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For past couple of weeks Gold has turned to bearish after establishing a six-month high at 1392 approx on 17-Mar and started his downfall. A major factor that pushed this yellow metal through technical level was Fed chairman Yellen’s comments on 19 th of March 2014. Gold continued moving lower and reached 1285 level but did not breach this level as its getting a strong support from trendline. Also, by applying the Fibonacci retracement tool the 1285 matches with the 50% retracement level and Gold has retraced from here. Although a strong reversal signal seen on Gold’s Daily chart which is a “Bullish Harami” candle, it is a bullish reversal candlestick pattern which is moderately reliable and tell us that the trend is about to change. By following the trends the 50-period moving average crossed above the 200-period moving average and this is an additional negative indication which called “Golden Crossover.” However, the RSI (5) is giving us oversold signal and it is below 30 terr...

5 Events Could Cause Volatility Spikes Tomorrow Who needs the NFP Friday when we have FIVE major economic reports coming up tomorrow! Here’s what you need to know about tomorrow’s major events. BOE monetary policy statement (12:00 pm GMT) With the manufacturing, construction, and services PMIs printing mixed reports pound traders will likely look to the Bank of England (BOE) decision for direction. Unfortunately, the BOE isn’t expected to make any changes to its interest rate and monthly asset purchases. If this is the case then we’ll have to wait for the  Monetary Policy Committee  (MPC) meeting minutes to see what the central bank thinks of the economy. ECB monetary policy statement (12:45 pm GMT) In his last European Central Bank (ECB) press conference Draghi hinted that deterioration in inflation outlook or “unwarranted” tightening of short-term money markets could trigger action from the central bank. But with euro zone inflation, GDP, and PMI surprising to...

By Kathy Lien While investors are eagerly awaiting Janet Yellen’s testimony today before the Senate Banking Committee, the sell-off in currencies, equities and Treasury yields indicate that risk aversion is the overriding theme in the financial markets this morning.  A smaller decline in durable goods orders helped to ease the selling but with jobless claims rising, the relief rally in USD/JPY and other major currencies was limited.  Durable goods orders fell only 1% in the month of January compared to a forecast of -1.7% but what made the report positive for the greenback was that excluding transportation orders, durable goods rose 1.1%. After the sharp decline in December, investors were really hoping for a rebound in January and even though there was a large pullback in transportation orders, demand for other goods improved significantly – a sign that confidence could be improving in the economy. Meanwhile the 14k increase in jobless claims is discouraging but not overl...

Leverage is the ability to use something small to control something big. Specific to forex trading, it means you can have a small amount of capital in your account controlling a larger amount in the market. Stock traders  will call this trading on margin. In forex trading there is no interest charged on the margin used and it doesn't matter what kind of trader you are or what kind of credit you have. If you have an account and the broker offers margin, you can trade on it. The obvious advantage of using leverage is that you can make a considerable amount of money with only a limited amount of capital. The problem is, that you can also lose a considerable amount of money trading with leverage. It all depends on how wisely you use it and how conservative your risk management is. Leverage Amounts Leverage is usually given in a fixed amount that can vary with different brokers. Each broker gives out leverage based on their own rules and regulations. The amounts are typically 50:1, 100...

The Japanese yen was the big winner of a volatile week that saw new levels for a few currency pairs, and ended with risk off sentiment. The Fed decision is naturally the most important event, and is accompanied by the first releases of GDP in the US and the UK, as well as other events. Here is an outlook on the main highlights on the coming days. US existing home sales disappointed with 4.87 million. Even though the next taper is on the way, it served as an opportunity to sell the USD against the recovering pound (lower UK unemployment rate) and euro (strong German PMIs). It was a different story against the Aussie and the CAD, as both were hit by their central banks. A talk about AUD/USD at 0.80 in Australia and relatively dovish comments in Canada sent these currencies to multi-year lows. And towards the end of the exciting week, the crisis in Argentina together with fears about China boosted the safe haven yen. Let’s start, Updates: German Ifo Business Climate: Monday, 9:00. German...

Event risk peaks today with the release of the US NFP report for December.  OK or better data will be USD-supportive though whether this is able to generate much impact on EURUSD remains to be seen.  Mixed EZ data and “strengthened forward guidance” from the ECB this week has failed to have much downward impact on the EUR and the market remains well supported in the mid/upper 1.35s at the moment.  We still rather favour looking to sell EURUSD rallies to the mid 1.36s for a push back to 1.33/1.35. USD/CAD: Taking the Under on Canadian Jobs Open 1.0863     Range 1.0836/1.0866     Previous Close 1.0843 The CAD got battered by the contrasting Canada/US trade data earlier in the week (USDCAD rose 1.2% on the day) so the prospect of a combination of better-than-expected US data and worse-than-expected Canadian data, at least according to TD’s forecasts, suggests significant upside risks for funds today.  We don’t think this move up is ...

When I have a string of losses I pause and reflect and ponder if it is me trading badly or just the market environment not being conducive to my trading method. Here are 10 questions we will do well to ask ourselves at times when we seem to be out of synch with the market. Are we taking good entries? We have to enter at a high probability moments to put the odds of winning on our side. Buying support bounces, shorting resistance levels, or entering on confirmed break outs. Are we trading too big? Big position sizes can cause us to stress to much and exit too quickly, we must trade a comfortable level that allows us to overcome our emotions and stick to our trading plan. Are we risking too much per trade? We need to cap our risks at no more than 1% to 2% capital at risk per trade. It is very difficult to make back big losses on a percentage basis it is much easier to steadily grow an account by avoiding those big losses with correct position sizing. Are we trying to fight ...