Forex and Dow Jones recommended levels

EUR/USD
Today’s support: - 1.3613, 1. 3570 and 1.3546 (main), where correction is possible. Break would give 1.3518, where correction also may be. Then follows 1.3500. Break of the latter would result in 1.3486. If a strong impulse, we would see 1.3447. Continuation will give 1.3412. Today’s resistance: - 1.3726 (main). Break would give 1.37445, where a correction is possible. Then goes 1.3758. Break of the latter would lead to 1.3776. If a strong impulse, we’d see 1.3788. Continuation will give 1.3815.
USD/JPY Today’s support: - 81.87 (main). Break would bring 81.68, where correction is possible. Then 81.46, where a correction may also happen. Break of the latter will give 81.22. If a strong impulse, we would see 81.00. Continuation would give 82.41, 82.78, 83.16 and 83.39 (main), where a correction may happen. Break would bring 83.58, where also a correction may be. Then 83.70 If a strong impulse, we would see 83.82. Continuation will give 84.02.
DOW JONES INDEX

Today’s support: - 11920.40, 11881.36 and 11868.73 (main), where a delay and correction may happen. Break of the latter will give 11832.11, where correction also can be. Then follows 11790.00. Be there a strong impulse, we shall see 11767.50. Continuation will bring 11730.72. Today’s resistance: - 12026.28 and 12045.67 (main), where a delay and correction may happen. Break would bring 12069.30, where a correction may happen. Then follows 12098.42, where a delay and correction could also be. Be there a strong impulse, we’d see 12121.80. Continuation would bring   12147.38.

Forex, Fed Paper: Power of Technical Analysis in Forex is Declining

Being a practitioner of fundamental analysis, you could say that I’m always on the lookout for hard evidence that fundamental analysis is superior to technical analysis. Thus, I was delighted to discover a working paper (“Technical Analysis in the Foreign Exchange Market“) by the St. Louis Branch of the Federal Reserve Bank, released just this month. Alas, the paper barely touched upon fundamental analysis, but its conclusions on technical analysis in the currency markets were startling. In short, the effectiveness of technical analysis in the currency markets has declined steadily since the 1970s, such that only the most sophisticated/complicated strategies are currently profitable.
Rather than conduct original research, the report’s authors – Christopher J. Neely, an assistant vice president and economist at the Federal Reserve Bank of St. Louis, and Paul A. Weller, the John F. Murray Professor of Finance at the University of Iowa – performed a meta analysis of the existing research. They cited a litany of studies, covered a variety of topics, sometimes with contradictory conclusions. In order to ensure comprehensiveness, they looked at the profitability of numerous types of technical analysis indicators, across numerous currency pairs, over time, in different types of trading environments, and adjusted for risk.
All of the earlier studies, dating back to the 1960s, established the profitability of technical analysis, even when it was simplistic. Since then, however, most studies have shown steadily declining effectiveness: “TTRs [Technical Trading Rules] ere able to earn genuine risk-adjusted excess returns in foreign exchange markets at least from the mid-1970s until about 1990…and that rule profitability has been declining since the late 1980s.” The same trend has unfolded in the last decade, as traders have relied increasingly on computerized trading strategies: “Kozhan and Salmon (2010), using high frequency data, find that trading rules derived from a genetic algorithm were profitable in 2003 but that this was no longer true in 2008.”
Given that the two authors also concede that the financial markets are undoubtedly inefficient and that currency markets in particular are filled with observable trends, how should we understand this decline in the effectiveness of technical analysis? In one word, the answer is competition. “Profit opportunities will generally exist in financial markets but…learning and competition will gradually erode ["arbitrage away"] these opportunities as they become known.” In addition, there has been a “dramatic rise in the volume of algorithmic trading,” which has given rise to a so-called financial arms race to develop ever-more sophisticated trading strategies.
Indeed, the research shows that “more complex strategies will persist longer than simple ones. And as some strategies decline as they become less profitable, there will be a tendency for other strategies to appear in response to the changing market environment.” In addition, technical analysis that is used to trade exotic (i.e. less liquid) currencies is more likely to be profitable than major currencies, especially the US Dollar.
The report opens the door to further research, by indicating that “Technical trading can be consistently profitable in certain circumstances.” As if it wasn’t already clear, though, the vast majority of technical traders (perhaps all traders for that matter) are destined to be outmaneuvered and will ultimately lose money trading forex. Another way of looking at this, however, is that the the savviest traders – those that can spot complex trends and execute trading strategies quickly – still have a chance at earning consistent profits.
Source: http://www.forexblog.org/

Forex Trading Strategies for 2011

Forex is perhaps the best way to make oodles of money in the world currency market. Making money through Forex is much similar to making money through holding stocks. The strategies of the Forex market is highly in demand as more and more investors are plunging into the Forex investment market, shifting their bases from the stock and the bond market. If you’ve incurred credit card debts and you haven’t received a desirable result through debt settlement companies, make sure you try investing in the Forex market to earn money and utilize the proceeds in paying off debts.


No one can predict how the war of the currency will play themselves in 2011 but the investors playing with their luck by trading in the Forex market in 2011 need to keep their wits about them more than ever, this year. Though the elevated forex market volatility continues to imply on the major swings in the US dollar and other key pairs, yet there are some break out strategies that may be followed by the investors. Here are a bunch of some such successful strategies.

1. Learn the Forex scalping method: Forex scalping involves a process of fast opening and liquidation of currency positions. As the word ‘fast’ is relative, it refers to a time period of about maximum 3-5 minutes. The not-so-novice Forex scalpers maintain their currency positions for as less as one minute. Most Forex traders are of the opinion that as the Forex scalpers secure their positions for a less period of time than the regular traders, the time for market exposure is much shorter than that of a regular trader and hence they are much less exposed to the market risks. However, as a Forex beginner, you also need to be aware of the fact that the method of Forex scalping is not an efficient one for all types of traders. The scalpers do not prefer taking big risks as they are more willing to let go of greater opportunities in comparison to smaller gains.

2. Stay aware of the market cycles and currency trading: There is a direct proportional relation between the market cycles and the Forex currency trading system. The market cycle is nothing but the growth and contraction phases of the financial life. The market cycle is the primary thing that determines the economic trend and no trader can ever become successful without knowing the nature of the market cycles. As the supply of money is closely related to the value of the currency, the trend of the Forex market also responds to the movements of the currency market cycle.

3. How you can trade pegged currencies: If you’re an amateur investor in the Forex market, you also need to know about the pegged currency. A pegged currency is one where the value of the currency is matched to that of another asset. That asset may be a single currency or even a basket of currencies. The fixed trading rate of the currencies will be valued by the central banks and will be maintained throughout in order to preserve the economic stability. The simplicity and clarity of the fixed exchange rate system is the biggest benefit of pegged currency trading.

You can soon become a confident Forex trader by following the breakout strategies discussed above. Try identifying high profitability trading set ups so that you can make the most out of your Forex trading skills and earn an overwhelmingly large amount of easy cash. The string of profits will boost your confidence and enable you to maintain a good winning percentage.

Source: http://www.forexmachines.com/