Matter of Money

$XAGUSD reached channel support. To me a screaming long! *All ideas presented here are my personal opinions and not investment advice. Take responsibility for your own risks!

Credit Agricole is in a consolidation in a downtrend on the weekly chart. The consolidation has already run quite far. I wouldn't touch this on the long side until the upper falling trend-line is broken. Zooming in to the daily chart reveals that the consolidation's up-trend has already been broken but price jumped back up last Friday and today to reclaim levels above the line. Overall, I would interpret this as indecisiveness on the daily chart. In a healthy downtrend, the broken trend-line should have acted as resistance to trigger a continuation to the downside. *All ideas presented here are my personal opinions and not investment advice. Take responsibility for your own risks!

$AUDUSD has been in a downtrend for several years now. Finally it looks like this trend can be broken which would give the pair a great base from which to trade higher in the coming months. This looks very bullish. I will trade this pair from the long side until the green trend-line is broken. *All ideas presented here are my personal opinions and not investment advice. Take responsibility for your own risks!

I recently answered a question on www.quora.com . The question was: What is the theory on which Technical Analysis is based? This is what I wrote: The assumption is that the psychology of market participants is a main driver of price moves. Technical analysis is a tool to visualize and measure market psychology. In this sense technical analysis does not actually predict anything, it just relates current price to price history and gives you an indication of market direction. Thus increasing your odds of a successful trade if the general market direction persists. Developments which change the fundamentals of a market and thereby the investor’s evaluation of price in relation to price history, will result in a re-calibration of market psychology. For example, a surprise rate increase/cut by a central bank can break down strong trend in the forex markets. Any feedback is welcome.

Deutsche Bank traded heavily into the close on Friday, with a strong rejection from a trend-line as seen on the daily chart. A 16% up day raises doubts over a sudden death of the banking giant. Be it political help or simply an end to bear speculation in the stock, who knows. But this is the kind of reaction that can trigger turnarounds. We will see if price can follow through next week. *All ideas presented here are my personal opinions and not investment advice. Take responsibility for your own risks!