FBS.com - Daily/Weekly Analysis / Market News

[riki143]

EUR/USD: bears can't break strong support

9/14/2016

 

 

There’s a consolidation above the 55 Moving Average, which brought a “Harami” and a “Doji” patterns. Therefore, the price is likely going to test the nearest resistance line once again. If we have a pullback from this level, then bears will likely try to deliver a new low. As we can see on the Daily chart, here’s a “Shooting Star” at the local high, which has been confirmed, so the pair is likely going to get a support on the 34 Moving Average.

 

 

The nearest support line are so strong, so we’ve got a “Three Methods” and a “Three Line Strike” patterns here. In this case, the market is likely going to reach the closest resistance, but if we see a pullback from this level, then there’ll be an opportunity to have another decline towards the lower “Window”.

 

More:

https://new.fxbazooka.com/analytics/10461

[riki143]

USD/JPY: "Window" going to act as a support

9/14/2016

 

 

There’s a bearish “Shooting Star” at the local high. If it confirms, the price is likely going to get a support on the nearest Moving Averages. As we can see on the Daily chart, the middle of the last huge black candle acted as a resistance again. However, if we see a pullback from the 13 Moving Average, there’ll be an opportunity to have another upward movement.

 

 

We’ve got a “Harami” and a “Three Black Crows”, so the price started to decline. At the same time, if the nearest “Window” brings any bullish pattern, then the market is likely going to form a local upward correction.

 

More:

https://new.fxbazooka.com/analytics/10462

[riki143]

GBP/USD: trade with pundits of currency market

9/14/2016

 

You want to snatch a round sum of money, but remain hesitant on what to bet. We are ready to give you some guts. Let’s look at GBP/USD exchange rate forecasts from some forex market majors.

 

The UOB (United Overseas Bank Limited) has recently opened a short position against the pound with a target for a move to the late August low of 1,3060.

 

CITI, being on the same page with the UOB, has also expressed its bearish expectations towards the GBP/USD currency pair movement, taking up a short position from 1,3186 with a target at 1,200 and defining a stop at 1,3340.

 

Société Générale decided to stay on track with its colleagues and placed a bet on a drop in the pound having opened a long position from 1,3750 with a target at 1,2500. SocGen explained “en detail” a rationale behind its decision. The process of untangling of the UK from the EU will take much time.  And this negatively affects the pound. 

 

 

More:

https://new.fxbazooka.com/analytics/10463

[riki143]

AUD/USD falling inside intermediate impulse wave (3)

9/14/2016

 

AUD/USD falling inside intermediate impulse wave (3)

Next sell target - 0.7410

AUD/USD recently reversed down sharply from the strong resistance zone lying between the resistance levels 0.7700, 0.7800, upper weekly Bollinger Band and the 61.8% Fibonacci retracement level of the earlier sharp downward impulse from the start of 2015, as can be seen below. The downward reversal from this resistance zone created the weekly Japanese candlesticks reversal pattern Shooting Star (highlighted below).

 

AUD/USD is expected to fall down further in the active intermediate impulse wave (3) toward the next sell target at the support level 0.7410 (low of the previous B-wave from July).

 

 

More:

https://new.fxbazooka.com/analytics/10464

[riki143]

AUD/NZD reversed from resistance level 1.0310

9/14/2016

 

AUD/NZD reversed from resistance level 1.0310

Next sell target - 1.0200

AUD/NZD continues to decline – after the earlier downward reversal from the resistance level 1.0310 (former powerful support level which stopped the previous intermediate impulse wave (1) in July, as can be seen below). The downward reversal from the resistance level 1.0310 continues the active minor impulse wave 3, which belongs to the intermediate impulse wave (3) of the primary downward impulse ③ from March.

 

AUD/NZD is expected to continue the downward movement toward the next sell target at the support level 1.0200 (target price for the completion of the active minor impulse wave 3).

