Importance of the 200 SMA - forex binary trading signals

Importance of the 200 SMA ~ forex binary trading signals

EURUSD Technical Chart Analysis 

The 200 Simple Moving Average

The Euro

found resistance at the downward sloping 200 SMA (Simple Moving Average) and support at the daily S1 after market took out the stops and triggered the breakout limit orders below the recent low on the left side of the chart (blue line). After the Stop Run - Market Manipulation - got accomplished there was "nothing" to hold back the Euro from rising upwards. The resistance of the recent low (blue line) and the 20 SMA (purple line) got respected and broken with the beginning of the new hourly candle (Breakout Timing). For example market closed at the 20 SMA resistance with a strong candle and the EUR/USD broke through this resistance level with the beginning of the new hourly candle at 8 a.m. on the 1st October.

In general, the 200 SMA is often acting as support/ resistance and the 200 SMA shows the larger trend direction if the SMA, particularly when this Simple Moving Average is strongly sloping. Otherwise, the 200 SMA indicates a sideways range bounded market when the 200 SMA is more flat than sloping.

1 hour 200 SMA

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Ending diagonal pattern - forex gold trading signals free

Ending diagonal pattern ~ forex gold trading signals free

Fibonacci Chart Patterns

Fibonacci extension level

4 hour Fibonacci extension levels

On the 4 hour chart (left) we see that the 100 % fib extension from A-B at C and the weekly S2 provided support and the Euro returned sharply from this level.

The hourly chart below shows that the Euro formed an ending diagonal (wave C-D) after the termination of the impulsive A-B wave plus the succeeding correction wave up to point C.

The last wave of the ending diagonal (e) penetrated the weekly S2 and the 100 % fib extension (red line) (no confirmation) before the Euro turned around sharply and immediately moved up to the initial price target at point C-blue line (beginning of the ending diagonal).

1 hour Elliott wave theory, ending diagonal pattern

5 min Ending diagonal pattern

100 % fib extension

On the 5 min chart we see that the Euro moved up sharply after reaching the support zone at the 100 % fib extension (red line) and that market ignored all resistance levels in between to move directly to the initial price target (beginning of the diagonal). This price behaviour is typical after a pattern terminated, particularly an ending diagonal (directional move). In the following market found support at the 100 % fib extension of A-B at C and resistance at the 100 % fib extension of D-E at F plus the weekly S1.

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Butterfly pattern and price targets - barclays forex trading signals

Butterfly pattern and price targets ~ barclays forex trading signals

Butterfly Sell pattern

Weekly and Daily Pivot

The Euro

formed a butterfly sell pattern on the 5 min chart. The turn around at the 127 % butterfly sell target coincided with the 61.80 % fib retracement on the hourly chart and the weekly R1. We also see the importance of pivot points for example of the weekly and daily pivot and daily S1 and weekly R1.

Market initially moved down at 8 a.m. to find support at the weekly Pivot Point. From the weekly Pivot the Euro bounced up strongly, creating a small bull flag at around 8:45 a.m.and later the Butterfly sell pattern. 

The Butterfly pattern is a typical reversal chart pattern so that market typical retraces the preceding move after the failed breakout to the 127 % or 161 % Fibonacci extension level from the preceding Consolidation pattern at 10 a.m.. The Euro retraced back to the typical 161 % Butterfly price target, which also coincided with the 61.80 % Fibonacci retracement level of the recent swing up at around 1 p.m.at 1.29. 

The Euro consolidated above the 1.29 price level with the typical three swing consolidation before breaking temporarily through the 1.29 level (psychological level). Later in the US session the Euro has been in a choppy trading environment with the daily Pivot as the upper border and the 1.29 price level as the lower border.

5 min Butterfly Sell Pattern, Butterfly Price Target

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Flag Patterns Pivots and SMA - real time forex trading signals free

Flag Patterns Pivots and SMA ~ real time forex trading signals free

Chart Analysis of the Euro

Daily Pivot Point

1 hour Fib Extension

Price Zone of the Consolidation pattern

 Today in the Asian session EUR/USD went lower but market found support at the gap close from the trading day before at 1.2518 and the tight price zone of the consolidation pattern at this price level (Z).  The Euro moved up from this support price level (C) and penetrated the daily pivot point (1.2563) (D) but found resistance in the price zone of yesterdays consolidation pattern (B). Since then EUR/USD is trading lower.

5 min Euro us dollar chart analysis

Bull flag

 On the 5 min chart we see that yesterdays consolidation price zone at about 1.2540 (1) provided some resistance (2) before market went up further. The daily low from May 23 at 1.2545 (red line) still seems to have some impact (red circles). Market consolidated (3) (Bull flag) and closed (7 a.m. hourly candle) at the red line before market broke out of the bull flag initially at the beginning of the new hourly candle at 8 a.m.(breakout candle).

The breakout candle respected (closed at) the daily pivot point, consolidated there (4) and broke through it triggered by the increasing 10 SMA on the 5 min chart. However, the breakout of the following small bull flag (5) just above the pivot point only reached the 61.80 % fib extension (a-b at c) (rejection) and the Euro turned around. Market price respected and then moved below the 10 and 20 SMA on the 5 min chart.

The EUR/USD market traded in a tight 20 pip range between 11 a.m. and 1 p.m. capped by the 200 SMA before market created a typicalthree swing consolidation pattern (ABC), which also can be regarded as a bull flag from the previous swing down (hourly chart) (the first swing/ wave (A) in the consolidation terminated at the 61.80 % fib retracement; the second wave (B) at the 61.80 % Fib extension from the previous swing down at A).

After the three swing consolidation pattern terminated (C) market broke down strongly (high momentum) and market took out the previous lows, particularly the recent low from 25th of May at 1.2496 (blue line). Market only initially respected the support zone of the daily S1, low from 25th of May and the 100 % fib extension (4:35 p.m.) before the Euro moved down further to find some support at the daily S2 pivot, the hourly 100 % fib extension (A-C at D) and the 161 % fib extension on the 5 min chart.

10 and 20 SMA

During the strong move down (5 min SMAs were far away from price) the 10 and 20 SMAs on the 1 min chart (not shown) seem to become the trigger signals, e.g. at 4:41 p.m. (6), as long as the momentum stayed strong and market did not reject the decreasing SMAs on the lower time frame-1 min-.

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