Double Bottom Forming on the GBP/CHF

Price action on the GBP/CHF has been wild to say the least recently. The trading has certainly been erratic from a pricing perspective, and we believe that this volatility is set to continue. However, over the past few months, if you've been following the 4 Hourly charts, there seems to have been a double bottom pattern forming which is relatively strong.
The first spike low of the double bottom comes in at 1.5365. This is the candle low of a single four hourly bar. Following this bar, the currency pair put in a solid performance and rallied all the way up to 1.6000 – a strong psychological level.
However, since reaching that level last week, the GBP/CHF has sold off once more, to the point where it is now approaching the low once again. Could this be a double bottom forming in action? We believe that given the strengths of both the GBP and the CHF, there is a high likelihood that indeed the currency will once again reverse and head higher.
There are a number of things which are pointing towards this being the likely outcome. Firstly, the %R indicator, which is almost always a reliable oscillator to use on this currency pair – is oversold. This indicates that the currency pair could indeed be in for a correction in the near term. However, whilst this is certainly a convincing factor, it is definitely not the only thing which is leading us to believe that a trend reversal is about to occur.
Over the past 2 years, double bottoms have formed on almost every currency pair out there. They are simply a fact of technical analysis and they are a very reliable measurement of future price action.
However, if you look at double bottoms from a statistical perspective, you will see that if you had been trading the double bottoms which formed on the GBP/CHF currency pair, you would have had the most success. That's right – when it comes to double bottom chart set ups, the GBP/CHF is definitely the most accurate currency pair to base your trades off.
So – where are we targeting for this currency pair trade in the near future? We believe that in the short term, a bounce up to 1.5700 could definitely be on the cards. If this point is reached, we believe that – depending on momentum – the price could return all the way to the 1.600 high that was set last week, and potentially surpass this also.
To curb risk, we have placed a stop loss order below the first spike low at 1.5320 – which should provide enough space to allow for any "false" breakouts to occur, without it affecting our double bottom prediction.

Euro Sovereign Debt is Still Attractive

Earlier this year, if you asked anyone whether or not they would actively and happily hold on to Eurozone sovereign debt for the long run, the answer would probably have been a laugh and a strong "no". Having just been through a moderate sovereign debt crisis in countries such as Greece and Spain (and these issues are of course continuing) – it would be fairly naïve to predict that people would be overly happy to hold Euro sovereign debt for the long term – right?
Wrong. Apparently, Eurozone debt is just as attractive as it has ever been, only that now investors are being hugely rewarded for holding it. Credit default swap spreads have widened over the past few months to levels similar to those when the debt crises started for these countries, but there is a significant difference this time around.
The difference is that investors do not fear a default by any of the countries involved! In fact, a recent survey of investors found that sovereign debt trading is actually more reliable than currency trading in the current market environment.
This is a big turnaround from January and February of this year. In fact, the turnaround in attitude is almost inconceivable.
So what about the ratings agencies? Don't they have a say in all of this? Yes – of course they do, and their reaction to the whole situation has simply been to downgrade Eurozone sovereign debt over and over again. But investors are slightly cleverer than to simply take the credit rating agencies for their word. They know that whilst a credit rating for an individual country might be bad, the Eurozone is not just comprised of a single country.
Indeed, as we saw in the case of the Greece situation, Germany played a huge – and arguably dutiful – role in rescuing the country. If the Germans hadn't have come to the party, the entire Eurozone would have felt the fallout of the debt crisis.
Therefore, it would appear that whilst the German support for Greece (and Spain) has come and gone, investors believe that the country will still be there to provide financial support for any other Eurozone members who inadvertently fall in to trouble in the coming months. If Greece was able to get a multi-billion EUR bailout, there is absolutely no reason why a similar package couldn't be given to other Eurozone countries.
And therein lays the reason why Eurozone debt is attractive. Whilst not written on paper, Germany has a pact with all member countries that it will not allow them to default. The German insurance policy therefore allows investors to profit from amazing interest rates in some Eurozone member nations, whilst being supported by the main player – Germany – should anything go wrong along the line.

