Thread: Chart of the Day

The EUR/NZD has been one of the markets most trending pairs, channeling downward from its February 2009 high at 2.5804. Since this time, the pair has move18, 000 pips over the past 17 months carving out a current low of 1.6921 in January of this year. Price is currently consolidating against the low allowing us chances to join the trend.

Fundamentally, the Euro is still under fire regarding the potential for a potential default of Greek debt obligations. This currency has made the Euro weak across the board specifically against commodity and high yielding currencies such as the Kiwi. As the fundamental projection has not changed since our last update, it is reasonable that our trend is set to continue.





Price Action

Taking price into a 4H chart, we can see price testing our resistance line near the 1.7800 level. Currently price has tested this trend line three times with the EUR/NZD to yet form a higher high. This signifies that our downtrend is to continue until resistance is invalidated by a breakout. CCI (20 periods) has helped confirm the pull back against the trend and is turning and is currently crossing back below the +100 mark on our indicator.





Trading Opportunity

My preference is to sell the EUR/NZD pair against resistance at 1.7800. CCI (20 periods) will be used as our trigger and an entry will be made once our indicator crosses below the oversold value (+100). Stops should be placed over the previous high near 1.8030. Profit targets should be set at 1.7340 or better to give a clear 1:2 Risk/ Reward ratio.

Alternative scenarios include price breaking higher and invalidating our current downtrend.


Walker England contributes to the Instructor Trading Tips articles. To receive more timely notifications on his reports, email wengland@fxcm.com to be added to the distribution list.

The EUR/AUD has had a relentless downtrend since its October 2009 high, being created at 1.9112. Recent movements to the downside however have been slowed by the formation of the May 11th low at 1.3226 of this year. As price has moved in a consolidating pattern over the past four months, the pair looks poised for another breakout to lower lows.

Fundamentally the Euro still looks troubled. The latest round of the European debt crisis has seen the downgrade of Portugal’s credit rating by Moody’s yesterday. Moody’s downgraded Portuguese debt by 4 marks moving it from a Baa1 rating to Ba2 which is considered junk status. As the fundamental picture still looks dim we can look for our trend to continue.




Price Action

Taking price in to an 8H chart, we can see a head and shoulders pattern being formed. Normally these patterns are an indication of a price breakout, confirming the creation of new lows on our chart. The left shoulder is formed from the June 21st high at 1.3606 followed by the head created by the June 27th high of 1.3686. The neck line has just been broken under the 1.3500 figure confirming the formation of our right shoulder of our pattern.



Trading Opportunity

My preference is to sell the EUR/AUD, staying with our established trend and in line with our charting pattern. Entry’s should be placed as close to resistance as possible near 1.3500. Stops should be placed above our neckline over 1.3625 or better. Limits should be by finding the distance from our high to the center point of our neck line. We should be looking for a minimum of 250 pips in profit placing our limits near 1.3250 for a clear 1:2 Risk/Reward setting on the trade.

Alternative scenarios include continued consolidation on the EUR/AUD prior to our break.


Walker England contributes to the Instructor Trading Tips articles. To receive more timely notifications on his reports, email wengland@fxcm.com to be added to the distribution list.

The CAD/JPY pair has been trending lower with its April 8th high firmly in place at 89.51. Since this point the pair has trended 852 pips lower as of today’s price action. Currently support is being tested at the May 8th low under 81.20. A potential break below this critical level may signals the possibility of a test of the March 2011 lows at 76.72

Fundamentally the Yen has remained strong, coming off of last week’s Labor Cash Earnings Reports. Results were released better than expected at 1.1%, indicating a growth in spending ability in domestic consumers. With Japanese Industrial Production numbers on the Economic Calendar , we will see if YEN strength will continue into the coming weeks.





Price Action

Moving to a 4H chart, we can see price currently ranging. Resistance is found matching our May 10th, May 19th and June 10th high near the 85.00 level. Support is found near 81.20 and has already been tested earlier today. As price moves to break either of these levels, this sets the trader up for a breakout scenario. For more information on breakout trading, join us LIVE (using your live account ID and Password) on DailyFX Plus at 1pm ET for our High Probability BreakoutTrading webinar.





Trading Opportunity

My preference is to sell the CAD/JPY using entry orders under support, placed at 87.75 or better. Limits should be looking for a minimum of 250 points. Stops should be placed near 82.00 better risking 125 pips for a clear 1:2 Risk/Reward ratio.

Alternative scenarios include price returning to resistance and setting entries near 84.00


Walker England contributes to the Instructor Trading Tips articles. To receive more timely notifications on his reports, email wengland@fxcm.com to be added to the distribution list.