 

 

 

More:

https://new.fxbazooka.com/analytics/10465

[riki143]

EUR/USD: "triangle" going to end

9/14/2016

 

 

There’s a possible triangle in wave [x], so bears are likely going to deliver wave [y] of D. Previously, we’ve got a pullback from 5/8 Murrey Math Level (P=200). So, we should keep an eye on 1/8 MM Level as a possible intraday target.

 

 

As we can see on the one-hour chart, here’s a zigzag in wave (e) of [x]. Therefore, if the pair finds a lodgement under 3/8 MM Level, there’ll be an opportunity to have another decline towards 1/8 MM Level.

 

More:

https://new.fxbazooka.com/analytics/10467

[riki143]

SNB in pursuit of relief from the strong currency curse

9/14/2016

 

Anyone feeling disappointed about the ECB’s decision to leave its interest rates unchanged may skip the Swiss National Bank’s quarterly policy assessment scheduled for this Thursday with an easy mind. Economists expect the SNB’s interest rate to remain steady at minus 0.75 percent, the most negative in the world.

 

The SNB’s main objective of protecting the franc from extreme appreciation in relation to euro has become proverbial. For many years the Swiss National Bank didn’t take any actions to change its monetary policy, sticking to its commitment to limit the value of the franc against the euro. If there is a crisis, the SNB’s clients knew for sure that their assets will be safe. 

 

 

A thunderstorm erupted in January last year when the SNB officials decided to provide an economic stimulus to the Swiss economy by pushing its main policy interest rate into negative territory. This decision, although being controversial for the central bank of Switzerland, actually did its work (the country’s GDP expanded 0.6 % this year – the greatest pace since 2014). The affluent state’s financial system remained undamaged. In fact, it still functions at its full capacity – people keep their assets on the bank accounts and don’t try the old proven method of saving money under mattresses. Nowadays, Swiss franc trades without significant fluctuations versus dollar and euro and its volatility remains slow.

 

Even though the overall equilibrium is maintained, the SNB failed to find a proper way of avoiding the negative effect of interest rates on the pensions and insurance industry. The debates about the acceptability of policy of low interest rate are still unfinished. But, at the same time, nobody knows how the Swiss economy will react if the SNB decides to return to positive interest rates. Therefore, we may be sure that the SNB will justify its decision to keep rates on hold this Thursday.

 

More:

https://new.fxbazooka.com/analytics/10468

[riki143]

Key option levels for Wednesday, September 14th

9/14/2016

 

EUR/USD

 

 

 

Main trend Short-term period Medium-term period

Bearish Bearish

Changes in the open interest + 111 822 ↑ + 171 580 ↑

Closest resistance levels 1.1269; 1.1300/16; 1.1338; 1.1364

Closest support levels 1.1207; 1.1188; 1.1164; 1.1135

Trading recommendations

Baseline scenario Short EUR/USD below 1.1207, with target points at 1.1188 and 1.1164

Alternative scenario Moving above 1.1269 can be considered as a signal to Buy the pair, with target at 1.1300 and 1.1338

 

USD/JPY

 

 

 

Main trend Short-term period Medium-term period

Bearish Neutral

Changes in the open interest + 1 259 ↑ + 1 780 ↑

Closest resistance levels 102.98; 103.30; 103.50; 103.73

Closest support levels 102.12; 101.79; 101.51; 101.13

Trading recommendations

Baseline scenario Short USD/JPY below 102.12, with target points at 101.79 and 101.51

Alternative scenario Moving above 102.98 can be considered as a signal to Buy the pair, with target at 103.30 and 103.50

 

More:

https://new.fxbazooka.com/analytics/10469

[riki143]

How will fiscal stimulus influence currencies?

9/14/2016

 

Even if you are an intraday trader, you need to understand the big picture and foresee where the market is going. Being able to identify long-term trends is a vital skill for those who are serious about trading.

