EUR/USD Weekly Forecast (11th January 2021 – 15th January 2021)

Fundamental view:

The EUR/USD pair kick-started 2021 reaching a fresh multi-year high, as optimism continued to undermine the greenback. The dollar got to recover some ground ahead of the weekly close, but retains its intrinsic long-term weakness, as it latest advance seems a mere correction. Coronavirus immunization through different approved vaccines has seen a bumpy start in December, but it’s in progress. According to Bloomberg, which collects data from governmental sources, over 17.5 million doses have been applied globally, 6.25 million just in the US. 

In the past week, Europe Markit Manufacturing PMI & Europe Markit Manufacturing PMI on 4th January and  Europe Consumer Confidence on 5th January created bullish trend and Unemployment Rate on 5th January and  Europe Consumer Price Expectations on 7th January created bearish trend for the pair.

The major economic events deciding the movement of the pair in the next week are US JOLTS Job Openings at Jan 12, Europe Industrial Production monthly report, US CPI monthly report at Jan 13, US Initial Jobless Claims, ECB Monetary Policy Meeting Accounts, Fed Chair Powell Speaks at Jan 14, and US Retail Sales monthly report at Jan 15.

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 0.32% higher than the previous week. Maintaining high at 1.2349 and low at 1.2193 showed a movement of 156 pips.

In the upcoming week we expect EUR/USD to show a bearish trend. The currency pair is trading below the 100 Simple Moving Average and the MACD trades to the downside. A solid breakout below 1.2156 may open a clean path towards 1.2096 and may take a way down to 1.2000. Should 1.2311 prove to be unreliable resistance, the EURUSD may raise upwards 1.2408 and 1.2467 respectively. Chart formation of a descending triangle breakout in H4 chart frames prospects for a bearish trend. Bearish engulfing formation in H4 chart escalates the expectation for a bearish trend.

Preference
Sell: 1.2220 target at 1.2097 and stop loss at 1.2316

 

Alternate Scenario
Buy:  1.2316 target at 1.2466 and stop loss at 1.2220

BTC/USD Weekly Forecast (11th January 2021 – 15th January 2021)

Fundamental view:

Bitcoin rallied in the past week. The year 2020 was perhaps the best for Bitcoin ever, not only because of the price action but also for the massive increase in institutional interest. Currently, Bitcoin market capitalization is $382 billion after the digital asset hit $20,700 for the first time ever. During 2020, Bitcoin has received support from many prominent payment platforms, most notably PayPal. Even some of the oldest Bitcoin haters out there have changed their stances about the digital asset in the past year as worldwide adoption seems practically inevitable at this point. 

The major economic events deciding the movement of the pair in the next week are JOLTS Job Openings at Jan 12, EIA Crude Oil Stocks Change, CPI monthly report at Jan 13, Initial Jobless Claims, Fed Chair Powell Speaks at Jan 14, and Retail Sales monthly report at Jan 15 for US.

BTC/USD Weekly outlook:

Technical View:

Last week’s high was 17.26% higher than the previous week. Maintaining high at 41978.1 and low at 34731.5 showed a movement of 14097 pips.

In the upcoming week we expect BTC/USD to show a bullish trend. The Instrument is trading above the 200 Simple Moving Average and the MACD trades to the upside. A solid breakout above 45521.2 may open a clean path towards 50798.4 and may take a way up to 50798.4. Should 31423.7 prove to be unreliable support, the BTCUSD may sink downwards 22603.4 and 17326.2 respectively. In H4 chart symmetrical Triangle breakout favors prospects of a bullish trend. Bullish harami pattern constructs a bullish outlook for the pair in the upcoming week.

Preference
Buy: 39810.6 target at 50797.4 and stop loss at 31417.3

 

Alternate Scenario
Sell: 31417.3 target at 22604.8 and stop loss at 39810.6

AUD/USD Weekly Forecast (11th January 2021 – 15th January 2021)

Fundamental view:

In the last week, The aussie just went with the flow these days, boosted by rallying equities and persistent hopes among speculative interest, which believes that the economic chaos triggered by the coronavirus pandemic is on its final stages. On the other hand, the greenback remained pressured by a combination of factors such as political turmoil in the US and a steeper than anticipated economic setback at the end of the year amid resurgent COVID-19 cases.