The CAD/JPY continues to be one of the Forex markets strongest trending currency pairs moving down 1,169 pips from its April 8th high at 88.47 to this month’s low at 76.78. The pair’s descent has currently moved into a wedge pattern, consolidating prior to an attempt at lower lows. This sideways action against support allows traders ample time to find trending opportunities.

The Canadian dollar has not just been week against the Yen. The CAD has shown weakness against most major currencies. Fundamentally the currency has weakened with the easing of oil prices as discussed in, USOil Poised to continue 34% Sell-Off . As well, disappointing news such as Canadian Retail sales (Less Auto) , continue to point to a slowdown in their economy. As the economic outlook for Canada dims, so does our outlook for the currency.





Price Action

Taking price in to a 4Hour chart we can see the CAD/JPY pair trading in a well defined range. Resistance is standing at yesterdays high at 78.78. Support is defined by multiple candlewicks and testing as low as 76.78 on August 11th. With this in mind traders can look for trades in the confines of the range, with the direction of the daily trend. Ranges are also seen as a precursor to a breakout and emphasis should be put on stop placement.





Trading Opportunity

My preference is to sell the CAD/JPY on a turn of CCI under +100. Sell orders should be placed at resistance near 78.80. Stops should risk 80 pips to 79.60, which is 50% of our previous range. Limits will rest at 77.00 for a clear 1:2 risk reward ratio.
Alternative scenarios include price continuing breaking out to new highs.


Walker England contributes to the Instructor Trading Tips articles. To receive more timely notifications on his reports, email wengland@fxcm.com to be added to the distribution list.

It looks like the bloodbath has begun. Commodity bloc currencies are taking the brunt vs safe haven currencies at the moment. Unfortunately, I missed out on the recent plunge due to waiting for FOMC reactions but who can argue with the bearish candles on daily, weekly and monthly timeframes. I'm still getting used to not shorting the USD but its been easier to accept especially since the Swiss Franc is currently out of the picture. I shudder to think how strong it would have been if the SNB hadn't started intervening/interfering (although I'm not a fan of central bank interventions, I can understand their dilemma). I will remain vigilant for any downside risk reward potential in com vs safe havens on pullbacks but will also remain cautious on sentiment and further reactions/fundamentals.

Originally Posted by Slick

It looks like the bloodbath has begun. Commodity bloc currencies are taking the brunt vs safe haven currencies at the moment. Unfortunately, I missed out on the recent plunge due to waiting for FOMC reactions but who can argue with the bearish candles on daily, weekly and monthly timeframes. I'm still getting used to not shorting the USD but its been easier to accept especially since the Swiss Franc is currently out of the picture. I shudder to think how strong it would have been if the SNB hadn't started intervening/interfering (although I'm not a fan of central bank interventions, I can understand their dilemma). I will remain vigilant for any downside risk reward potential in com vs safe havens on pullbacks but will also remain cautious on sentiment and further reactions/fundamentals.

Yes, trading over the past few weeks has been quite interesting to say the least Slick ! Right now we are in the midst of a possible trend change and all pairs are on the verge of a possible turn or breakout scenario. We are all back from Vegas now and getting back in the swing of writing more articles ! Watch for chart of the day returning next week !

Thanks for sharing this chart. it would be most helpful in my merchant account course.

Originally Posted by michealjhon

Thanks for sharing this chart. it would be most helpful in my course.

It has been awhile since this thread has been updated but i would be happy to do so if enough people are interested. For now you can check out all of the chart of the day articles at the link below.

Chart Of The Day

Traders are often faced with dueling patterns on a potential trading opportunity. Sometimes, the patterns compete against one another as one will screams “bullish” and the other states “bearish.” This article will show you 2 competing patterns that are developing on the EURGBP and how to distinguish which pattern will likely ‘win.’


The two patterns discussed in this article are:


1.Bullish – Inverse Head and Shoulders
2.Bearish – Simple Trend Line Resistance

Click HERE to continue reading the rest of the article.

Article Summary: Creating a Forex trading strategy does not have to be a difficult process. Today we will review trading trends with MACD.

MACD (Moving Average Convergence Divergence) indicator is one of the most commonly used indicators in Forex trading. MACD was developed in the 1970s by Gerald Appel as an oscillator that graphically displays moving averages in relation to price. MACD falls into the same family as RSI, CCI and Stochastics, but this indicator can be used to assist traders with finding market momentum, direction, and entries by understanding the MACD line, signal line, zero line and histogram. Before the MACD can become useful to us as traders, we first need to better understand its components.

Learn Forex – MACD Components



(Created using FXCM’s Marketscope 2.0 charts)

To read the rest of Walker England's article, click HERE.

