicator, the trend dots completes the picture and highlighting these congestion phases in advance.
Volumes throughout the move were in agreement and confirming the bullish sentiment for the pair with the accumulation and distribution indicator on NinjaTrader, highlighting the keys areas of support and resistance. The support platform at 1.4252 held firm during the...
Question
Hi Anna, Firstly, I just wanted to say I've just finished "Forex For Beginners" and I thoroughly enjoyed the book; found if extremely helpful and useful. Opened my first forex account on Friday of last week. Made some mistakes at first, lacked the discipline to follow my strategy, I think I was a tad over keen to trade at first. I've just purchased "A Complete Guide to VPA" so I'll start on that tonight. I have a quick question though if you wouldn't mind answering. In Forex for Beginners, you use the Currency Strength Indicator to look for potential indicators of an upcoming reversal. And then from this you use the currency matrix and analysis to confirm the reversal. I was just wondering, if you could use the same strategy to indicate a continuing trend? If this is explained in the book I've just purchased I apologise, I just thought I'd ask.
For example, if both the Aus and Usd are...
