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AUD/USD faces key test with US CPI and Aussie jobs data loomingThe AUD/USD has found a bit of resistance around the 0.6640/0.6650 area ahead of the release of US CPI shortly. The small pullback is largely due to profit-taking ahead of US inflation data and Australian employment data due for release in the early hours of Thursday. The underlying trend is bullish and so long as we don't see a hot inflation report from the US, the path of least resistance would remain to the upside. The trend turned bullish on the Aussie ever since it created a false break reversal pattern beneath prior low around 0.6362. The sharp recovery from that level once it was reclaimed has lifted rates above several levels, including the 0.6500, 0.6565 and the 200-day average around 0.6600. These are now the key support levels to watch, especially the 0.6600 handle. As mentioned, the focus is now turning to US inflation data. Following a weaker PPI report on Tuesday, investors will be hoping for a weaker CPI print today compared to a headline and core prints of +0.2% m/m expected (or 3.0% y/y for headline CPI). If seen, or even if the data is line with forecasts, this could further cement expectations for a 50-basis point rate reduction in September and a total of 100 bp cuts for 2024. This scenario should further boost the AUD/USD outlook. However, a strong print, which is evidently not priced in, could have a big negative impact on this and other major FX pairs. By Fawad Razaqzada, market analyst at FOREX.com
Long
by FOREXcom
NZD/CHF: Historical Low Signals Potential ReversalThe NZD/CHF pair recently reached a significant milestone, hitting its lowest historical point around 0.48551. This drop has caught the attention of traders, particularly as it aligns with a potential reversal pattern. Analyzing the situation through the lens of the Commitment of Traders (COT) data and seasonality trends, we've identified a promising opportunity to enter a long position in anticipation of a price surge. The drop to 0.48551 marks a critical level where the pair has historically struggled to go lower, making it a key area of interest for buyers. The significance of this bottom cannot be understated, as it represents a psychological barrier where demand is likely to increase, leading to a potential reversal. The initial signs of this reversal are already in motion, with the price showing signs of recovery from this low. Further supporting our decision is the analysis of the COT report, which provides insight into the positioning of large market participants. The latest data suggests that there has been a shift in sentiment among these traders, with an increasing number of them positioning for an upward move in the NZD/CHF pair. This shift in sentiment is a strong indicator that the pair might be poised for a recovery. Seasonality also plays a crucial role in our analysis. Historically, certain periods have been more favorable for the New Zealand dollar, leading to a rise in the NZD/CHF pair. Our study of seasonal trends aligns with the current technical setup, reinforcing the likelihood of a price surge. In light of these factors—the historical low, COT analysis, and seasonality study—we've chosen to enter a long setup in NZD/CHF, anticipating a significant upward movement in the near future. Traders should consider this opportunity, as the potential for a reversal from this historical low could lead to substantial gains. ✅ Please share your thoughts about NZD/CHF in the comments section below and HIT LIKE if you appreciate my analysis. Don't forget to FOLLOW ME; you will help us a lot with this small contribution.
Long
by FOREXN1
1
GBPUSDThe beginning of the week looks like a very calm day without much volatility, but the scenario looks very good to take advantage of sales for the opening of London and purchases to our psychological point in NY as long as when Frankfurt breaks upwards at its opening, I will be on the lookout and I will make a decision based on what the price presents to me. Remember that a trader is not a fortune teller but an interpreter of the language of price. Greetings from yours truly and have a good day.
