here's the chart.

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Here's a chart it seems that the JPY has hit its resistence and is going to devalue a little until it continues its appreciation against the dollar.

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Hi I am a newbie in this FX world could you please explain what do yo mean by wait for price to test the trend line? and provide support if you could explain that in a bit mlore broef I am sure it will help many on this forum and many thanks for sharing your experince

Let's give it a shot... though if you're really struggling with it, try taking the power course by FXCM. That's how i learned about all this stuff.

So, you look at a chart where you can notice a definitive (or as clear as you can find) trend going up or down. It's preferable to find one over a longer period of time, so i recommend using daily or weekly charts.

One strategy if you want to draw a tunnel (which is useful cuz there are both support and resistance lines at the same slope, draw the first line, then draw a parallel line to enclose the chart. This is subjective, and more of an art then a science, so practice finding and drawing trend lines. The more you do, the better you get (thanks to Blaiser for that bit of wisdom).

In placing the lines, you want to connect two distinct points on the chart with one line, generally two lows or two highs. On my chart, I drew the support first, and connected two points that are marked with the light green. Then i copied and pasted the line and moved that second line to the top to form the resistance line (and attached it at the green point.

So you can see that the currency pair came close to or passed these lines several times for the next few years (marked in orange). At that point, you want to go long or short in the expectation that the trend will continue, and the currency pair will eventually go back towards the other line. That's what people mean when they say "wait for it to test the trend line." By getting in at the low or high point, you're positioned to make a ton of money should the trend lines hold and the price go back towards the other line.

However, always place a Stop Loss order on the outside of the trend line by a few dozen pips or so, just in case the trend line is broken. If you look at the purple circle, you can see that the price broke through the support, and hasn't returned. If you had placed the SL your losses wouldn't be that bad... but if you didn't... you're in for a world of pain.

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Ok check this bad boy out... buy long on the EURUSD! I got a few reasons: 1. No big upcoming new for the USD means that it's at the mercy of technicals, European news, etc. 2. Check out that trend. 3. THE MAC-D just crossed today.

Get in now! I mean really... throw away last week. This is the USD, and it's been losing for years now. Did anyone really think that was gonna change?

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Hi,
The power course is definetly a very good course. I recommend it to any new investors. I took it, a while back.

So I was looking at the AUDJPY chart and as you can notice that pair is definetly on an uptrend, mainly due to increasing carry trade activities. In the chart I drew the support and resistance lines, and I coupled that with 10, 20 and 50 day SMA. SMA tells us that the upward trend should be expected to continue on its range trade, however the pair is reaching a resistance line at 103.88, and if the pair manages to break then it should reach the 107 resistance.

Why would you go long here? It seems that having tested the trend line, this pair should go south... and if you look at the upcoming news, should the FOMC (as predicted) not do anything with rates this week, I would think that the trend should continue going down. I'm curious why you would go long here... let me know.

Hey all,

First off, brad I get what you're saying. Though I get your point, I don't know if I would go long if the price closes above the trend line... it could very easily fall back below and continue with its overall trend.

Here's a chart that shows what I'm talking about. We have a decent tunnel over the past few months for the Kiwi-$... yet there were times when the price closed outside the trend lines yet moved back in within a few days.

I guess what I'm saying is that since trend lines are so subjective, just because they are broken 1 day, that doesn't mean that they are no longer relevant.

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Hi all. Seems like the GBPUSD is the hot topic. Here is my overall analysis of the currency pair.



Going by my chart, the downtrend since 11/07 remains in tact, with support holding at 1.93. From a technical aspect, the descending triangle formation makes me bearish, and I expect the pair to breakout to the downside. Also, the 50D SMA has crossed below the 100D SMA, while the 200D SMA continues to hold above the 50D and 100D, so I do not see any breakout to the upside.

My fundamental bias has also made me bearish as the UK remains open to substantial growth risks as the housing and credit crisis continues to take a toll on the economy, so I feel that the BoE will not be ready to raise rates any time this year.

For the US however, looking at the recent comments by Chairman Bernanke makes me feel that the Fed is looking to raise rates this year. The question is more of when they will do it, and if Bernanke will give us a clear cut sign that the central bank is ready to lift rates.

I have to agree with your logic on the long position. It looks like the pair is establishing a down trend which at least will drive the trading range at about 1.9400. That’s how short I can go in my position. Do you agree with my prediction?

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Yes, I do agree that the pair would fall to at least 1.94, and would keep a eye on whether the pair falls below the support at 1.93. That movement would be a key signal to short. From my analysis, I feel that if the 1.93 support breaks, the pair could fall further to test for support at 1.90.

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AUDNZD appears to be forming a Rising Wedge. Price action is on approach to test resistance. The highs in the MACD oscillator are getting lower as price action sets higher highs, creating negative divergence. Fundamentally, the NZD is weaker as the RBNZ is now expected to cut rates while the RBA is holding steady, so the broad uptrend is likely to remain intact. That said, an oscillation lower looks probable following a resistance test.

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I was wrong on my comments yesterday on GBP/USD. Thank good I haven’t lost any money on the pair yet. I will be watching for the USD …..

could you please show us how did you draft your Fabonnaci lines where did you start from prefer if yo zoom out a bit on your chart . . . and explain why did you use that perticular time and day to laydown your Fab lines, thanks buddy for sharing with us your views.

I'm not sure about this one, but here goes. I think it might be a good time to short the EURJPY. It has been close to its resistance line for a few days, and also important, is near the sentimentally important 170 line. The RSI just sent out an overbought signal like a day ago, and it wouldn't suprise me if the price goes down to its support for a little bit before retesting the 170 line.

Let me know what you guys think... we have a lot of everyone throwing out new ideas, and not a lot of responding to each others ideas (I'm guilty on this one too). Let's try to respond to what people are suggesting!

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