What will happen? FOMC press conference is among the primary methods the Fed uses to communicate with investors regarding monetary policy…
Moving Averages in Forex today
2021-05-21 • Updated
MAs often serve as important support and resistance markers. How should traders use that? Let's see it in a couple of brief examples below.
In the H1 chart below, 200-MA serves as a support area for EUR/JPY which is testing it at 132.60. As you can see, the support at this level was formed by the previous lows on May 17 and 19, but now, it is reinforced by the presence of the 200-MA. How to trade that?
Primarily, 200-MA is an important psychological level here. Even without the corresponding previous lows on the chart, the 200-MA alone would be an important challenge for bears. Also, the 200-MA is a long-term MA, and normally, the more long-term the MAs, the more is its "power".
Therefore, first, traders should prepare for a likely scenario in which the 200-MA sends the price back into the upside. On the other hand, given the importance of the support of the 200-MA at 132.60, it's like a last stand of the well-guarded downside. If the 200-MA is crossed downwards, bears will then have the entire space below to drag the price pretty much where they please. In our case, it would be 132.00.
If MA is decisively crossed, the trend that pushed through may gain more power.
Careful with false breakouts - wait for the price to confirm the breakthrough!
Second most commond case is when an MA send the price into an opposite direction it was going in before. In other words, the price bounces from an MA.
On the H1 chart below, NZD/USD is on the rise. As you can see, it's challenging the resistance of the 200-MA and 100-MA at 0.7210 as it already crossed an important psychological resistnace of 0.72. Very likely, we are observing a peak of an upswing and a start of a new downtrend formation.
Therefore, if you spot reversal candlestick formations on other timeframes as well - the MAs are sending the price back downwards.
The US broad-market index, S&P 500, has been pressed below the 50-day moving average for the first time since March! Why?
Bitcoin At the end of the past week, Bitcoin broke through the big resistance level of $50 400 and reached $51 500 after the worse-than-expected US labor data…
Walmart is one of the biggest retail corporations in the US, with $244 billion in total assets. Does it worth buying amid rising prices and supply concerns that shatter the world economy?
Japan's inflation is set to reach 2% in April's reading, for the first time since 2015. But what about the weaker Yen?!
Last week brought a selloff in markets. Some assets reached the most crucial support levels and are likely to reverse in a short term. Be ahead of trends and make the most out of this week!