Best Thread FXCM/DailyFX Signals and Strategies

The Yen pairs are selling off, and USD/JPY in particular is nearing a critical support level. Do you think we will see a bearish break?

Jason: could you plz explain this volume indicator you are using? Is it the retail vol going through FXCM?

DuCaan said:

Jason: could you plz explain this volume indicator you are using? Is it the retail vol going through FXCM?

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Yes DuCaan, this real volume indicator provides data exclusively from FXCM. To give you an idea of the proportion of total retail volume that represents, below is a table comparing FXCM's volume to that of other forex brokers. The numbers shown are in billions of dollars.


The stats above are from the Forex Magnates industry report for Q4 2011. I would post something more recent, but that's the last report that's available to non-subscribers. I hope the authors won't mind me revealing that their latest industry report for Q4 2013 reaffirms FXCM's top position.

EUR/USD Chart to Watch

Janet Yellen is on the wires causing some movement in the market. Here's a look at a 2 year EUR/USD trend line Jeremy Wagner of DailyFX has pointed out as a potential target level. It would also roughly line up with the post-ECB exhaustion low learn 1.35.


*Past performance is not indicative of future results.

We've seen a surge in GBP/USD volume today, reaching the highest level in 5 months.


*Past performance is not indicative of future results.

Looking at trader positioning according to SSI, we can see that short interest is surging as traders think we may have reached a top.



We're working on a directional volume indicator which will show you separate buy volume and sell volume to get a better sense of whether the surge in volume is on the buy or sell side. I'll let everyone know as soon as it is released.

EUR/USD is coming up to a major resistance level at 1.3500 which also represents the post-ECB low. That area had huge volume, in fact it was the highest volume day for EUR/USD of 2014. Here's the chart from David Rodriguez.

Risk assessment: Yen crosses are down on the day, S&P 500 is off over 1%, volatility readings have jumped and Treasury demand swelled

Considering the risk we're seeing in the market, a chart you should have on your radar is NZD/JPY. This chart from DailyFX Chief Strategist John Kicklighter shows NZD/JPY sitting heavy on a multi-year trendline / 100-day SMA. NZD/JPY also happens to have the highest carry of the Yen crosses.



Watch today's strategy video from John Kicklighter for a more in-depth look at the Yen crosses, and market volatility today in light of the situation in Ukraine.

[VIDEO]https://www.youtube.com/watch?v=50tN6EsIPZY[/VIDEO]

GBPJPY Update

DailyFX Analyst Michael Boutros is watching GBP/JPY and sees the 172.60/70 as a major inflection point between bullish and bearish sentiment. Here's an excerpt from the full analysis:



Watch today's strategy video from Michael for full details on his GBP/JPY analysis:

EUR/USD set a new yearly low after the US CPI inflation data release, but the pair has quickly bounced back to significant multi-year trendline support outlined in this chart from DailyFX trading instructor Jeremy Wagner:




And retail traders are adding to long positions in response. Here's a snapshot of EUR/USD SSI:

EURJPY Approaching 8-Month Lows, Sentiment Favors Shorts
Written by Rob Pasche, Forex Trading Instructor

Across the board, the Euro has been one of the weaker currencies in the past couple of months. This is especially true when paired with the Japanese Yen. The EURJPY cross is approaching levels that have not been seen in over 8 months, and it is not showing any sign of stopping. Today, we look at the case for EURJPY bears.

EURJPY Tumbles

Since the March high of 143.78, the EURJPY has fallen to a low of 136.58. A 5-percent decline in as many months, which is a substantial move with respect to currencies. As a trend trader, I am naturally drawn towards large moves like this, so the EURJPY has caught my eye.

The next major level that the EURJPY needs to breach to reinforce this downtrend is 136.23, the February low. If we see a daily closing price below 136.23, it could be an opportunity to short this pair. The chart below shows the EURJPY hovering precariously above this potential support level. 136.23 could act as major support like it did in the past, but a break would be significant.


While recent price moves led me to this pair, retail sentiment has added quite a bit of confirmation to a potential sell trade.

Sentiment Flips and Remains Positive

The story that sentiment is telling us about EURJPY is a compelling one. After almost all of 2013 featuring a negative SSI, 2014 has seen a significant shift to a positive SSI. The inverse relationship between SSI and price can be seen in the historical chart below.


During the long periods of negative SSI, we saw EURJPY moving up; but now that SSI has flipped into positive territory, price has started to move down. If SSI remains positive or becomes more positive, this adds fuel to the bears’ EURJPY fire. I expect SSI to continue to grow at least until EURJPY reaches 136.23. There are most likely many traders waiting to “call a bottom” on the EURJPY and will buy as it approaches this key price. It is only when that support level is broken that you will see the retail herd thinned out as their stops are hit.

A Profit Target Created Using Fibonacci Expansion

Just like every trade, our exit strategy will determine whether we make or lose money, and how much. So we need to figure out a profit target if and when this break occurs. I would normally turn to the most recent support or resistance level for guidance, but the last major support level beyond 136.23 appears around 131.00 (500+ pips away). I want to place a smaller target. So for this situation, it might be a good idea to use the Fibonacci Expansion.

