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UNDERSTAND CURRENCY CORRELATION Understanding price relationships between various currency pairs allows you to get a more in-depth look at how to develop high-probability Forex trading strategies. Awareness of currency correlation can help to reduce risk, improve hedging, and diversify trading instruments. In this article, we will introduce you to Forex trading using intermarket correlations. Meaning of currency pairs correlation in Forex Correlation is a statistical measure of the relationship between two trading assets. Currency correlation shows the extent to which two currency pairs have moved in the same, opposite, or completely random directions within a particular period. Analysis of two asset relationships using past statistical data has predictive value. By utilising the correlation coefficient, we can understand the relationship between two values and help manage risk. Impact of currency correlations on Forex trading They can form a basis of a statistically high probability Forex trading strategy. They can illustrate the amount of risk you are exposed to within your Forex trading account. For example, if you have bought several currency pairs with a strong positive correlation, then you are exposed to higher directional risk. You can avoid positions that effectively cancel each other out. EUR/USD and USD/CHF have a powerful negative correlation. If you have a directional bias, buying both EUR/USD and USD/CHF will counteract the moves in each pair. Understanding correlations can allow you to hedge or diversify your exposure to the Forex market. If you have a directional bias for a given currency, you can spread your risk using two strongly positive correlated pairs, in terms of diversification. If you are looking to hedge a position (holding it with low risk of losses) you can take a position in a negatively correlated pair. If you were to initiate a ‘long buy’ for EUR/USD, and it begins to move in an unfavourable direction, you can then hedge your position by purchasing a currency pair that has a negative correlation to EUR/USD, like USD/CHF. Currency correlations change in Forex Be aware that currency correlations are continually changing over time due to various economic and political factors. These often include diverging monetary policies, commodity prices, changes in central banks’ policies, and more. Given that strong correlations can change over time, it highlights the importance of staying up to date in shifting currency relationships. We recommend checking long-term correlations to acquire a more in-depth perspective. All in all, currency correlations could be a powerful tool you can use to develop high-probability trading strategies. You'll also be aided in risk management, mainly if you track the correlation coefficients over daily, weekly, monthly and yearly timeframes.
by Investorweo
Weekly TA: BTC-USD (20th Sept)BTC witnessed a volatile last week as it traded in a range of $44,000 to $49,000, it faced strong selling pressure at the higher levels which triggered the downside rally. However, it closed the weekly candle in the green territory and formed a Doji kind of a candlestick pattern. Crypto markets started this week with negative sentiments as the top crypto assets fell by ~5-10%. After gaining more than 60% from its July low levels, BTC seems to have started its pending contraction move as it is trading ~10% from its recent high of $52,945. Massive selling pressure is present in the range of $50K to $52K. As per the Fibonacci retracement levels drawn by connecting the July lows to the recent high, BTC is managing to sustain above its 0.382 level which is placed at $43,590 . On the higher side, the immediate hurdle is present at $46.5K , post this, the next potential sell wall is present at $48K followed by the psychological level of $50K . On the lower side, the nearest support is present at $43.8K and if this level is broken decisively, selling pressure can continue till the level of $42K followed by $40K .
by TradeDog-Research
ADA-USDT (All Time High- Breakout)With Cardano at the cusp to enter into the Goguen era with the implementation of Alonzo Purple , it marked the deployment of the first fully public Cardano testnet that supports the smart contract functionality. With the tentative launch of Cardano mainnet by the end of August/early September, Cardano’s infrastructure will provide the groundwork for the development of dApps and the creation of new assets on the Cardano blockchain, therefore, making it smart contract efficacious. The support to the lower side is present at $2.45 while it may face resistance at the levels of $2.85 and $3.15.