 

For a long time, the key tendency was for the central banks all over the world to loosen policy proving monetary stimulus to national economies and making national currencies depreciate. The regulators cut interest rates to record lows and adopted non-standard tools in form of asset purchases, known as quantitative easing (QE). It turned out that although some positive results of such policies were evident, these measures, though enormous in size, failed to make the economies strong enough to withstand challenges without further support. Loose monetary policy became less and less efficient: at this point in time global economic growth is weak and growth of some key economies like China is slowing down. Moreover, excessive monetary stimulus led to high valuations of stocks and other market asymmetries. Balances of central banks have spiked and so did the ratio of public debt no GDP. Obviously, there’s no way such dynamics is sustainable – monetary authorities won’t be able to keep flooding financial system with cheap money forever and the moment when they will have to stop is getting closer.

 

 

Source: Barclays

 

So, something has to change and analysts of Deutsche Bank, Barclays, HSBC, Credit Suisse, Morgan Stanley and Bank of America Merrill Lynch believe that the new trend will be the switch from monetary easing done by the central banks to fiscal easing done by the governments. According to these large investment banks, the recipe of economic success is the combination of fiscal stimulus and normalization of monetary policy.

 

What does fiscal stimulus mean? To put it simply, it implies an increase in government spending and expansion of budget deficits. In this scenario governments should target spending on most growth-generating projects, so that the boosted economic growth will be higher than the increase in debt and debt/GDP ratio will decline.

 

As for the US, both Hillary Clinton and Donald Trump favor increased spending. However, the victory of Hillary Clinton, which now looks more likely, will probably be accompanied by the divided Congress – mixed Senate and a diminished Republican majority – so it might be difficult for her to pull though a large fiscal package. In his turn, Trump has often criticized the Federal Reserve for low interest rates and, if he wins, there will likely be large tax cuts and increase in budget spending. If America does fiscal stimulus, the Fed will have to raise interest rates faster and US dollar will strengthen.

 

In the euro area there may be political obstacles to fiscal stimulus. To succeed there should be coordinated action from all the region’s governments, which can be difficult to achieve. There are also risks that the situation will get out of control in the euro area’s peripheral nations making the ECB keep monetary policy loose or ease it even more. As a result, the effect of fiscal stimulus in the region should be moderately bullish for the euro, but the risks mentioned above should be taken into account.

 

Fiscal stimulus in the UK would be a positive factor for the British pound. However, last week Chancellor of the Exchequer Philip Hammond played down the likelihood of big fiscal stimulus package in response to Brexit vote on November 23, when he will deliver his Autumn Statement. In the longer term, however, Britain may have to do fiscal stimulus as the nation ultimately pulls out of the EU. For a start, the UK no longer plans to tighten fiscal policy and achieve budget surplus and this should be of a help to British economy and decrease bearish pressure on the pound.

 

In Japan it will be much more difficult to encourage an increase of demand through increased government spending as the households tend not to spend, but to save money, so potential of growth in Japanese yen will be limited. In addition, the yen will be hurt if the nation’s current account deteriorates. 

 

 EUR JPY GBP

 

More:

[{URL=https://new.fxbazooka.com/analytics/10466]https://new.fxbazooka.com/analytics/10466[/url]

[riki143]

GBP/JPY & BoE Meeting: Will we see a rebound or a trend line's breakout?

9/15/2016

 

Today at 11:00 GMT we'll have the BoE interest rate decision and analysts are not expecting a rate cut by the central bank, but the uncertainty is there because the Brexit's shadow is still around and there are still questions by the people about the future of British economy for coming months. Also, the BoE MPC members will hold their latest meeting of the year, as they will stop doing monthly meetings. If we see a rate cut, most probably the Sterling will test new lows across the board.

 

Our technical picture for GBP/JPY at H4 chart is still showing a bullish cycle that respects the bullish trend line projected from the August 16th low. Currently, a resistance can be highlighted at the 136.97 level, where the sellers could push lower to the pair. During the meeting, we may see a breakout of that trend line and if that happens, then the next target would be the support level of 133.68.

