USDMYR moving lower

This week the main Malaysian economic was better than expected GDP data.GDP for the fourth quarter came in at 4.5%, higher than market expectations of a 3.2% increase, while the economy contracted 1.7% for the full year, less than the average 2% in a survey.

As a result most economists revised their 2010 economic growth projection upward to around 4-5-4.8%. Some economist a bit cautious since they expect a slowdown in the second half on higher interest rates and as public-sector spending was reined in to balance the deficit.

Boasting the economy through public spending will invited the Greek fiscal fiasco.

Economist mostly concurred that a 25-basis point hike to 2.25% in Bank Negara’s overnight policy rate next week after the monetary policy committee meets.

The favorable economic news has no bearing on the ringgit since the currency seem to follow the other regional currency excluding the yen.

USDMYR was moving at tight range and the pair is now consolidating in a triangle with support at RM3.3830 and resistance 3.4217.

The MACD is now tagging the zero line and the blue lag has gone below the 45 level with red lag at the top. The 200 EMA and 60 EMA is almost flat.

The peak at candlestick formation of evening star doji with a high of 3.4146 was lower than the previous peak. If USDMYR gone pass the previous low of 3.3880, the move will be a continuation downward

EURJPY rebounded from 119.60 to 121.60

My trading time start around 6:00 GMT(one hour before Frankfurt open) to about one hour after London Open(9:00 GMT). With that time frame my trade objective is to earn 50-60 pips per day.

I trade on 1 MTF chart using a 5 MTF chart signal for entry and exist reference with 30 MTF chart as guidance for long term trend.

I only trade EURJPY since it fits my personality with its intraday price range move is within my profit objective. As EURJPY is actively traded in Asia and Europe, my analysis will take into account price and news that happened during the previous day especially during Europe/New York session and current early Asian session.

Let see the 30 MTF chart for 24th, 25th and 26th February.

24 Feb

Yesterday risk aversion moves caused EURJPY to trend downward. Based on the previous days price activities, after price substantial move, price will consolidate. Therefore today we expect a consolidation. On MACD and lag indicator, at my trading hour market is overbought but made no effort to move away from a tight range moved experience since late New York session.

25 Feb

The technical and fundamental signs showed that EURJPY fall further. Standard & Poor's on Wednesday maintained Greece's BBB+ long-term and A-2 short-term sovereign credit ratings but warned that a ratings cut, of one to two notches, is possible within a month. That underscored that the situation has stabilized but with possibility of downgrading if they don't follow through on the austerity measures. A one-day strike by major Greek unions yesterday in protest of the government's tough plans to slash the deficit add a new pressure on the euro.

EURJPY fall from 122.60 to around 120.20. MACD and lag is at overbought position at 6:00 GMT.

26 Feb

During New York session yesterday, the Japanese yen pared some gains as US stocks rebounded in late session overnight on comments from St. Louis Fed James Bullard that the U.S. economic recovery is "reasonably good." Yen continued the retreat as Asia stocks recover. The EURJPY retrace 61.8% of the previous moves.

At my trading hour, EURJPY is at overbought position and expectation of consolidation my the week closing.

One thing to note is that Euro has been relatively resilient and was holding against dollar.

EURJPY started at around 125.20 in early of the week, fall to about 121.50 by the middle of the week and then fall to the week low at 119.60 on Thursday. By Friday EURJPY, risk appetite sentiment was seen as EURJPY recovered at around 121.60.

The Greek financial tragedy was the motivator for risk aversion in first three days of the week with a rebounded in US stock market contributed to risk aversion in the last day of the week.

Profit taking at 125.20

Profit taking of EURJPY pair was clearly evidence since early of the week. EURJPY was on the uptrend since early last week that ended with a high of 125.22 at early hour of Tokyo opening session. Profit taking pushed EURJPY to Monday intraday low of 123.63 at noon New York session.

Consolidation of EURJPY continued to late Asian session on Tuesday with a temporary strong upward reaction during the early European session.

For my scalping trade, let us run through the 5 MTF for Monday(22^nd Feb) and Tuesday(23^rd Feb).

Monday:

At point A, EURJPY look overbought since the blue lag has moved passed 85 and hovering above 45 and turning downward. Red lag has crossed 45 but showing sign of turning downward. MACD-the signal line and the MACD line is at the zero line for almost 3 hours indicating consolidation and waiting for a breakout. Breakout occurred after price break the lower support line of the triangle .

The downtrend is stop at Pivot Point mid-level with a reversal piercing line candle formation. Price reacted upward point C with resistance of the moving average and Tokyo opening price. The downtrend is now confirmed with target at point D with support of Pivot Point and 1.618 fibo expansion.

Tuesday.

Morning Asian session was flat. Late asian session, a triangle was formed. At point A a sell entry was initiated as EURJPY was at overbought position with the blue lag has moved passed the 85 and the red lag was starting to edge downward. MACD signal line has crossed the MACD line and moving toward the zero line.

EURJPY make a false break of the triangle with a reversal at B with a hammer candlestick. The pivot mid point also act as support. Price expected to move to the Pivot point (point D) and then the 1.618 fibo extension.

The Year of a Tiger

Chinese New Year was celebrated on Feb. 14, and 2010 will be the Year of the Tiger. According to the Chinese zodiac, it is a year traditionally associated with drama,massive changes, travels and volatility. Unfortunately, world conflicts and disasters tend to feature during Tiger years also, so it won’t be a dull 12 months for anyone.