In the last week, Australia Commonwealth Bank Manufacturing on 4th January and Australia Commonwealth Bank Services PMI on 6th January created bearish trend for the pair whereas US Markit Services PMI & EIA Heating Oil Stocks Change on 6th January and US Trade Balance on 7th January created bullish trend for the pair.              

The major economic events deciding the movement of the pair in the next week are Australia Retail Sales monthly report at Jan 11,US JOLTS Job Openings at Jan 12, US CPI monthly report at Jan 13, US Initial Jobless Claims, Fed Chair Powell Speaks at Jan 14, Australia Home Loans monthly report, and US Retail Sales monthly report at Jan 15.

AUD/USD Weekly outlook:

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 1.00% higher than the previous week. Maintaining high at 0.7820 and low at 0.7643 showed a movement of 177 pips.

In the upcoming week we expect AUD/USD to show a bearish trend.  The currency pair is trading above the 200 Simple Moving Average and the MACD trades to the downside. A solid breakout below 0.7658 may open a clean path towards 0.7562 and may take a way down to 0.7480. Should 0.7836 prove to be unreliable resistance, the AUDUSD may raise upwards 0.7917 and 0.8013 respectively. In H4 chart rising wedge pattern breakout favors prospects of a bearish trend. Also to be noted bearish engulfing formation exerts the expectation of downtrend for the pair.

Preference
Sell: 0.7743 target at 0.7563 and stop loss at 0.7841

 

Alternate Scenario
Buy:  0.7841 target at 0.8012 and stop loss at 0.7743

Day Trading Strategies for a Short – Term Trader

Day trading can be a home-based business and it does not require any major infrastructure. There are no special skills required and there are no tests that need to be passed. A lot of the risks of making large losses can be avoided if you are not holding your trades overnight or when away from your trading charts. Day traders may also enter and exit multiple trades during a day trading session. You do however need a strategy and a solid level of knowledge if you want to be successful. A major reason a lot of traders look at day trading is because the market can fall overnight.

Day traders use high amounts of leverage using trading strategies to capitalize on small price movements in highly liquid stocks or currencies. This means that even small movements in price can lead to big wins (and losses). In day trading, you close your trade before the markets close to avoid a lot of the headaches. Another major benefit is the amount of trading opportunities you get. Because you are day trading you will be trading on smaller time frames. This will give you more trades and more chances to make potential profitable trades.

We have summed up some successful trading strategies for your trades to be successful in short term or Day trading. Now, we are going to investigate the most widespread forex Day trading strategies.

 

  • Scalping Day Trading Strategy

 

Scalping is a day trading strategy that aims to achieve many small profits based on minimal price changes. As a scalper volatility is your friend. The more volatile the markets are, the more price is moving and the more trades you can find to potentially make more profits. When using scalping strategies you are trading in a similar way to other day trading strategies. You are looking to get in and out before the market closes or before you finish your trading session. A scalper simply can’t afford to wait for the market to come back.

Scalpers aim for a large quantity of trades, opening almost ‘on a hunch’, because there is no other way to navigate through the market noise. Scalping can be exciting and at the same time very risky. Scalpers must achieve high trading probability to balance out the low risk to reward ratio. Probably the hardest part of scalping is closing losing trades in time.

If you want to be a scalper, consider developing a sixth market sense – look for volatile instruments, good liquidity, and perfect execution speed. If mastered, scalping is potentially the most profitable strategy in any financial market. It is only the associated risks that prevent it from being the best day trading strategy.

 

  • Price Action Strategy

 

There is also a strategy for part-time traders who pop in and out of work (10 minutes at a time). These brief but frequent trading periods may lend themselves to implementing a price action trading strategy. Price action trading means analyzing the technical or charts of the currency pair to inform trades. Traders can analyze up bars (a bar that has a higher high or higher low than the previous bar) and look at down bars (a bar with a lower high or lower low than the previous).