Long
by TradeDog-Research
SUSHI-USDTSushiswap is a DEX protocol that has retained its position among the top 3 DEX platforms in terms of Total Value Locked. Sushiswap has been able to whitewash its notorious image created due to its anonymous founder, Chef Nomi decided to trade all the ETH held in the development fund worth ~$13 Million on Sep 5, 2020, which ultimately tanked the Sushi prices by more than 70% in one day. However, Chef Nomi, later returned his holdings and apologised to the community. Sushiswap, in recent times, is trying hard to expand its ecosystem and serve the traders and investors to trade on its platform. This can be validated by the fact that Sushiswap has integrated its protocol with highly scalable and high-performance blockchains such as Solana and Polygon to nullify the impact of gas fees on Ethereum and thereby diluting the entrance barriers on its platform. On the Daily Time Frame, Sushiswap has been trading in a Range Pattern with the lower and upper band present at $8.8 and $21.7 respectively. If the price tends to sustain in the pattern, the current levels is the best place to accumulate due to lower downside risk while huge room exists to travel to the higher side. The immediate support and resistance are present at $8.8 and $13 respectively. With (0.27) Market Cap/TVL Ratio, it seems lucrative and undervalued given the present circumstances.
Long
by TradeDog-Research
CHILIZ-USDTChiliz, the fan engagement platform, rose to all-time highs in the first quarter of 2021. With the wave of NFT going on in the crypto markets ushered in by the headlines of Everydays: The first 5000 days being sold out for a whopping $69 million and Jack Dorsey converting his first tweet into an NFT brought the NFT ecosystem into prominence. Chiliz too witnessed enormous momentum in the first quarter of 2021, it went on a meteoric rise and witnessed 47x appreciation in its asset price thereby hitting a high of ~$0.94 on March 12. Since then, it has retraced by 78.6% of the prior single-shot bull move as per the Fibonacci levels. On the Daily Time Frame, Chiliz is currently trading below its 50 and 100 DEMA that signals the control of bears on its tokens. The support to the lower side is present at $0.18 while it may face resistance at the levels of $0.33 due to the presence of 50 and 100 DEMA. In the near future, it may face difficulty in its journey towards its highs. However, Chiliz as a platform holds value and it may be accumulated with a long-term investment horizon.
Long
by TradeDog-Research
SOL-USDTSolana is a high-performance layer-1 solution optimized for scalability, it can scale to 50K transactions per second. In the past 1 week, in terms of development activity on the blockchain, Solana has secured the 3rd spot with 348 commits. TVL locked in the DeFi protocols built on Solana Blockchain stands at $997 Mn. Solana came down ~67% from its all-time high of ~$58.3 and has currently taken support at 50 DEMA. It has bounced back from its recent low of ~$19.1 and is currently trading at $43.4. It is currently forming a strong bullish candle and the news of acceptance of BTC as a Legal tender is set to support the crypto ecosystem to rise higher. The support to the lower side is present at $36 while as SOL is trading above its 50 DEMA, it looks adamant to move to new highs and may give targets of $50.
by TradeDog-Research
MATIC-USDTOn the Daily Time Frame, Matic is currently trading at its 20 DEMA. If this support level breaks, the level of $1.47 followed by $1.30 (50 DEMA) will likely act as a support level to the lower side. On the higher side, a Resistance trendline can be drawn connecting the recent two highs. Thus, the level of $1.95 will likely act as resistance. A close above the trendline will trigger the price to the level of $2.2 and $2.47 respectively. With the leaders of the crypto space such as Sushiswap, Aave partnering with Polygon, the shift of IDO platforms such as Polkastarter, Dodo and Poolz and the rising trend of projects from all verticals- NFT, DeFi, developing on Polygon, Matic is set to gain its position in the top 10 crypto projects.