Japanese Yen Waivers on Rumours of Further Intervention

The Japanese Yen was trading significantly lower at the end of last week, as rumours surfaced of further intervention in the USD/JPY currency pair at the end of the week. It was speculated that the Japanese Foreign Ministry was delving in to the currency markets, apparently continuing the intervention that we have seen over the last few weeks.
Whether it is true or not, the rumour itself certainly had a tangible effect on the market, and the Yen was sent lower to close the week approximately unchanged from the open on Monday.
Our belief is that indeed the Foreign Ministry did push a few buttons and attempt to buy the USD throughout the end of the week, albeit in smaller amounts than the past. You will all remember not too many weeks ago when the Japanese central bank came to the party and bought a huge number of USD – which sent the USD/JPY skyrocketing around 300 pips or so.
The same movement seems to have taken place in the EUR/JPY currency pair also. The Yen traded at 112.95 at the end of the week versus the EUR, which was down almost 100 pips from the starting level at the beginning of the week – at 113.75.
Regardless of whether the Japanese Foreign Ministry did intervene or not, it is certainly clear from this recent fall that investors are nervous as to the future of the currency.
The large gains that the Yen has made over the past few months seem to be coming to an end, and the momentum is definitely dying out. However, it is unclear as yet whether or not the definite low has been reached in the USD/JPY pair. As we always say – the market has its own mind, so it wouldn't be at all surprising if having just said that, the market returns to form a new low in the next month or so. If this happens however, it could be rather short lived.
What is clear in this situation however is that the Japanese Foreign Ministry is keeping a close eye on the currency markets, and will no doubt trade more Yen and USD's should the need arise.

Forex Fundamental Indicators

A lot of attention, among Forex traders, is always drawn to the technical analysis side of Forex trading, and as a result Forex fundamental indicators are often left to the wayside. This is an oversight that could be dangerous to any Forex trader's success. The Forex fundamental indicators are just as important as any support and resistance line, because if the news changes, it doesn't matter what your chart says; the market is going to react. So many indicators If you think there are too many things to pay attention to when it comes to your technical analysis and charting, you'll be amazed at the possibilities of Forex fundamental indicators. Right off the bat you can include, macroeconomic, monetary, economical, financial, weather-based news, and so on and so forth. If you paid attention to all these indicators you wouldn't have any time left to trade. Something new is coming out all the time. There is always a new report, but the problem is that hardly any of all this news will have any impact on the Forex market. It's difficult to decide what is important and what can be ignored. The important ones There are a few reports that should not be ignored. These are the main Forex fundamental indicators that can keep your trading in order. The first one being the GDP for the country. The Gross Domestic Product report is the main indicator of the macroeconomic state of any particular country. The report comes out according to a schedule so you don't have to keep checking the news for it. The volatility in the market of the particular pair increases a great deal when these reports come out. Some traders actually choose to close their positions during this time period. You don't want to get caught wrong in these situations. Interest rates are set by the central banks. These Forex fundamental indicators can prove to be more interesting because the banks can choose to change the interest rates at an undisclosed time. When this happens, the Forex market reacts immediately. It's important to monitor the interest rates to be able to predict the long term results of any Forex pair. Unemployment rates are the third set of numbers the Forex trader should pay attention to. These numbers directly affect the interest rates which directly affect the Forex market. These figures usually come out weekly and they are strong Forex fundamental indicators that should always be noted. Stay informed A well balanced Forex trader will have a much better rate of success than one who is strictly a technical trader or strictly uses Forex fundamental indicators. It's a combination of both that will keep you ahead of the game. The news, when breaking, will ignore the technical analysis. On the same note, sometimes news will break out, but that support or resistance line will hold as if there was no news at all. The key is not to let yourself fall prey to any unnecessary surprises. There will be enough. To stay on top of Forex fundamental indicators is to put one more weapon to work for your Forex trading.

A Powerful Binary Option Trading Strategy

By: Hillel Fuld
We all want to make money, I think most of us can agree about that. The problem is that today’s culture of instant gratification, which is magnified with the Web and social media, people do not have the patience they require to make serious money. Binary trading is no different, if you want to make profits, you need a binary options strategy.