 

 

More:

https://new.fxbazooka.com/img/articles/10470/GBPJPYH4.png

[riki143]

EUR/USD: in the consolidation around the Cloud

9/15/2016

 

Technical levels: support – 1.1240; resistance – 1.1260

 

Trade recommendations:

 

1. Buy — 1.1260; SL — 1.1240; TP1 — 1.1320; TP2 – 1.1380.

 

2. Sell — 1.1230; SL — 1.1250; TP1 — 1.1150; TP2 – 1.1110.

 

Reason: the prices are located near the Cloud; a cancelled dead cross of Tenkan-sen and Kijun-sen; the Ichimoku Cloud had changed its character.

 

 

More:

https://new.fxbazooka.com/analytics/10471

[riki143]

GBP/USD: stayed inside a Cloud

9/15/2016

 

Technical levels: support – 1.3235; resistance – 1.3260, 1.3360.

 

Trade recommendations:

 

1. Buy — 1.3230; SL — 1.3210; TP1 — 1.3320; TP2 — 1.3360.

 

Reason: a new dead cross of Tenkan-sen and Kijun-sen, but the bullish mood of Ichimoku Cloud is keeping; a strong support of Senkou Span B.

 

 

More:

https://new.fxbazooka.com/analytics/10472

[riki143]

GBP/USD: bears have set a trap

9/15/2016

 

On the daily GBP/USD chart the bulls made another attempt to return the prices inside the bullish trend channel. If it is successful, the risks of growth to 1.331 and 1.335 qill increase. Recoil from diagonal resistance and the following successful test of support at 1.3225 will make the pound decline towards 1.3155 and 1.3085.

 

 

On H1 GBP/USD the break of the upper border of the descending trend will strengthen the case for the "Bat" pattern. When its 88.6% (1.3325) target is reached, there will be a sell signal.

 

 

Recommendation: SELL 1,3225 TP1 1,3155 TP2 1,3085 SL 1,331 SELL 1,3325 TP1 1,3225 TP2 1,3155 SL 1,3395

 

More:

https://new.fxbazooka.com/analytics/10473

[riki143]

AUD/USD: on the SSA support[/b}

9/15/2016

 

Technical levels: support – 0.7450; resistance – 0.7520.

 

Trade recommendations:

 

1. Buy — 0.7450/60; SL — 0.7430; TP1 — 0.7520; TP2 — 0.7580.

 

Reason: a support of Senkou Span A; an irregular dead cross of Tenkan-sen and Kijun-sen and the lines are horizontal; a bullish Ichimoku Cloud.

 

 

More:

https://new.fxbazooka.com/analytics/10474

[riki143]

EUR/USD: price going up and down like an yo-yo

9/15/2016

 

 

There’s a consolidation, which is taking place between the 89 Moving Average and the nearest resistance at 1.1270. Therefore, the market is likely going to get a support at 1.1220 – 1.1196 in the short term. However, if a pullback from this area happens, there’ll be an opportunity to have a bullish movement towards a resistance at 1.1270 – 1.1282.

 

 

The price faced a resistance at 1.1270, which led to form a “V-Top” pattern, so bears are likely going to reach the 89 Moving Average shortly. At the same time, if we see a pullback from this line, bulls will probably try to achieve a resistance at 1.1270 – 1.1282.

 

More:

https://new.fxbazooka.com/analytics/10476

[riki143]

GBP/USD: "V-Bottom" set up bullish correction

9/15/2016

 

 

The pair found a support at 1.3115, so we’ve got a “Double Bottom” pattern here. Considering a resistance at 1.3277, the market is likely going to reach the 89 Moving Average during the day. Nevertheless, if a pullback from this line takes place, bulls will probably try to deliver an upward movement in the direction of the next resistance at 1.3303 – 1.3345.

 

 

There’s a “V-Bottom” pattern, which led to a local upward price movement. So, there’s an opportunity to see a bearish correction towards a support at 1.3234 – 1.3209. Meanwhile, if a pullback from these levels be on the table, an achievement of the closest resistance at 1.3277 – 1.3302 becomes possible. 

 

More:

https://new.fxbazooka.com/analytics/10477

[riki143]

How to trade on SNB? Hints from major banks

9/15/2016

 

The Swiss National Bank will announce its policy decision at 07:30 GMT. The central bank is expected to keep its benchmark rate unchanged at -0.75%. Below you will find how the analysts recommend to trade on this event.