Long
by handerBankFX
The Illusion of Patterns: Why They Often Fail in TradingThe theory of pattern trading suggests that candlestick formations are rooted in psychological behavior. For instance, when a triangle or box pattern breaks out, it often signals a sudden surge of buying or selling following a period of consolidation. However, it's important to note that not all patterns yield reliable results. In this post, we will explore the reasons why some patterns fail and discuss how to enhance their effectiveness. A strong support level at which a doji appears, a breakout of the trendline by a large candlestick upwards is a clear signal for an uptrend. However, after the breakout, a new pattern appears, crossing out the signal of the previous one. The support level is eventually broken by the ongoing downtrend. Why don't patterns always work? Why should they work at all, considering that it's ultimately the trader who must take action? It's akin to expecting a hammer to drive nails without any effort on our part. A common misconception is to believe that the mere appearance of a pattern guarantees a certain outcome, while neglecting other crucial factors that can influence market behavior. A pattern is primarily a visual representation that should encourage traders to conduct a deeper analysis, not serve as a definitive signal for entry points. The theory behind patterns can be misleading; rather than promoting an analytical mindset when a pattern is identified, it often fosters a rigid response: “Buy if this pattern appears, and sell if that one does.” This approach is fundamentally flawed. A pattern is merely a compilation of historical data presented in a particular format, which does not inherently predict future price movements. Instead of relying solely on patterns, traders should focus on analyzing the broader context and underlying factors influencing the market. 📍 Why Patterns Do Not Work in Trading ? 1. Identification Errors. Once you've familiarized yourself with 15 of the most popular trading patterns, you may notice two significant points. First, theoretical analyses often feature illustrations rather than actual screenshots. This makes sense—capturing a "butterfly" or a "cup with a handle" can be quite challenging and may require either a vivid imagination or years of chart analysis. Second, patterns can transition from one to another; for instance, a long-tailed bar might evolve into three crows or soldiers. Additionally, there are instances when patterns may even contradict each other, further complicating their reliability. 2. Wishful Thinking. Traders often fall into the trap of wishing a pattern exists where it does not. This bias can lead to misguided decisions. 3. The Dominance of Other Factors. In addition to identification errors and wishful thinking, other factors—particularly fundamental ones—often have a much stronger influence on market movements. Patterns do not occur in a vacuum; they must be considered alongside economic indicators, news events, and broader market sentiment. Have you noticed that there is little research on the effectiveness of trading patterns? The reason for this is that accurately identifying the presence of a signal can be quite challenging. A pattern is simply a specific candlestick formation that has occurred in a particular way, but it does not guarantee any subsequent price movement. In contrast, indicators offer clear interpretations: for example, when the price crosses a moving average, that's a signal, or when an oscillator enters the overbought or oversold zone, it's a preliminary signal. The appearance of a doji, on the other hand, represents merely a balance in the market and is not always a definitive signal. Patterns cannot be rigorously tested like indicators because their signals tend to be ambiguous. 📍 How To Make Patterns More Effective ? • Remember that it’s not the pattern that dictates a trend or a reversal; it’s the underlying trend that shapes the pattern. For example, if a "triangle" forms within a consolidating market, it doesn’t necessarily indicate that a new trend will emerge. • Patterns tend to be more reliable over shorter time frames, typically represented by one to three candles. On the other hand, indicators provide an average value and, while less precise, they can have a longer-lasting impact. This means that following a reversal pattern, an opposing pattern might develop within just a few candles. If an indicator shows a significant deviation from the average price, there's still a good chance that the price might revert to the mean. Thus, while identifying corrections using patterns can be beneficial, we should exercise caution when predicting reversals. 📍 Conclusion Why don’t patterns always work? The answer lies in the approach taken by the trader. Patterns are merely tools; their effectiveness greatly depends on the skill and understanding of the person using them. There are no perfect tools in trading, but experience plays a crucial role in enabling traders to navigate various market conditions and make informed decisions. By honing your skills and deepening your understanding of both patterns and the broader market context, you can enhance your ability to utilize these tools effectively and respond to different trading scenarios. Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment 📣
Education
by Lingrid
11
GJ is still generally bearish, 2 scenarios belowAlthough it's generally still bearish, but sometimes GJ surprises us with a move against any bias, so we always need to have 2 scenarios in mind, the explanation is inside the picture itself. The highest probability will be for a sell but I keep the buy in mind as well. Here are the trade execution rules: 1. Do not take a trade inside the zone. 2. Wait for the 30m candle to actually close above or below the zone (with a wick) before executing. 3. Trade can be executed on the 15 minutes afterwards 4. Do not trade outside volume-hours, volume hours are 1 hour before London open till 1 hour after it opens, one hour before NY open and one hour after NY open. Regards, Marwan
Short
by Marwan_Moallem
1
