Who to trust during the high volatility events?

The financial markets have been shaken recently by high volatility due to the slew of fundamental and geopolitical events surrounding the main currencies of the globe. The Euro has been losing ground amid worries about Greece and its future plans, the Dollar has been gaining ground on a possible rate hike by the FED during this year, and the Swiss Franc gained an amazing 20% versus the Euro after the National Swiss Bank let the currency float freely.

The events that came after the announcement by the National Swiss Bank, was a test to the most important Forex brokers around the world. Alpari had to declare itself insolvent, FXCM had to be bailed out by an outside company, and even CitiFX reported millions of Dollars in client loses during the National Swiss Bank event.

But this was also a good opportunity to see which brokers handled the situation professionally. Actually, the brokers that best came out of the recent events were the brokers that took measures before the panic started. For instance, Dukascopy raised its margin requirements on the CHF crosses since October and so did ActivTrades since November. This prevented the clients from these brokers from suffering huge losses on their accounts. The official announcement by ActivTrades may be found here:

http://www.activtrades.co.uk/index.aspx?page=important_announcement

Possible test and bounce at the 133.00 level on the EUR/JPY

After today’s statement from the FED, the Euro versus the Yen started to move rapidly in both directions, but after a moment of high volatility, the pair seemed to have chosen to go down. The next support on the pair is the 133.00 level. Let’s be on the lookout for a possible visit of the price to the 133.00 level, from where we may see a bounce to the upside. If the price does not bounce, but breaks below this level, the best thing to do is to wait for the pullback for a possible short entry.

What is the daily turnover in the Forex market?

The volume of trades that are being executed daily in the Foreign Exchange Market is rising. The average daily volume for the month of October in North America was more than one trillion Dollars. Daily Forex volume turnover in the United Kingdom has also been on the rise, reaching record highs in April of last year. That month, the daily average turnover for the Forex market was 2.7 trillion Dollars. In Japan the daily Forex turnover is rising as well with 373 billion Dollars exchanging hands on a daily basis.

The data shows that more traders are being attracted to the Forex market every day and the Forex stays as the financial market with the highest expansion rate. However, we must keep in mind that the rising figures in the Forex daily turnover is also being caused in great part by the rising volatility. The divergent monetary policies between the FED and the European Central Bank has fueled the current volatility that we are seeing in the markets and that is why volumes are also rising.

The GBP/JPY tests the 179.00 level

The GBP/JPY has retraced more than 300 pips during today’s session. On its way to the 179.00 level, the pair encountered some resistance around the round number levels, where it tried to consolidate for a while, but the price kept rising until reaching the 179.00 level. From that zone, the price may try to bounce back down, but we must be attentive to a possible breakout, which could take the price to the next round number level of 180.00.

Pullback on the EUR/JPY to the 133.00 level

The Euro remains weak versus most of its major counterparts and we can see on the 15 minute chart of the EUR/JPY that the drop has taken the price all the way to the 131.00 level. This is an amazing drop of more than 300 pips, from which the price bounces back up another 200 pips to visit for a second time the 133.00 level. When the price broke the 133 level to the downside today at the beginning of the trading session, it pulled back to the 133 which acted as a resistance, this time the 133 level seems to be acting again as a good resistance and the price may go back down to its medium term bearish trend.

The EUR/JPY is close to touching the 134.00 level

The Euro has weaken versus the main currencies, including the Yen. The pair has dropped so rapidly that it is very close to the 134.00 level and we could see the price testing that level. The round number level could act as support for the pair but if this Friday’s manufacturing data out of Europe comes out lower than expected, then the pair may break that level to the downside.

Another drop on the AUD/USD

The Australian Dollar has come back to the 0.8100 level versus the US Dollar, but we can clearly see that the level has been a very good support for this currency pair. The price may try to stall at this zone or even try to bounce to the upside. But we must keep in mind that as he price keeps testing the same support over and over, the chances of a breakout to the downside are higher. Therefore, we must be vigilant to a possible breakdown, which could take the price all the way to the 0.8000 level.