 

Morgan Stanley: Markets are pricing in the dovish SNB and a December rate cut, but this won’t happen. Sell CAD/CHF and AUD/CHF, buy CHF/JPY.

 

Barclays: The lack of volatility after Brexit and some improvement in Swiss economic figures removed the pressure on the SNB to act further easing monetary policy. The central bank’s meeting will be neutral for EUR/CHF.  

 

Credit Agricole: Swiss franc is overvalued, so the SNB won’t be dovish. EUR/CHF will remain supported.

 

More:

https://new.fxbazooka.com/analytics/10478

[riki143]

GBP exchange rate forecast from some big stakeholders before the BoE meeting

9/15/2016

 

Today everybody’s attention will be focused on the meeting of the Bank of England.

 

The majority of economists believe that the BOE will keep its benchmark interest rate steady after cutting it to 0.25% last month and that will be a pretty good news for pound. A package of recent data on retail sales, manufacturing and the labor market shows us that the UK economy managed to shrug off the unexpected result of Brexit vote in June. The next cut in interest rates is expected in November.

 

Some big stakeholders like Credit Suisse and Credit Agricole are positive about the pound’s perspectives. There is a strong rationale behind their confidence in the pound’s uplift. There is no need for the Monetary Policy Committee to be any more dovish than the market is already pricing in for the last months of this year (strategy “sell the rumor, buy the fact” does work). Moreover, the BOE might be willing to save ammunition for rugged times – an actual “Brexit”. Therefore, the pound will unlikely face a considerable downfall from the current levels.

 

Barclays, as its aforementioned colleagues, doesn’t expect any changes in the MPC’s monetary policy settings today. The Barclays experts expect the Committee members vote in favor of the status quo of the current APF, but remains uncertain about the Gertjan Vlieghe’s vote saying that he is apt to vote for a cut. The Barclays officials have also mentioned that the minutes can make it evident for the Treasury Select Committee that some the MPC members are open towards further package of easing measures. This should make downside risks to the economy materialize and might be keeping GBP/USD under pressure. That’s why they chose to target GBP/USD at 1.27 by the end of this year.

 

More:

https://new.fxbazooka.com/analytics/10482

[riki143]

EUR/USD: "Harami" cause bullish movement

9/15/2016

 

 

There’s a strong support by the Moving Averages, so we’ve got a “Doji” pattern, which has been confirmed. Therefore, the market is likely going to reach the closest resistance in the short term. If we see a pullback from this line, there’ll be a chance to have another decline. Also, there’s a new bullish candle on the Daily chart, so bulls are probably going to test the nearest resistance once again.

 

 

We’ve got a consolidation, but there’s a “Harami” at the local low, which has been confirmed strongly. In this case, it’s likely that the pair is going to achieve the nearest resistance once again during the day. If a pullback from this level happens, there’ll be an opportunity to have a decline towards the lower “Window”.

 

More:

https://new.fxbazooka.com/analytics/10483

[riki143]

USD/JPY: "Window" going to act as a support once again

9/15/2016

 

 

There’s a “Shooting Star” at the local high, which has a confirmation, so the price is likely going to test nearest “Window”. If we see a pullback from it, there’ll be an opportunity to have another upward movement. As we can see on the Daily chart, here’s another “Shooting Star”, so the price couldn’t close above the middle of the last huge black candle. In this case, there’s a chance to have a local decline.

 

 

We’ve got a “High Wave” and a “Three White Soldiers” on the lower “Window”. However, there’s a bearish “Harami”, so the price is likely going to test the “Window” once again during the day. If we have the second pullback from this level, bulls will likely try to reach the 34 Moving Average. 