Up bars signal an uptrend while down bars signal a down trend, while other price action indicators may be inside or outside bars. The key to success with this strategy is trading off of a chart timeframe that best meets your schedule.

 

  • Momentum Day Trading Strategy

 

There are traders, who lack the patience to wait more than a day for a single trade to develop. They favor situations when things develop instantly and any single trade become profitable during the next several minutes or else they will simply close the position. These are people, who prefer to take profits of 20 pips ten times within the trading day, instead of making a 120-pip profit on a single trade, while watching the market move initially, say 70 pips in the opposite direction.

A suitable approach for such people is the so called short-term momentum strategy. The general idea behind it is to make long or short entries only when momentum is on ones side. In doing so, a trader aims to reach his/her first profit target as soon as possible. The following indicators can be used with this trading approach – the 20-day Exponential Moving Average (EMA), the 100-day Simple Moving Average (SMA) and the Moving Average Convergence Divergence (MACD) (the histogram settings can be – short-term EMA with a period of 12, long-term EMA with a period of 26, signal EMA with a period of 9 and closing prices). A trader needs to make his/her entry only when the MACD has turned within five candles. It is so, because the entry needs to be exactly when momentum is starting to build, not when it has already amassed.

 

Day Trading and Risk Management

The above ground rules can help you avoid some of the biggest catastrophes in day trading, but it’s important to manage smaller risks, as well. Risk management is all about limiting your potential downside, or the amount of money you could lose on any one trade or position. When considering your risk, think about the following issues:

Position sizing. If the trade goes wrong, how much will you lose?

Percentage of your portfolio. Closely related to position sizing, how much will your overall portfolio suffer if a position goes bad?

Losses. What level of losses are you willing to endure before you sell?

Selling. After making a profitable trade, at what point do you sell?

Even with a good strategy and the right securities, trades will not always go your way. It’s important to have a plan for when to close a position, whether it’s purely mechanical — for example, sell after it goes up or down X% — or based on how the stock or market is trading that day.

Proper risk management prevents small losses from turning into large ones and preserves capital for future trades. But that means traders have to be willing to realize a loss, which is hard for many traders to accept, even though it’s essential to long-term survival.

 

Learn Day Trading The Right Way

If you’re not quite ready to be a prime-time player, you can always try a stock market simulator first. Paper trading involves simulated stock trades, which let you see how the market works before risking real money. Paper trading accounts are available at many brokerages. You can also get a feel for the broker’s platform and functionality with this approach, in addition to seeing how theoretically profitable you’d be.

While it can be useful to test day trading under simulated conditions, there’s still no substitute for real-life trading where you have money at stake. Here are some additional tips to consider before you step into that realm:

Establish your strategy before you start. Losing money scares people into making bad decisions, and you have to lose money sometimes when you day trade. Having an exit plan for each of your investment holdings is important because it helps you avoid making an emotional decision when you need to make a rational decision.

Be patient. Look for trading opportunities that meet your strategic criteria. If the situation doesn’t meet it, don’t trade. You don’t have to trade if nothing looks attractive.

Read, read, read. Continually watch what’s happening in the markets. Big news — even unrelated to your investments — could change the whole tenor of the market, moving your positions without any company-specific news.

 

How to Make Money in Day Trading

The answer to question about how to make money day trading really depends on the individual and the way that the trader implements their trading plan. Many day traders are extremely active when they trade, often initiating and exiting positions within seconds in some cases. Other day traders position themselves at a certain level of a currency pair using limit orders, and then take their time in closing out the position sometime later on the same trading day.

Trading news releases is very popular among day traders, since during those announcements market volatility usually increases, which can present them with more opportunities. The experienced traders make use of the latest charts, moving averages, support, and resistance levels to identify and follow market direction. Finally, it is essential to choose the correct profit/loss ratio. Basically, making money in day trading depends entirely on the quality of a trader’s trading plan, how well it is implemented in practice, and the trader’s discipline in adhering to their own rules. Day trading becomes even more challenging when a trader comes into the market each morning unprepared. 

Because day trading is considered very risky, the beginners might make use of demo trading accounts, which lets market participants practice and learn from their mistakes without losing real money.