EUR/USD Market Update

After some wild days for the EUR/USD currency pair let's take an updated look into this market. As usual, we going trough our top down analysis process to better understand the market structure and to form some possible conclusions as well as potential scenarios.

Starting off with the macro perspective, we can cleary observe an imbalanced market that one time framing lower since several months. This month the market opened inside of a balance area that occured back in 2003. We'll see how the market will behave at the bracket high/low. Let's keep an eye on that levels.

Also with the weekly chart, we can see a very selling imbalanced market. The previous week ended the one time framing lower condition in some degree but bear in mind that the previous week actually closed below the week's high and formed a potential resistance area. The likelihood of testing the low again should be high.

Moving forward to the daily bars chart strengthens our short conclusions as we can cleary see a balanced market condition here. There is lot of air to the downside but the market have to break a stubborn support level inside of this balance area that holds since several days like in today's market as well.

The 240 minutes chart pointing out today's support at the previous balance area high to the tick:

Last but not least is to take a look into the US Dollar Index. Here we can see a balanced behavior in the daily perspective with a potential test of the bracket high conclusion.

If the market could break this mentioned support level inside of the daily balance area we should see some lower movements to the bracket low. As we know the currency market is sometimes a uncertain area with wild swings, so look out and calculate as well as manage your risk with the highest attention.

Next time we will take a look with TWAPs on this market again.

Anyway, stay happy!

All information is for educational use only and is not investment advice. There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.

EUR/CHF Euro Swiss Franc Technical Market Analysis

Because of the heavy move in EUR/CHF we should consider a technical look into this market, out of curiosity and diversity. As it was a substantial knee-jerk move we will start out with the macro Yearly bars chart. With looking at this macro chart, we can see that the market actually one time framing lower since 2008. 2009 was a calm inside year followed by the 2010 drop and the buying tail year 2011. After three years of "balance" and inside bars the market continues its one time framing lower behavior with a smashing Thursday (15th January 2015) and a new low below 1.0000.

The monthly bars chart presents the same knocked down picture and we can see the potential break of one support level.

The weekly bars chart established a potential support level:

Looking at the daily perspective, we can observe some more interesting things. We can identify a balance area and with the installed Fibanocci tool we can observe a potential area which could be rejected. Possible is a move back to the bracket low as well as a move towards to the 61.8% level.

With the same timeframe but installed EMAs, we can see the market opened above 5EMA and tested 10EMA with resistance:

To see some more details we can zoom in with a 240 minute chart. With this timeframe we can see a possible break above our balance area. This could lead us to the next marked resistance level:

All information is for educational use only and is not investment advice. There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.

EUR/USD (6E) TWAP Market Update

All information is for educational use only and is not investment advice. There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.

Here is a quick top down TWAP perspective on the currency pair EUR vs USD. Firstly let's take a look into our Trading Glossary about TWAP:

Twap is an abbreviation for the Time Weighted Average Price. This is just like VWAP only it is weighted upon time. This is also an order type that many institutional investors utilize to work in and out of significant positions. It behaves like an Iceberg order by only showing a certain amount of orders to be executed but continues to refresh the orders throughout the session until the position is complete.

With this informaiton in our mind let's going through the monthly, weekly and intra-day TWAPs. Make sure to have time based charts as this is a Time based tool. However, this is our logical preference but you can playing around with whatever other chart formats as well. The Forex market is a 24 hours market, so there is no point in using a 'London Session', 'U.S. Session' or name them all. With that said, all charts here are ETH/Globex based and representing the march futures contract (6E). Like always it is your free choice in which way you will use this tool.

As usual, we beginning with the monthly TWAP. Looking at this installed tool, we can see a cleary selling imbalance with the developing value slope to the downward. The market opened below the previous month's value close area and since that point it rejects the developing value low. In summary a very bearish rated view here.

Moving forward to the weekly TWAP, we can observe an open below the previous week's value close area with a developing value slope to the upward. Additionally the market is trading in a balanced behavior, so a break above should lead us to the previous week's VAL close level but we should be very careful to take any long trades with the bearish HTF macro perspective, especially with the strong US Dollar index. Anyway, everything can happen and we should have an open mind for potential changes in the market context.

Now looking at the intra-day VWAP, we can see an open below Friday's value close area and a developing value slope to the upward. Currently we got back into the previous value area and trading above the developing value. Test of the previous TWAP close level as well as a rotational move back to the developing value low are possible scenarios. We'll see what will happen here.

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Stay happy!

EUR/USD Market Update

All information is for educational use only and is not investment advice. There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.

Here is a quick market update for EUR/USD. As always, we will looking for the path of least resistance with our top down analysis process. It is the most significant part in our daily trading to read and understand the market story with various tools on several timeframes. With that said, let's start out with the monthly bars chart.

With looking on the monthly chart, we can still see the major one time framing lower market that occurs since eight months. Also the previous month's low got taken out immediately to moving lower and lower. Currently the market testing a potential support area. The market participants awaiting Thursday's ECB decision about the QE program, so it will be very interesting to observe the market behavior here.

Moving forward to the weekly chart, we can see the market rejected several times the balance area low to finally continue its one time framing lower behavior here as well. Currently we have a rotational inside week as the market did not took out the previous week's high or low. We can also identify that the previous week closed above the marked support level.

As we are analyze the weekly bars chart we should also consider a look on the weekly TWAP. The market opened below the previous weeky value close area. The developing value slope is somewhat flat and we can cleary see the rotational behavior. However, we are trading below the weekly developing value and there is enough room to the downside.

With looking at the daily bars chart, we can observe a one time framing lower behavior and two inside days. As mentioned before the market participants awaiting Thursday's decision, so we should expect one more rotational inside day before the market get really wild.

If you wish to learn more about our Trade Methodology please visit our website. You can also use our free Trading Glossary if you do not understand some terms that we use in our posts.

Be careful and stay open minded as well as happy!

USD vs CNH Technical Analysis

All information is for educational use only and is not investment advice. There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.

Here's a quick technical perspective what we are seeing with the USD/CNH currently. As usual, we will walk through our top down process looking for the path of least resistance and market context.

To start out, let's take a look at where we are from a pure Monthly bars and Weekly bars perspective to view the macro context. We can see that the market formed a balance area in the previous months. Actually the market broke out to the upside and trading above that balance area now. With the installed Fibonacci levels we can see that the market found support at the 50% and the 61.8% level to form the bracket area. Currently the market testing a potential resistance area but could heading toward to the next marked area in the new year.

With looking at weekly bars chart, we can identify a one time framing higher market that occurs since several weeks. Also the previous week's high got taken out from the current one. However, we can observe a rejection area with the previous bracket low that holds since two weeks.

With installed EMAs on this weekly timeframe we can see that a bullish short-term trend is intact currently.

Moving forward to the daily perspective we can identify some brackets and gaps. With yesterday's close and today's open the market actually broke this current balance area. As we know gaps are potential areas that could be revisit. The market opened and moved lower to revisit and fill that open gap. There is also one more potential gap lower to target. With today's close within the bracket a test of the balance area low is somewhat probable.

It looks like the stream of buying died up here and some guys took profit today. This could lead to more short selling to revisit the next gap. With a close below 6.2135 the likelihood to explore lower prices would be higher. Anyway, everything can happen. Let's stay focused and react to market generated informations.

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