 

More:

https://new.fxbazooka.com/analytics/10484

[riki143]

EUR/CAD rising inside minor impulse wave (iii)

9/15/2016

 

EUR/CAD rising inside minor impulse wave (iii)

Next buy target - 1.5000

EUR/CAD continues to rise inside the minor impulse wave (iii) – which belongs to the impulse wave 3 of the sharp intermediate impulse wave © from the end of April. The price earlier broke through the resistance level 1.4670 (which reversed the previous waves (i) and (. The breakout of the resistance level 1.4670 accelerated the active impulse wave 3- which then broke above the next resistance level 1.4800 (top of impulse wave 1 from May).

 

EUR/CAD is expected to rise further in the direction of the next buy target at the round resistance level 1.5000 (which stopped and reversed the previous sharp B-wave in April, as can be seen below).

 

 

More:

https://new.fxbazooka.com/analytics/10485

[riki143]

AUD/CHF reversed from support zone

9/15/2016

 

AUD/CHF reversed from support zone

Next buy target - 0.7400

AUD/CHF recently reversed up from the support zone lying between the support level 0.7270 (which reversed earlier waves (a) and 2, as can be seen from the daily AUD/CHF chart below), lower daily Bollinger Band and the 50% Fibonacci correction level of the earlier sharp upward impulse from the middle of June. The upward reversal from this support zone completed the previous minor ABC correction (ii).

 

Given the strength of the support level 0.7270 - AUD/CHF is expected to continue to rise toward the next buy target at the resistance level 0.7400. Buy stop-loss can be placed at half the daily ATR (Average True Range) below the aforementioned support level 0.7270.

 

 

More:

https://new.fxbazooka.com/analytics/10486

[riki143]

EUR/USD: "triangle" is on the eve of completion[/url]

9/15/2016

 

 

There’s a possible triangle in wave [x], so if we see a pullback from the upper side of this pattern, bears are likely going to deliver wave [y] of D. Therefore, we should keep an eye on 1/8 Murrey Math Level (P=200) as a possible intraday target.

 

 

As we can see on the one-hour chart, we’ve got a zigzag in wave (d). In this case, wave (e) is likely going to end soon. If we have a pullback from 5/8 MM Level, then there’ll be an open door for wave (a).

 

More:

https://new.fxbazooka.com/analytics/10487

[riki143]

Key option levels for Thursday, September 15th

9/15/2016

 

EUR/USD

 

 

 

Main trend Short-term period Medium-term period

Bearish Bearish

Changes in the open interest + 149 405 ? + 113 570 ?

Closest resistance levels 1.1306; 1.1329/42; 1.1360; 1.1383

Closest support levels 1.1234; 1.1211; 1.1183; 1.1151

Trading recommendations

Baseline scenario Short EUR/USD below 1.1234, with target points at 1.1211 and 1.1183

Alternative scenario Moving above 1.1306 can be considered as a signal to Buy the pair, with target at 1.1329 and 1.1360

 

GBP/USD

 

 

 

Main trend Short-term period Medium-term period

Bearish Bearish

Changes in the open interest + 1 289 ? + 803 ?

Closest resistance levels 1.3287; 1.3320; 1.3355; 1.3378

Closest support levels 1.3174; 1.3154; 1.3129; 1.3102

Trading recommendations

Baseline scenario Short GBP/USD below 1.3174, with target points at 1.3154 and 1.3129

Alternative scenario Moving above 1.3287 can be considered as a signal to Buy the pair, with target at 1.3320 and 1.3355

 

 

USD/CAD

 

 

 

Main trend Short-term period Medium-term period

Neutral Bullish

Changes in the open interest + 1 036? + 1 255 ?

Closest resistance levels 1.3210; 1.3238; 1.3264; 1.3300

Closest support levels 1.3173; 1.3125; 1.3094; 1.3053

Trading recommendations

Baseline scenario Long USD/CAD above 1.3210, with the target points at 1.3238 and 1.3264

Alternative scenario Moving below 1.3173 can be considered as a signal to sell the pair, with target at 1.3125 and 1.3094

 

 

 EUR GBP CAD

 

More:

https://new.fxbazooka.com/analytics/10488

[riki143]

Top 6 best candlestick reversal patterns

9/15/2016

 

Eastern wisdom gained iconic status in Western countries. Some people addressed to Eastern thinkers in order to purge themselves from sins and deepen their spirituality, while others learnt how to make money. That’s the case of Japanese candle chart analysis now used internationally by traders. One of the main advantages of using candle charts is that they provide you with early indications of market reversals. To be able to recognize these trading signals, you should memorize the main candlestick patterns.