GBPUSD: Your Trading Plan For Next Week 🇬🇧🇺🇸 GBPUSD is trading in a global bullish trend. We see a correctional stage on the pair at the moment. The market is currently stuck within a falling parallel channel - a bullish flag pattern. A bullish breakout of the resistance of the flag - a daily candle close above that, will be a strong bullish signal. It will signify the end of a correction and a resumption of a bullish trend. ❤️Please, support my work with like, thank you!❤️
Long
by VasilyTrader
3
MarketBreakdown | GBPUSD, USDCHF, EURAUD, US100 Here are the updates & outlook for multiple instruments in my watch list. 1️⃣ #GBPUSD daily time frame 🇬🇧🇺🇸 The market keeps correcting on a daily time frame after the pair updated the high. The price is steadily falling within a bullish flag pattern. I think that a bullish breakout of the resistance of the flag and a daily candle close above that can be a strong bullish trend-following signal. 2️⃣ #USDCHF daily time frame 🇺🇸🇨🇭 The market keeps recovering after a massive selloff. The closest resistance that I see on a daily is the confluence zone based on a recently broken horizontal support and a falling trend line. I will look for shorting opportunities from there 3️⃣ #EURAUD daily time frame 🇪🇺🇦🇺 The price successfully violated a major rising trend line and closed below that on a daily. I think that the market has a nice potential to keep going lower. 4️⃣ NASDAQ INDEX #US100 daily time frame The index is trading in a minor bearish trend on a daily. We see a local correctional movement at the moment. I see a strong supply area ahead. It is based on a key horizontal resistance and a falling trend line. I think that we can expect a retracement from that area. Alternatively, its bullish breakout will be a strong bullish signal. Do you agree with my market breakdown? ❤️Please, support my work with like, thank you!❤️
Long
by VasilyTrader
3
UK Housing Market Lifts GBP/USD Amid Social UnrestGBPUSD – technical overview Signs have emerged of the market wanting to put in a longer-term base after collapsing to a record low in September 2022. The door is now open for the next major upside extension towards the 2023 high at 1.3143. Any setbacks should be well supported ahead of 1.2500. R2 1.2861 – 12 June high – Strong R1 1.2800 – Figure – Medium S1 1.2673 – 6 August low – Medium S2 1.2613 – 27 June low – Strong GBPUSD – fundamental overview The Pound was still struggling on Wednesday from all the social unrest in the UK. However, we did see some demand on the back of UK house prices rising the most since January. Key standouts on Thursday’s calendar come from US initial jobless claims, wholesale inventories, and some Fed speak. Exclusive FX research from LMAX Group Market Strategist, Joel Kruger
by BlackBull_Markets
JPY Strengthens Amid BoJ Tightening, USD Faces HeadwindsThe Japanese Yen (JPY) exerted downward pressure on the US Dollar (USD) during the early European session. Despite the USD's initial attempt to recover value following yesterday's decline, the JPY continued to strengthen due to rising expectations that the Bank of Japan (BoJ) may implement further monetary policy tightening. The BoJ recently raised its short-term rate target by 15 basis points (bps), adjusting it to a range of 0.15%-0.25%. Additionally, the central bank announced plans to reduce its monthly purchases of Japanese government bonds (JGBs) to ¥3 trillion, starting in the first quarter of 2026. These moves have bolstered the JPY, adding to its momentum against the USD. Meanwhile, the upside potential for the USD/JPY pair appears limited as the USD encounters significant headwinds. Expectations are growing for a 50-basis point (bps) interest rate cut by the US Federal Reserve (Fed) in September. The CME FedWatch tool indicates a 74.5% probability of this rate cut at the September meeting, a sharp increase from the 11.4% chance reported just a week ago. From a technical perspective, incorporating our Supply and Demand analysis, we missed the initial entry in the Supply area due to a rapid spike that reached our entry point. Nonetheless, we are monitoring for a potential retest of that area for a possible short position. USD/JPY Chart ✅ Please share your thoughts about Japanese Yen Futures in the comments section below and HIT LIKE if you appreciate my analysis. Don't forget to FOLLOW ME; you will help us a lot with this small contribution.
CME:6J1!
by FOREXN1
1
USDCAD Analysis: Anticipating a New Bullish ImpulseUSDCAD is beginning a new bullish impulse after retesting the previous resistance area, which has now transformed into a strong demand zone. This retest is a crucial technical signal, suggesting that the pair is poised for a potential new upward movement. By examining the Commitment of Traders (COT) report, we observe that the positioning of large traders supports a bullish outlook for the USD against the Canadian Dollar. This sentiment is further reinforced by our supply and demand analysis, which highlights the demand zone as a key level where buying interest has emerged, providing a foundation for the price to move higher. Seasonality trends also play a significant role in our analysis. Historically, this period of the year tends to favor a stronger USD against the CAD, adding another layer of confidence to our bullish forecast. The confluence of these factors—the retest of the demand zone, favorable COT positioning, and positive seasonality—strengthens our expectation of a sustained upward movement in USDCAD. We are closely monitoring the price action and are prepared to capitalize on this bullish setup. Should the price continue to rise from the current levels, we anticipate further gains. However, it's essential to remain vigilant and adapt to any market changes that might influence our analysis. Additionally, for a comprehensive understanding of the factors influencing this expected bullish trend, please follow our detailed analysis on CAD futures provided below. This in-depth analysis will offer insights into the broader market dynamics affecting the Canadian Dollar and support our long position strategy in USDCAD. ✅ Please share your thoughts about USDCAD in the comments section below and HIT LIKE if you appreciate my analysis. Don't forget to FOLLOW ME; you will help us a lot with this small contribution.
Long
by FOREXN1
1