Asian Markets in the Drivers Seat

The FX week began Sunday evening in New York with the China Equity markets selling off. Initially the US Dollar gained ground - but then gave it back over the past few days. China’s equity markets have shed over 4% in the past two days as signs of exports and lack of internal demand are weighing heavily on the low cost producer. Most likely the weak consumer demand is continuing to trickle back to the manufacturing floors around the Asian markets.

S&P Chops Around - FX Markets Go Sideways

The SP 500 and Futures markets have been consolidating during most of the New York sesssions Monday and Tuesday. This has been keeping the FX Sessions quite choppy. The Yen crosses regained some of their strength and are currently poised at around a 50% retracement at mid week.

by Jerry Furst Sr. Technical Analyst at Investors Education Network

Technical Analysis Explained - at The Right Edge… But 1st…

Lately there has been so much Fundamental News going on I have writers block - I don’t know what to write 1st! So I decided to break the blockage by just doing a Technical Analysis lesson on chart patterns, rather than get into the BRIC Meeting that took place in Russia, being attended by the contested leader of Iran, or how the TIC data showed China has started selling, or how Ken Lewis CEO of  Bank of America told congress he was forced by the Fed and Treasury to take on Merrill Lynch, or how… well here’s the TA…

June 16, 2009 as the European Session opens we have some really nice examples of Technical Analysis - Chart Patterns on the 4 Hour Charts.  It’s worthy to mention that the 4 Hour Charts will be a good guide for the “Intermediate Term” Forex Trader.

You can then trade the shorter time frames accordingly! - Just Follow the Charts

Rounded Top

GBP-JPY 4 Hour Chart Shows Downward Trend Continuing after Completing a Rounded Top

“M” Pattern - Double Tops - Failed Inverse Head and Shoulders

AUD-USD 4 Hour Chart Shows a Double Top and ”M” Pattern May Be Next. Note that the “Inverse Head and Shoulders” failed to break the “Neck Line” and bounced back down to the “Top of the Head”.

Twin Peaks - Possible “M” Pattern

GBP-USD 4 Hour Chart Shows “Twin Peaks” or “Double Top”. Look closer and you will see a “Head and Shoulder” Pattern on a 30 Minute Chart that may propel this chart further downward to complete a “M” Pattern.

Head and Shoulders - Rounded Tops

EUR-USD 4 Hour Chart - Head and Shoulders formed with good examples of Rounded Tops. Ready to “Bounce or Break” off the “Neck Line”

Rounded Bottoms and Inverse Head and Shoulders

USD-CHF 4 Hour Chart Shows Rouneded Bottoms with Inverse Head and Shoulders

Rounded Top  - Inside Triangle Pattern

USD-JPY 4 Hour Chart shows Riunded Top Completed and then Breaking the Trend Line of a Triangle completes the Triangle’s Target in a prompt fashion.

Rounded Tops and Bottoms - In Summary

Can you see how these patterns repeat and show inside of other patterns?

Happy Pattern Hunting and feel free to email me when you see patterns at the “Right Edge” that get your attention - or need clarification.

Happy Trading in Good Health

Jerry Furst  is an active trader, educator, and Founder of Investors Education Network.com (IEN), He is available as a Mentor and Trading Coach to Select Clients  Click Here for a Free Self Evaluation Survey.

By Jerry Furst - Sr Analyst: 1st on Forex -  Investors Education Network

Mind Your Head - Bank Stress Test Leaves No Pain!

The US equity markets continue to look bullish and some are calling the Bears out for their final slaughter - The long awaited, delayed, and leaked Bank “Stress Test” hit the market with a whimper on Thursday.

The results - 10 of the19 “Too Big to Fail” banks will need about $75 Billion USD to shore up an estimated total of $599 Billion in losses.

S&P 500 Daily - as the chart above shows the 200 MA on the S&P 500 within tagging range - also note the previous years “Sell in May and Go Away” working quite well. Who’s getting ready to clock their profits and take off for the summer?

The Euro has been trending higher and a review of my posts of last week show the Head and Shoulder Pattern in play with an ultimate pattern target of 1.3750 only 100 pips away as of this writing - May 10^th  - 22:30 EST

EUR-USD - The two charts above show last weeks post compared to where we are now. (click to enlarge charts) - Nice trend in play

Loonie Looms Large - Back to Parity?

The long consolidation on the USD-CAD that began back in October of 2008 is over! The Daily and 4 Hour charts posted here show a beautiful Head and Shoulder breakout with strong momentum to the downside.

USD-CAD The above charts from April 19 and Today May 11^th show that there is potentially another 300 pips to go before the Head and Shoulder pattern plays out at around the 1.1200 range. (click to enlarge charts)

The Week Ahead - Calendar and Webinar

US News to Watch for this week includes:

Tuesday - International Trade and Treasury Budget

Thursday - PPI - Weekly Jobless Claims

Friday - CPI - TICS Data - Consumer Sentiment

Tune in to the “1^st on Forex” Webinars on FX Street

Every Monday - The Week Ahead at 16:00 GMT (12 Noon Eastern)- Click Here

Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN), He is a Mentor and Trading Coach to Select Clients  Click Here for a Free Self Evaluation Survey.

If You Can’t Say Anything Good - Keep Your Mouth Shut!

Last week I was invited to the Federal Reserve in Miami for Dinner and a Seminar, The Filet was excellent! The subject matter made me uneasy as I came to realize that there is a bit of a disconnect between the realities on the ground and the knee jerk reactions taking place in Washington. 

I would like to report that the end is near for our economic troubles - however I think I will just let the Fed and the Treasury do what it does - they have some good ideas and they do seem to be taking action - although it all seems to be symptom based and observational in nature -  versus leadership based, and proactive. I was vocal about the need to address the root of the problems - Like getting people into real mfg jobs creating and installing solar panels and hydrogen-electric-propane vehicles… getting us off the oil and utility companies nipple, etc….

Retroacttive Tax Deductions - Stimulus Plan II

One suggestion I made at the Fed meeting was an idea to return the tax deduction for using credit - retroactively - for all those people teased into spending to keep the worlds economy humming? I heard Ben Bernanke today mention that he was in favor  of a second stimulus package.

Another Idea: Recall All Dollars - Before They Start The Printing!

Another Idea I blurted out (befoe they took the microphone away from me) was to recall all US paper currency and replace them with new certificates - this would have an immediate effect of temporarily flushing/wiping out the underground - unreported economy. Might as well create some new certificates as long as they are going to have to start printing a whole lot of them soon!

Technical Analysis - Dollar - Canadian Poised for a Triangle Break?

The US Dollar - Canadian - 4 Hour Chart shows a nice example of a Triangle pattern with a very strong supportive trend line and a well defined resistance line on top. The Fibonacci Retracements and Extensions are lining up with the Triangle Pattern’s potential projected price targets. 

Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN), He is a Mentor and Trading Coach to Select Clients  Click Here for a Free Self Evaluation Survey.