The Fibonacci Expansion tool can be found at the top of FXCM’s Marketscope charts by clicking the drop down next to the Fibonacci Retracement tool button. When we draw the Fib Expansion between the December 2013 high, the February 2014 low, and the March 2014 high, we see the 100% expansion at 134.33.


This profit target would give us 150-180 pips of potential profit on a short EURJPY position opened after a confirmed break of 136.23. Using a 1:2 risk-reward ratio would place our stop anywhere between 75-90 pips. If you are not familiar with the concept of a risk-reward ratio, check out our free video course on Money Management which includes a free risk calculator download.

---Written by Rob Pasche

The RBNZ rate decision is being released today at 21:00 GMT, same time as daily rollover, so watch out for potentially exceptional volatility in the NZD pairs.

DailyFX Analyst Michael Boutros has a short term technical outlook for AUD/NZD you keep an eye on as we head into the rate decision.

GBP/USD is selling off with the pair crossing below the psychologically important 1.7000 level, and it is quickly approaching yearly trend line support levels.

Do you think this is a correction in the uptrend or the beginning of a bigger bearish move?

EUR/USD at Yearly Low

EUR/USD is trading near lows of the week and year!


And next week's economic calendar is filled with major events that could spark volatility including FOMC.

Here's the latest EUR/USD outlook from DailyFX Analyst David Song:

Monday's EUR/USD Reversal Range

EUR/USD has opened the trading week within a 30 pip trading range. Resistance, as marked above by the R3 camarilla pivot, resides at 1.3445. Support is currently held below at 1.3415 as marked by S3 support.


Range traders will look to take advantage of prices reversals inside of the range as the EURUSD drifts towards either of these pre-defined values. In the event of increasing volatility, the EURUSD could be exposed for a breakout scenario.


Utilizing camarilla pivots, a breakout would be signaled by price moving above R4 resistance at 1.3460 or below S4 support at 1.3400. Price action moving below 1.3400 would signal a short term move towards lower lows, and indicate a resumption of last week’s trend.


At this point the market would be signaling a change in market conditions and, range trading should be concluded. Traders can then consider entries with the markets new influenced direction.

More information about camarilla pivots is available at DailyFX.com

Is it a Good Time to Get Long the Dollar versus the Japanese Yen?

USD/JPY is finally breaking out to the upside but the Real Volume and Transactions indicators show the move occurring on low volume and trader interest.


The Commitments of Traders (COT) reports also show that professional positions have actually grown less long USD/JPY.


Therefore, it might be prudent for bullish traders to wait for further confirmation before buying in the form of increased volume to go along with rises in price.

New Zealand Dollar at Clear Risk of Further Losses

According to the Speculative Sentiment Index (SSI), a significant move in New Zealand Dollar positioning warns that the NZD may trade to further lows versus the US Dollar.


Retail traders are now their most net-long the Kiwi currency since it traded near $0.7500 in 2012, and extremely one-sided sentiment warns of continued declines.


A test of multi-month lows of $0.8400 seems likely, and a break lower makes a move towards year-to-date lows of $0.8100 plausible.

Absolute Zero said:

Do you find Camarilla as accurate as the traditional pivot point levels? I've used both in the past and found no better than 50/50 on either.

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Hi AZ,

The trade idea you mentioned was developed by DailyFX instructor Walker England: http://www.dailyfx.com/forex/educat...Add-Pivots-To-Your-Chart-in-3-Easy-Steps.html

He's a fan of Camarilla pivots. If you have any questions about his methodology, you can email him at [email protected] or send him a tweet @WEnglandFX.

Strategy Video: ECB and RBA Market Movers this Week

Past performance is not necessarily indicative of future results.

Gold Vulnerable If Ukrainian Concerns Fade

DailyFX analyst David de Ferranti says gold's resilience may be threatened if the latest flare-up in geopolitical tensions fails to sustain safe-haven buying for the precious metal. Sellers are likely to emerge at the 1,305 mark.


The emergence of a short-term downtrend for gold casts the immediate risk to the downside with a break of 1,280 (61.8% Fib) to open 1,258. A Piercing Line pattern near the nearby floor failed to find follow-through. This in turn casts doubt on the potential for a recovery.

British Pound Forecast Favors Continued Weakness

The Speculative Sentiment Index (SSI) shows that retail traders are near their most net-long the British Pound versus the US Dollar in over a year, and heavily one-sided sentiment leaves Quantitative Strategist David Rodriguez in favor of continued GBP/USD losses:


"The majority of traders turned net-long GBPUSD as it traded below $1.70, and this was especially significant given that traders had remained short since it crossed above $1.55.

Past performance is not necessarily indicative of future results.​

"There's no way to know whether this flip in positioning will lead a move of the same magnitude, and downside momentum seems stretched in the very short term. Yet remaining below $1.70 keeps our focus on trading towards key lows near $1.67."