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- GBP/JPY Trend Reversal 9-28-2016
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- AUD/USD Strong Selloff Signal 9-9-2016
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- Non Farm Payroll, Trading Profitably
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- Forex Micro Lot Trading Offers Great Benefits
- Currency Strength Indicator For 28 Pairs, Two Methods
- Trading Forex Trends With Moving Averages
- Forex Market Analysis Spreadsheet For Eight Currencies
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Tag Archives: USD
In this article we will present a currency strength strategy for forex trade entries and another strategy for market analysis, both strategies work. These two strategies will improve any trader’s understanding of the current market condition, along with more much more profitable trade entries, trade after trade.
Currency Strength Strategy For Current Market Momentum
Measuring the current market momentum in real time is one currency strength strategy. In the example below the USD (US Dollar) was weak on all pairs. This drove significant movement for traders on this day (2-3-2016) on all seven of the USD pairs we follow at Forexearlywarning.com. There was also some minor NZD (New Zealand Dollar) and CAD (Canadian Dollar) strength in the market. So the NZD/USD moved strong to the upside, makes perfect sense. Since the NZD/USD was also in an uptrend at this time, it should continue higher on the D1 time frame to the 0.6800 resistance area.
Also, the USD/CAD dropped and is currently at one support level, so in this case a trader may choose to scale out lots and reduce position size. The EUR/USD also moved up strong on this day and broke out of it’s trading range, now this pair has additional upside on the D1 time frame as well. So you can also plan more trade entries going forward on the pairs that are trending. A phenomenal and profitable day of trading for any forex trader on only one group of pairs, with strong movements. The real time currency strength indicator you see below is The Forex Heatmap®, which provides live buy and sell signals for 28 pairs, including the US Dollar pairs and seven other currencies
Another Example of Intraday Currency Strength
This is another example of how to use intra day currency strength for strong trade entries. This example is from 7-5-2016. On this day the British Pound (GBP) was weak on all pairs, and the Japanese Yen (JPY) was strong on all pairs. This caused a strong sell off on the GBP/JPY. This pair sold off over 300 pips in one trading session, also, the major trend on this pair is down on the larger time frames, so more pips are possible despite this strong trade entry.
Strong signals like this happen routinely on the forex in the 8 currencies we track at Forexearlywarning.com, but since so many traders use technical indicators they always miss the pips. Using easy to interpret visual tools like The Forex Heatmap®, which monitor the strength of the currencies and money flows in real time, you can trade like a pro.
Using Currency Strength for Overall Market Analysis
Currency traders who like our real time currency strength tools can have a big advantage if they use currency strength to analyze the entire market every day. Always knowing the overall condition of the market, based on trends will raise the bar even higher and complete your overall currency strength trading system. Analyzing the market to determine the strongest versus weakest currency takes time but it well worth it, and your reward will be increased pips.
You can set up some moving averages for all of the JPY pairs, USD pairs, NZD pairs, etc. to start. Then drill down the charts daily using multiple time frame analysis. For example if all of the JPY pairs are in up trends, then you know the JPY is weak. Then, if you can find a strong currency to go with it, you are in business to make pips. On the Forexearlywarning website, we show you how to set up the trend indicators, and how to analyze the market by individual currency. This way you will not only be trading in the direction of the daily market momentum, but also with the trend.
The USD/CAD has a newly formed up trend on the D1 time frame. The current resistance level is at 1.3150, you can set a price alert here. When the alert hits check The Forex Heatmap® to confirm any buy trades. The next major resistance level is around 1.3400, so there is good pip potential above the alert price of approximately 250 pips. The trend indicators you see are 5/12 exponential moving averages set up on a meta trader platform.
Today in forex trading The Forex Heatmap®, our live signal trading signal software, indicated a buy on the NZD/USD. A snapshot of the signal is shown below. This pair moved strong to the upside and it broke some resistance levels, it could be forming a trend on the larger time frames, like the W1 time frame. Therefore, we will be looking to set more buy plans on this pair going forward, as this pair has considerable upside pip potential from here. The heatmap provides live trading signals for 28 pairs and assists traders with trade entry verification and management.
The GBP/USD D1 time frame is forming a new cycle, the current resistance is 1.5330. You can set a price alert here, when the alert hits look for a buy signal on The Forex Heatmap® to verify any buy entries. GBP and USD news drivers are tomorrow in the main trading session. This pair forming descending tops and bottoms chart pattern so scale out lots on any buy entries. The trend indicators you see below are exponential moving averages set up on multiple time frames.
Today in forex trading the EUR/USD had a buy signal on The Forex Heatmap®, andthis pair moved much higher. The EUR (Euro) was strong on all pairs and these pairs moved to the upside. The USD (US Dollar) also had some weakness. This pair could form a new D1 trend and continue back up to the 1.1450 area resistance, so we would hold some profitable lots. Other EUR pairs broke out to the upside and we will be preparing more trading plans to buy these pairs going forward. The trading signals you see below are from The Forex Heatmap®, a real time visual map of the forex market.
The USD/JPY chart and trend analysis indicates a strong uptrend on the largest time frames. The MN time frame is shown below. Current short term breakout point and price alert area is 124.00. You can set a price alarm here. When the alert hits check The Forex Heatmap® to confirm the trade entry. Past there there is some minor resistance at the 125.65 area. The overall potential is up to the 134.00 area. The charts you see below are our free trend indicators, which are 5/12 exponential moving averages, then analyzed with multiple time frame analysis.