CLSA Asia-Pacific Markets (‘CLSA’) a leading independent brokerage and investment group in Asia and a wholly-owned subsidiary of Credit Lyonnais S.A published its annual Feng Shui Index report to see what the Tiger holds for equities, commodities and property. It may come as no surprise that the year of the golden tiger has its sights set on the precious metal itself. CLSA predicts 2010 to be a year for gold, forecasting the price of the yellow metal to break US$2,000/oz.

According to the CLSA Feng Shui Index the first three months of the year of tiger is as follows:

1. Wood Tiger (Feb 14-March 15): The index is up and sentiment is good for market. Money flow from South West

2.Wood Rabbit (March 16-April 13): The index is down with bumpy(volatile) market sentiment. Money flow from the East.(Note: March 21st-vernal equinox)

3.Earth Dragon (April 14-May 13): Index continue to fall. Bumpy market with money coming from South East(May 7th is an inauspicious date)

From forex trading perspective, I would like to see the index forecasting for the stock market and subsequently the market coloration with forex in this case the US Dollar and Japanese Yen.

Ringgit Strength

The European Club Med countries’ debts issues and Chinese government rein on credits last week extended the current atmosphere of risk aversion, which boosted the US Dollar and Yen. This week, the Fed raising the discount rates from 50 to 75 bps which imply of loosening monetary policy in US boosted the US Dollar.

The Ringgit against the US Dollar was not affected by the risk aversion sentiment of last week, but this week Fed moved has a slight reaction on the USDMYR.

The MYR has been moving downward within the downtrend line, from a high of 3.4541 to a low on 17^th February at 3.3830. USDMYR was supported at 50 % retracement of swing low at 3.3276 to swing high at 3.4541.

From the support, it reacted upward and met resistance of the downtrend line and 60 EMA at 3.4217 .A doji and then a bearish harami candles were formed.

Given that the blue lag has crossed the 85 level from above and the BB Macd dots were tagging the top blue line and testing the zero line, USDMYR is expected to drift downward testing support at 3.830 tis coming week.

Club Med countries rescue plan motivate EURJPY

The yen dropped versus the euro and the dollar on Tuesday as speculation mounted about a possible rescue of Greece and other heavily indebted southern European countries. The dollar and yen tend to remain closely tied to investors' appetite for risky assets and swings in equity markets, with the yen tending to lose more often when investors snap up stocks, commodities and other assets perceived as risky.

The euro extended gains in midday trading as various media reports pointed to German officials working on a rescue package for Greece. The plan may include loan guarantees for Greece and other deficit-laden countries, according to The Wall Street Journal.

Earlier during Asian sesion,news that European Central Bank President Jean-Claude Trichet planned to fly back from Australia earlier than scheduled to attend a Thursday meeting of European Union leaders may be working toward some sort of plan to shore up debt-burdened countries.

EURJPY was on the uptrend since Asian opening with a reaction on early New York session that found support at 61.8 retracement. It moved from 122.00 to 124.00 by the end of Tuesday session.

EURJPY breaking out from 122.00

On 5 MTF, EURJPY was bouncing around 122.00 level before it went trending up. As EURJPY moving toward the one hour before Frankfurt open time frame it penetrate 122.50 and pivot R1. It consolidated at that level or at point A, forming a possible double top with penetration of the uptrend line. With price found support at 23.6% retracement and blue lag reversing upward, the double top was a failed pattern. After price breakout the previous high, the uptrend since Asian open was continued.

My entry is on the 1 MTF. The first entry at 1^st vertical line with a sell. Exit at point 1 on support of 200 EMA and blue lag tagging the bottom.

Second entry for a buy at 2^nd vertical line. Exit at point 2 when both lag tagging the top and resistance of mid-level pivot. After the exit, the blue lag cross the 85 from above, but no action taken as the overall trend was still trending upward.

EURJPY found support at 38.2% retracement and subsequently the lag reversing at below 15. Make a buy entry at the 3^rd v ertical line with exit at point 3 where price touch 123.00.

Support at 122.00, Resistance at 122.50

Forex markets are consolidating within a tight range on Monday. It seem that risk aversion sentiment which was in full force last week due to the fears of a sovereign default in the Club Med countries of southern Europe has calm down a bit.

EURJPY was bouncing above the Tokyo open and the 122.00 level for the whole day with the 60 EMA and 122.50 level capping any upward moved (30 MTF chart).

Breaking up the 122.00 level

On the 5 MTF, EURJPY touched the upper line of ascending channel with the blue lag tagging the 45 level and red lag tagging the top. An overbought position.

Sell position was set at 7:05 and referring to 1 MTF for entry. The sell entry at 7:06 (the fist vertical line). Profit target around point 1 (on 5 MTF).

Then a buy entry made on 1 MTF after EURJPY penetrate the descending trend-line at 8:02. Signal on 5 MTF was the engulfing candles with lag at bottom.

Profit target at three different levels, first at pivot point and also 122.00 level. Second`at Asian high and third at 122.50

EURJPY bouncing against 126.00

Februaru 3

EURJPY was on the downtrend since Tokyo open. The downtrend ended at 126.00 level. Then EURJPY fade out from that level to be up-trending within an ascending channel. (refer to 5 MTF chart).

The uptrend end at point 1, which is about few pips from 126.50 level. A double top and EURJPY testing the lower channel line at point 2. At point 3, EURJPY failed to penetrate Tokyo opening price. That confirmed the downward moved of EURJPY>

The downtrend is being capped at 126.00.

On the 1 MTF chart, my entry is at the yellow vertical lines with exit at point B,C,D,E, F and G.

At point A which is point 1 on the 1 MTF, the price is at overbought with the both lag clued to the topmost level. First entry at 7:04 was made on BB Macd moving downward with prices closed below a doji and two consecutives close below the 5 SMA.