So, now, if you have ever trading binary options, you must be thinking, how can such a simple industry require a strategy and what is a binary options strategy anyway? Good question.

The truth is, binary trading is different than other markets such as Forex in many ways, but when it comes to a binary options strategy, you can look to Forex for some guidance.

The basic principles that make up a good Forex strategy can and should also be applied to a binary options strategy. Here are a few examples:

- Risk VS Reward: When trading binary options, you need to decide how much capital you are able to risk losing. If you need that money to feed your family, as strong as the craving is to try and double it, it is not the kind of thing you want to do. You need to sit down and figure out what you can afford to lose and use that money to trade binary options. That is 101 of a binary options strategy.

- Demo: Just like in Forex, practice makes perfect. You need to familiarize yourself with the binary trading platform and then jump in with real money.

- No Emotion: You need to constantly fight the urge to overcompensate for losses or ride the wave of success for too long when trading binary options. This is an underlying principle for any binary options strategy.

- Limits: Know your limits and do not pass them even by a little margin. Once you let yourself go, it is a slippery slope. Define your boundaries and stick to them no matter what.

- Getting out: Lastly, binary trading just like Forex is not for everyone and every day is not going to be your best day. If you see yourself falling, get out while you still can. Tomorrow is another day and you should always reserve the option to reach the truthful and sometimes painful conclusion that binary options trading is not for you. That is also part of a binary options strategy.

Economic Calendar 2010

The Forex market is not traded on technical analysis alone. The economic calendar 2010 is as important to a Forex trader's daily strategy as any support or resistance line. Although your charts will tell you where to buy and sell any particular Forex pair, these points naturally assume the market is working in a vacuum. In other words, as long as nothing on the outside happens, the support and resistance lines; or the trading range; or even the wave; is legitimate.
The Forex market does not trade in a vacuum. There are hundreds of factors a day that will have an affect which way the market is going to turn. The economic calendar 2010 is a necessary to have on your computer to predict the unpredictable.
Reports for everything
If you take a look at the economic calendar 2010, it will look like you won't have time to trade. You'll only be spending all day, every day, waiting for yet another report to come out. To spend any amount of time concentrating or anticipating the Industrial Orders report in Denmark might not be the best use of your time. The Imports and Exports report in Japan might not interest the Forex trader if he is only trading the EUR/USD pair. The point is, that it's on the calendar; and it's on there with the reports the Forex trader wants to be aware of.
Even though the plethora of reports contained in the economic calendar 2010 may seem like information overload, it can also spark some interest in some trading pairs not otherwise considered. There's nothing wrong with expanding your horizons and seeing when major reports come out in other countries. Even those reports might have some indirect effect on the trading of the pairs in which you're involved.
Search for relevance
The nice thing about having and using an economic calendar 2010 is that you can plan your trading around either using, or avoiding, the time that a major report is coming out. There are certain reports that you can't predict and won't be on the calendar. If a country decides suddenly to change its interest rates, there's nothing any Forex trader can do about that. When something like that happens the market is going to react and that is the reason every Forex trader uses a stop-loss. Of course there will be the occasional time you get caught on the right side of the market and you find yourself riding an unexpected profit. Be happy about that. It doesn't happen often.
Major reports in the United States pretty much affect everything worldwide. These should always be noted. It is a major reason to have and economic calendar 2010 handy. Something like the Jobless Claims report can have an impact on the interest rate of the dollar, which indirectly affects every other country. It is always something to watch. Reports of GDP for any country in any Forex pair you might be trading should be watched.
What to do
There are a couple tactics that can be used when dealing with reports available on any economic calendar 2010. The first thing a Forex trader might consider is staying out of the market when the report comes out. Wait for the market to react and not predict how the market will react. It is certainly a safer way to go.
Another way is to try to jump the gun and keep a close stop-loss. Any Forex trader must remember that once the report has come out, the results are already in the market. The huge financial institutions and banks don't like to be surprised. They know about the report and what is in it before you ever will. In either case, the economic calendar 2010 will always give you a heads-up.