Article Summary: Creating a Forex trading strategy does not have to be a difficult process. Today we will review the basics of trading price channels.

Somewhere between directional trend trading and range trading support and resistance levels, traders will discover trading pricing channels. Pricing channels are an exciting way to trade since they are easily recognizable on your charts, and can be just as easy to plan a trading strategy around if you know what to look for.

First, let’s learn how to find a pricing channel. This can be done by identifying and connecting a series of highs and lows on your graph. Below we can see a descending channel on the USDCHF 4Hr chart. Notice how resistance has been formed by connecting the two previous highs to form a descending trend line. Since resistance is descending, support should be descending as well as the USDCHF creates a series of lower lows. These lows should run parallel to the resistance line that was previously drawn completing the price channel pattern.

While the USDCHF graph in our example today is a descending price channel, it should be noted that channels may also rise in an uptrend and trade sideways in ranging markets.

Learn Forex – USDCHF 4Hour Trend



(Created using FXCM’s Marketscope 2.0 charts)

To read the rest of Walker England's article, click HERE.

Article Summary: Gold has been trading in a well-defined range for over 16 months. As price approaches support traders will look for potential buy entries.

Gold, (XAGUSD) has been one of the markets strongest trends for the better part of a decade. However, since the end of 2011 the price of gold has been trading sideways in a modest range, neither pressing new highs nor breaking to fresh lows. Instead of being deterred by a sideways market, traders can switch to a range trading plan and begin looking for market opportunities.

The range on Gold can be seen below on a daily chart, and has been defined by clear levels of support and resistance. Resistance has been created near 1,800 by connecting a series of highs from November, 2011 through November 2012. Likewise, support has been identified below by connecting the current lows on the price chart residing near 1,550. Once these prices are found, traders can begin looking for opportunities for trading.

Learn Forex – Gold Support & Resistance



(Created using FXCM’s Marketscope 2.0 charts)

To read the rest of Walker England's article, click HERE.

Article Summary: Some currency pairs have calmed down while a few trends kept roaring. One of the latter is the EURCAD. We’ll take a look at the EURCAD trade opportunity as well as how you should react when you notice the future cloud crossing over.

Like many technical trading strategies, Ichimoku provides a plan to confirm your trade before entry. Confirmation meaning that there is no such thing as a sure fire trade but there is a higher probability trade depending on how many things you can verify before entering a trade. Ichimoku is an indicator and strategy that has multiple points of verification before entering a trade making it a higher probability indicator by nature.

One of the primary key points of verification is price in relation to the cloud. When price is below the cloud, you should be looking for a good place to enter a sell trade. When price is above the cloud, you should be looking for a good place to enter a buy trade.

Learn Forex: The Cloud Displayed In Rising & Falling Markets



(Created using FXCM’s Marketscope 2.0 charts)

To read the rest of Tyler Yell's article, click HERE.

Article Summary: EURJPY had the most volatility on Monday since the infamous “flash crash” of May 6th, 2010. Now, we have the Italian elections that could wipe out most progress made since the Eurozone’s mid-July announcement of Outright Monetary Transaction’s (OMT) that was meant to revive Italy’s giant bond market. Looking elsewhere, Ichimoku still points out a high probability trade in the direction of the overall trend with less volatile pairs. We’ll also discuss different levels of support for you to look to and use to exit a trade.

Volatility may be great for headlines but it is often a trader’s worst enemy. We recently found that most traders performed best when volatility was lower so the moves could be managed well. Because of that fact, focusing on less volatile pairs will often accommodate a newer trader more favorably than seeking the currencies with the largest Average True Range (ATR).

Learn Forex: Volatility Is Hard To Manage Successfully



(Created using FXCM’s Marketscope 2.0 charts)

To read the rest of Tyler Yell's article, click HERE.

Article Summary: The has AUDCAD as advanced as much as 656 pips during its latest trend. With news on the horizon, traders turn to MACD divergence for market direction.

With an interest rate decision pending from the Reserve Bank of Australia (RBA), many traders are trying to decide the direction of the Aussie Dollar. While traders have no way to predict the outcome of upcoming fundamental news announcement with 100% accuracy, traders can use technical tools to derive the probability of a market continuation or reversal.

One clue we can defer to for clues about the trend is divergence. Divergence is a technical tool used by many traders, but this one is unique as it compares price to the direction of an indicator. Today we will review the AUDCAD which is currently in a standing 656 pip uptrend. We will look for divergence to determine if there is a potential for a reversal on the pair.

Learn Forex – AUDCAD Daily Trend



(Created using FXCM’s Marketscope 2.0 charts)

To read the rest of Walker England's article, click HERE.