MLong
by TradeDog-Research
MDX-USDT( Ascending Channel)Mdex is an AMM based decentralized exchange that implements a dual-chain DEX model based on the Huobi Eco Chain and Ethereum. It combines the advantage of the low transaction fees of the Huobi Eco Chain and the liquidity of the Ethereum ecosystem, therefore, offering a seamless trading experience on DEX. In 1 Hour Time Frame, MDEX is forming a Ascending Channel Pattern and is currently trading at the upper band of the pattern. Key Levels to Watch Out For: Closing above the level of $2.38 will trigger a Breakout, therefore, it may easily reach the level of $2.65 while the support to the lower side is placed at $2.2 followed by $2.1 .
Long
by TradeDog-Research
2
UNI-USDTWith the current crash in the crypto markets, Uniswap too got trapped in the windfall wherein it plunged by ~65% from its trading price of ~$45 on May 3. From its recent low of $13, it has gained more than ~100% and its CMP IS $28.8 at the time of writing, which is still ~36% short of its all-time high. As per smaller TF’s (4Hr and Daily), UNI has managed to close above its 20 and 50 EMA and these EMA's are likely to act as support for UNI price and act as a cushion whenever the price approaches them. The immediate resistance is placed at $29. Closing above the level may witness UNI making higher high and higher low formation and on the higher side, it may face resistance at a level of $35 followed by $39. The support to the lower side is present at $26 while $23 will serve as the next level of support.
Long
by TradeDog-Research
ADA-USDTAs per the CoinShares' weekly flow report, Cardano is at the top of the list of crypto assets garnering inflows of $10M. With the environmental concerns revolving around PoW protocols, Cardano presents itself as an energy-efficient PoS blockchain network while it has logged in 1 Million ADA Wallets witnessing a fivefold increase in 2021 itself. On a 4 Hr Time Frame, ADA is currently taking support at 20 EMA and is looking bullish. The immediate resistance is placed at ~$1.8, crossing this level, ADA may move to the levels of $2.1. The support to the lower side is present at $1.62 followed by $1.45.
Long
by TradeDog-Research
BTC-USD(Head and Shoulder Breakdown)Bitcoin after rallying ~12.5x from its low on the Black Thursday (March 12, 2021), was showing signs of exhaustion. Although Bitcoin surpassed the level of 60k, since February, it had started forming strong Bearish candles giving us the first indication of the move getting exhausted. In April, while Bitcoin hit its All- Time High of ~$64.8K, the weekly candle closed in red followed by a bearish candle which closed below the level of $50K. Until this time, there was a clear indication of Head and Shoulders Pattern in formation. With the news of Tesla halting the acceptance of BTC, the Right Shoulder broke the baseline of the pattern and closed below it. The news of the ban in China added fuel to the fire and recorded it in BTC history as the day with the biggest fall in terms of points. The support for the BTC is present at $38.9K, $34K followed by the major support at $30K.
COINBASE:BTCUSD
by TradeDog-Research
AAVE-USDT(Horizontal Channel Breakout)An open-source decentralized lending and borrowing DeFi protocol built on top of Ethereum and enable the users to borrow and lend a wide range of crypto assets without the involvement of any third party institution like a bank. The total valued locked (TVL) in lending protocols currently stands at ~$39.6 Bn, which Aave alone has locked in ~$11.96 Bn in its protocol On the daily time frame, Aave has been consolidating in a range since Feb 2021. It has given a breakout from the range and it seems to move to its new highs. The support to the lower side is placed at $530 which is the upper limit of the range while it may give targets of $750 in the near future.
Long
by TradeDog-Research
BNB-USDT(Consolidation Breakout)Binance is the talk of the town and is trading near its all-time highs fueled by ~$595 Mn token burn and its conviction to reduce its current circulating supply to 100 Million has motivated market participants to price it a premium valuation. The insignificant growth of the DeFi protocols on Binance smart chain has also contributed for pushing the BNB price higher. On Daily Time Frame, BNBUSDT gave a Breakout from the Wedge Formation and made its high of $680 (May 3, 2021). It was eaten away by the Bearish Engulfing Candle the following day. However, it was not supported by huge volumes which undermined the power of the bearish momentum. The consolidation after the breakout from the Wedge has also been done away with by a strong Bullish candle in the making. Key Levels to Watch Out For- The support to the lower side is present at $600 while BNB may give targets of $840 to the higher side.