The GBP/USD continues consolidating on the daily chart

The Pound versus the Dollar keeps oscillating between the 1.5100 zone and the 1.5200 level. The pair has found a good support on the 1.5100 and the longer the price stays consolidating around this area, the stronger the movement may be when the price breaks out of consolidation. We can also notice on the daily candles that there has been a lot of volatility lately, due to the relatively long shadows. However, if we see a breakout to the downside, we should wait for confirmation of the breakout and then the pullback to this same area for a possible short entry.

Pullback on the EUR/JPY daily chart

Will the 137.00 level act as a resistance on the EUR/JPY? So far the pair has been steadily correcting to the upside and has broken the 136.00 level after bouncing from the 135.00 level. At the moment the price is very close to touching the 137.00 level and since the bearish trend is still in place, the price may try to stall at that level or even try to bounce back down. Therefore, let us pay attention to a possible visit to the 137.00 level, because some trading opportunities may be present there.

How to find a good Forex broker?

What has happened recently with the rally on the Swiss Franc has left some Forex brokers practically on the streets. The shares of FXCM trading in the New York Stock Exchange fell from approximately 13 Dollars to 98 Cents. After Leucadia National Corp. lent FXCM 300 million Dollars, the shares rose to 4 Dollars. Other brokers like Alpari had to declare themselves insolvent and had to close shop. Because of what has happened is why right now is the best opportunity to choose among the best Forex brokers that managed to cover themselves and protect their clients from over-leveraging on the Franc.

A notable case is Dukascopy, which managed to see what was coming since November of last year when they rose the margin requirements on all CHF positions. ActivTrades was also another broker that rose the margin requirements on the CHF since last year and then they disable all trading on the CHF since last month.

Therefore, now is the moment to analyze and see which were the brokers that best came out of this event.

Bearish trendline is holding down the Kiwi

On the NZD/USD we had noticed that the price has been oscillating within a bearish channel, but is really the upper boundary of the channel or the upper trendline the one that has been holding the price down and it has not allowed the pair to break above the zone. However, a breakout of that trendline to the upside could take the price to the 200 exponential moving average around the 0.8037 level. From that moving average we could see a bounce back to the downside.

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The Kiwi stays within a bearish channel

The New Zealand Dollar versus the US Dollar has been trading within a well formed bearish channel, which is practically parallel to its 200 exponential moving average on the daily chart. The price may try to visit the lower trendline of the channel from where it may bounce back up. Therefore, we must be attentive to a possible long entry from that area.

However, we must realize that if the price breaks out of the channel to the upside or to the downside, its momentum may accelerate in that direction and we may get surprised on the wrong side of the market.

The EUR/JPY keeps breaking new lows

The Yen has been strengthening versus the major currencies, including the Euro. Last week the EUR/JPY found a good support at the 140.00 level, but today the bearish momentum has kept going and the pair broke the 140.00 level to the downside. From this point on we could wait for confirmation of the breakout of the 140 level and wait for the pullback for a possible short entry. Next major support should be the 139.00 level.

Correction on the EUR/USD daily chart

The Euro versus the Dollar has found a good support level around the 1.1800, which we have been watching during the last couple of days, due to the fact that the daily candlesticks have left a relatively long lower shadow. The lower shadows of the candlesticks indicate to us that the buying interest was rising and that the downward momentum was losing steam. Today we see a bullish correction on the pair, supported by the mix fundamental data that came out of the US.

Is there a possible change of direction on the GBP/USD?

The Pound versus the Dollar has been in a bearish trend and has been breaking key support levels consistently. However, we can see on the daily chart of the GBP/USD that when the price reached the 1.5100, the momentum has lost strength. The relatively long lower shadow of the last couple of daily candles is another indication that buying interest may be rising. Non the less, tomorrow we have the non-farm payrolls report out of the US, and if the number comes out better than expected, then the Dollar may strengthen and the pair may reach the 1.5000.

Possible hammer on the GBP/USD daily chart

The hammer is a bullish reversal candlestick formation. It means that the price may change direction to the upside if the pattern is confirmed. The long lower shadow with the small real body of the candlestick is an indication that the buyers came in strong towards the end of the trading day. If tomorrow’s candlestick is bullish, then the formation is confirmed and most likely will try to correct to the upside. 

Main Colombian stocks available at ActivTrades

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