 

Harami and Engulfing candlestick

 

Let’s refer to my favorite reversal pattern – Harami. From old Japanese “harami” means pregnant.  The bigger candlestick is the mother, and the smaller one is the baby. The body of the baby must lie within the body of its mother.

 

 

Their position tells us that the market has come to a muted reversal. You may ask: “Ok, and how do we trade it?” In a bull trend, we should use the bullish Harami to define the end of the ascending trend. In a bear trend, you have to use the bearish Harami to designate the end of the bullish retracement.

 

The next popular trend is called engulfing candlestick. It is the opposite of Harami pattern flipped horizontally. The body of the second candle entirely engulfs the body of the first. The engulfing candlestick is a reversal of a downward trend; it demonstrates how the sellers were overpowered by the buyers.

 

Trading signals. In case of a bull trend, you should buy above the bullish engulfing pattern for bullish continuation. If there is bear trend, sell below the bearish engulfing pattern for bearish continuation.

 

Hammer and Hanging Man candlesticks

 

Well, let me put it bluntly, these two patterns look exactly the same. Their body is located near the top of the candlestick, and their shadow is much longer than their body. The difference between the hammer and the hanging man is following: the hammer pattern can be identified at the very end of the downward trend line (it is a strong bullish signal), while the hanging man appears at the end of a bull run (roughly speaking, the suffocation of the hanging man signifies the beginning of the bearish trend).

 

 

 

 

Trading signals. If there is a downward trend, we should buy above the hammer pattern for a reversal play. In case of a bullish trend, we should sell below the Hanging Man pattern for a reversal play as soon as the bears consolidate their positions.

 

Piercing Line and Dark Cloud Cover

 

The first candle of the Piercing line pattern is bearish, while the second one is bullish. It opens below the wick of the first candlestick and closes above the 50% of the first candle’s body. Both bodies are long enough.

 

 

The Dark cloud cover is a bearish version of the Piercing line. The first candlestick is bullish. The second one opens above the higher ending of the wick of the first candlestick and closes below the mid-point of the first candlestick.

 

2. Inverted Hammer and Shooting star.

 

The Inverted hammer has the same shape as the Shooting star. But they designate the beginning of two different trends. When an Inverted Hammer is found at the end of a downtrend, a Shooting star is placed at the end of the uptrend.

 

 

Trading signals. In a downtrend, you should buy above the Inverted Hammer pattern for a reversal play once “bullies” win back their lost position and consolidate them. And in a bull trend, it’s better to sell below the Shooting star pattern for a reversal play.

 

Morning and Evening Stars

These ones have three bars. A Morning star consists of a long bearish candlestick, a candle below it (no matter which one, it could bearish or bullish one) and a bullish candlestick that closes within the body of the first candlestick of the same pattern.

 

 

 

An evening star consists of a long bullish candlestick, a star above it (either bullish or bearish) and a bearish candlestick closing within the body of the first candlestick.

 

Trading signals are following: buy above the last candlestick of Morning star three-bar pattern and sell below the las bar of the Evening start formation.

 

Three White Soldiers and Three Black Crowns

It’s a sort of an ascending ladder, each candlestick embodies a staircase. All three part of this pattern have almost the same size with a little deviation. After we pass three staircases, we may be sure that the bullish trend is growing in strength.

 

 

 

The Three Black Crows pattern reminds a descending ladder. Each of the three candlesticks in this pattern should open within the previous candle body and close near its ending. If three crows flew in the “window” (appear on the graph), the bearish trend is on the lookout.

 

Trading signals: you should buy above the Three White Soldiers pattern and sell below the Three Black Crowns.

 

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