The NZD/USD trend analysis shows that most of the major trends are now pointing down on this pair. When this pair reaches the 0.7225 – 0.7250 area it will begin to run out of support and we will start to set sell alerts at those prices. Below there it has room to drop down to the 0.7000 area, another critical support area. This trend analysis was done with the free trend indicators we provide to our clients, installed on meta trader. We then apply multiple time frame analysis by individual currencies. Right now the New Zealand Dollar (NZD) is weak on most or all pairs in the group
The GBP/USD currency pair is trending up on the W1 time frame. The analysis indicates that the current resistance is about 1.5750. You can set a price alert there and above that price look for a buy signal on The Forex Heatmap®, to confirm any buys. The 1.5750 area is denoted by the red line. The analysis of this pair was done with some simple trend indicators available to any forex trader, they are exponential moving averages. Then we use multiple time frames by individual currency to perform the analysis.
In this article we will examine the various US Dollar news drivers, and how these economic news announcements impact currency traders on a day to day basis. We will also discuss several techniques for profitably trading these US Dollar news drivers.
There are various economic news events that drive movement on the US Dollar against other currencies. Currency traders watch these news drivers, looking for opportunities to buy or sell the major currency pairs for short term profits, swing trades, or longer term trend trading. See the example below of the world economic news calendar showing some scheduled US Dollar news releases. Some examples of the US Dollar news drivers include Purchasing Managers Index, Unemployment Claims, Crude Oil Supplies, Non Farm Payrolls, and many others.
Volatility and price movement in the forex market can be expected after most of the scheduled US Dollar news announcements. Some US Dollar news announcements like the Federal Funds Rate, Non Farm payrolls or the FOMC Statement can provide substantial volatility and price movement. Volatile US Dollar news announcements occur between 25 and 30 times per month, not to mention all of the volatile news announcements from the other seven currencies we trade. There are plenty of times throughout the month when traders should be watching the market around these US Dollar news announcements. The top 7 major currency pairs that can be traded that are influenced by US Dollar news include the USD/JPY, AUD/USD, NZD/USD, USD/CAD, EUR/USD, USD/CHF, and GBP/USD.
Example US Dollar News Announcement:
On Friday March 6, 2015, the non farm payrolls US Dollar news was announced, like it always is on the first Friday of every month. Non farm payrolls is a monthly statistic researched, recorded and reported by the U.S. Bureau of Labor Statistics. Total non farm payrolls rose by 295,000 jobs for the prior month in February, shattering expectations for 235,000, resulting in the US Dollar strengthening. The employment situation report indicated that the February unemployment rate had fallen to 5.5%, down from January’s 5.7%.
How The US Dollar News Impacted Traders
After the non farm payrolls news driver the US Dollar (USD) strengthened on all pairs. Traders could have profited from the price movements that happened after the non farm payrolls news drivers, if they have access to real time professional tools. Check out the live indicator below, this is called The Forex Heatmap®. The heatmap can tell you in real time what pair to trade, and in which direction. It works for 28 pairs, including all 7 of the US Dollar pairs. After the NFP news the heatmap indicated USD strength in real time. The arrow system pointed traders to the USD/CHF for a buy and the NZD/USD for a sell.
The readings on the heatmap tell you how far these pairs moved. A 1.6% movement on the NZD/USD is about 115 pips of movement, and a 1.12% movement on the USD/CHF is about 110 pips. The entire group of USD pairs moved hundreds of pips total.
From the standpoint of the trends of the market, the NZD/USD drop was in the direction of the long term downtrend on this pair. This pair should continue down to the 0.7225 support level and likely continue lower. So any sell trade on this pair would have resulted in an intraday profit, but also ongoing pip potential in the direction of the trend. Traders can use the heatmap to make informed buy or sell decisions on a day to day basis for trades in the direction of the trend, or possibly short term trades (day trades) against the trend. We have a great article that discusses trading non farm payrolls in more detail for further reading on this subject.
All US Dollar news events on the world economic news calendar are of great importance to traders. The same thing goes for news events from all of the currencies we trade. Making pips is possible from any of these economic news announcements with our trading tools and live indicators. If the US Dollar has a series of economic news showing that the economy is strong in the USA, and inflation is heating up, the US Dollar could start to strengthen against other currencies as the Federal Reserve starts to raise interest rates. Then, long term trends could form on pairs like the USD/CHF and USD/JPY. As trend followers we find this information to be vital.
Unscheduled US Dollar News
The economic news calendar shown above will give traders access to scheduled US Dollar news drivers, along with news drivers from all 8 currencies that we trade. Sometimes world political events, natural disasters, government of central bank actions, etc., can cause strong movement in the currency markets. We recommend using audible forex price alerts to supplement the scheduled news drivers for better monitoring of the 28 pairs we follow. Finding strong movements and breakouts gets easier with multiple alert systems.
Conclusions – Currency traders like the US Dollar and the major pairs for trading, knowing how strong the dollar is in real time, is extremely valuable to them. Live indicators like the heatmap are strongly favored by traders for increasing trading accuracy on the US Dollar pairs. If traders would analyze all 7 major US Dollar pairs daily, they could easily determine if the US Dollar is strong or weak with simple trend indicators. This would lead traders to being able to perform a daily US Dollar forecast. We analyze the US Dollar daily at Forexearlywarning, along with 7 other currencies. We also prepare a forecast for the US Dollar every day.
Today in forex trading the major pairs (USD pairs) like the EUR/USD had strong movements. The USD was strong on most pairs and the EUR (Euro) was weak on all pairs. The EUR/USD pair had a sell signal on The Forex Heatmap®. This signal is shown below. This pair dropped to the downside along with several other EUR pairs. The EUR/USD is trending down on the higher time frames. We only see one more support level around 1.1150, then below there is has considerably more downside. We will look to continue to sell this pair in our trading plans going forward. Our trend based trading plans and live signals work on seven major pairs and 21 exotic pairs.