Long
by TradeDog-Research
2
ZRX-USDT(Level Breakout)0x is a liquidity aggregator that supports both fungible (ERC20) and non-fungible (ERC-723) tokens. Volume on the protocol stands at 375 Million at the time of writing. The volume is up ~7.5% on a 24 Hr basis. In the trailing 90 days, the major hurdle in the upward journey of ZRXUSDT is present at $2 . While on April 9, ZRX broke out the level and seemed cherished to move to new highs, it proved out to be a Fake Breakout and ZRX again fell to the levels of $1.25 . On May 6, ZRX on Daily Time Frame has again given a decent breakout above $2 and is more probable than earlier to move to new highs. Key Levels to Watch Out For: ZRX has been trading in a pattern somewhat similar to Cup and Handle Pattern and has given a breakout. The support to the lower side is present at $1.95 while it may easily give a target of $2.84.
Long
by TradeDog-Research
LINK-USDT(Consolidation Breakout)The prime leader of the decentralised oracle network and the backbone of the protocols is all set to fly to New highs. On 2 Hourly Time Frame, LINK is looking really bullish. It has given a breakout from the Bullish Triangle pattern and is currently consolidating near the resistance level of $41. Closing above this level may trigger the price to New highs. Key Levels to Watch Out For: The support to the lower side is present at $38 while it may move to the levels of $50.
Long
by TradeDog-Research
ADA-USDT(Horizontal Channel Breakout)While Cardano remained silent in terms of price action as it was Consolidation in a range ($1.01- $1.48) , its peer crypto assets took advantage of this opportunity and dragged ADA to 7th place in terms of Market Capitalisation snatching away its title of 3rd most valued crypto asset at the beginning of 2021. In the 4 Hourly Time Frame, ADA broke away all the shackles of bears, which can be validated by the massive surge in volumes to the levels of 363.7 Mn. It has marked the initiation of Bull dominance and is likely to reach untouched levels. Key Levels to Watch Out For: The support to the lower side is present at $1.4 while ADA is well-positioned to give the target of $1.9 .
Long
by TradeDog-Research
2
1inch-USDT(Consolidation Breakout)1Inch is a DEX aggregator built on Ethereum blockchain that provides traders to place large orders through its swapping techniques across different DEX. At the time of writing, $347.6 Mn is locked in its protocol. On the Daily Time Frame, 1INCH is trading in a narrow range ($5.15- $5.8) for the past 7 days. Key Levels to Watch Out For- The major resistance to the higher side is present at $6.35 . Closing above the level may witness huge momentum to new highs. After the Breakout, 1INCH may give targets of $8.2 . The support to the lower side is present at $5 .
Long
by TradeDog-Research
3
Multi TF Analysis of BTC-USDThe overall market structure is Strongly Bullish while the CMP of Bitcoin is ~$57930. On the Weekly Time frame, Bitcoin after giving a pullback of ~25% in the third week of April has retraced back, it has been engulfed by a strong weekly candle the following week which indicates the accumulation by the bulls after the correction. The immediate resistance level is placed at $60,000 and if bulls manage to clear the hurdle decisively, further bullish momentum is most likely to continue till the first level of $67,000 followed by $70,000. As Bitcoin has given a breakout from the Inverted Head and Shoulder Pattern, thus its nearest support is placed at $55,000, followed by the major support being present at $52,500. As per smaller TF’s (4Hr and Daily), BTC has been taking support at the 20 and 50 DEMA and is currently looking bullish. Closing above $58,500 on 4 Hr Time Frame will act as confirmation for continuation of its bullish momentum.
COINBASE:BTCUSDLong
by TradeDog-Research