Key quotes:
"GBP/USD was however under pressure along with the vast strength of USD, and the focus on the United States side of the equation could continue through the North American session, with little on the calendar and contemplating the markets the FOMC meeting next week".
"Technically speaking, the overnight selloff further damage to the trend of the past month and breaking under a short-term trend in the recent support hours suggests further downside in the next Bull sessions".
"Long term graphs are also showing signs of lower ride, especially with a week under 1.63".
Reading CCI If you are already familiar with other oscillators such as RSI (Relative Strength Index), you may already be familiar with how to read CCI. Both indicators use a mathematical equation to depict overbought and oversold levels for traders. Pictured above we can see these levels marked with CCI moving between them. CCI uses a +100 value to indicator overbought levels, while below -100 value represents an oversold value. It is important to notice that 70-80% of the time CCI values actually tend to fall between overbought and oversold levels. This means traders will need to remain patient while waiting for one of these scenarios to occur. As with other overbought/oversold indicators, this means that there is a large probability that the price will correct to more representative levels. Knowing this, trend traders will wait for the indicator to move outside of one of these points before reverting back in the direction of the primary trend. Let’s look at an example using the strong trend on Gold (XAU/USD). Learn Forex – Gold & CCI 
Gold & CCI Above we can see an example of CCI in action using a daily graph of Gold, (XAU/USD). Due to the recent strength of the Dollar, and knowing that price the price of Gold has been moving generally lower, trend traders should look to initiate new selling positions. The primary way of timing entries with CCI in a downtrend is to wait for the indicator to move above a reading of +100 (overbought), and enter into the trade when CCI moves back below +100. This creates an opportunity to sell the currency as momentum is returning back in the direction of the trend. Traders should only enter after a full candle close on their chart, thus confirming a reading under the overbought value. The above chart shows several past entries on Gold using CCI as an entry mechanism. Currently CCI is reading near its center line, so traders will need to wait for an opportunity to trade wait to trade the next retracement of the commodity. ---Written by Walker England, Trading Instructor To contact Walker, email wengland@fxcm.com. Follow me on Twitter @WEnglandFX. To be added to Walker’s e-mail distribution list, CLICK HERE and enter in your email information. Learn Your Next CCI Strategy! Want to learn more about trading CCI? Sign up for our free CCI training course and learn new ways to trade with this versatile oscillator. Register HERE to start learning your next CCI strategy!
Talking Points: 
Chart available inside DailyFX Plus and created by DailyFX’s David Rodriquez The amount of sellers in the GBP to USD has steadily increased as the exchange rate increased from the 1.50 low in July. These sellers become a future supply of buyers when they decide to close out their trades. We will use this future supply of buyers as an opportunity to keep the Pound supported. Executing the Trade Since we anticipate the British Pound may continue its broad based rally we will take a diversified approach and buy the single currency against a basket of currencies. There are several advantages to trading a currency rather than a pair with the largest benefit being diversification. You can try trading the GBP Basket BUY position in a Mirror account. You can even try this out in a practice account at the same link above. Good luck with your trading! ---Written by Jeremy Wagner, Head Trading Instructor, DailyFX Education Follow me on Twitter at @JWagnerFXTrader.To be added to Jeremy’s e-mail distribution list, click HERE and select SUBSCRIBE then enter in your email information. See Jeremy’s recent articles at his DailyFX Forex Educators Bio Page. Looking to get started in FX trading? Take this New2FX course and learn about leverage. In the free course you will hear about the Traits of Successful traders. Register here for the free 20 minute course to start your learning. 
(created from FXCM Marketscope 2.0) How Do You Draw Fibonacci Expansions? Using FXCM's Marketscope charts, we need to click on the arrow next to the Fibonacci button located on the top toolbar. We can then choose Fibonacci Expansion from the drop down menu. Learn Forex: Adding the Fibonacci Expansion 
Now that the Fibonacci Expansion has been selected, we will need to select three price points to setup the tool properly. We will click a total of 3 times on the chart at the following price levels, in the following order. The beginning of the primary move, the low. The end of the primary move, the high. The retracement, the swing low. After clicking OK, we should see several horizontal lines projected on the chart. Learn Forex: Drawing and Reading the Fibonacci Expansion 
How Do You Interpret Fibonacci Expansions? This particular example on the EUR/USD daily chart is utilizing the more popular 0.618, 1.000 and 1.618 expansions. (There are also optional expansions at the 2.618 and 4.236 levels that you could add). All these lines can be considered resistance levels as the price trends higher, making them perfect areas to place profit targets. We can see that price quickly hit the 1st profit target before consolidating, and then later broke upwards towards the 2nd profit target before retracing lower. It hit each of these prices on the nose before price regrouped for its next move. This gave us some spectacular exits for a long trade. If we remained a EUR/USD bull, our next target would be right below 1.4250 (at the 1.618 Fibonacci Expansion). Scaling out of a trade with multiple targets is an effective money management strategy allowing you to lock in profits as the position matures. Just like diversifying your portfolio can help smooth out your overall returns, having multiple profit targets smooth out your returns on a trade by trade basis. Finishing With Fibonacci Once you add Fibonacci Expansions on a few of your charts, it becomes second nature to project these support/resistance lines for all your trend trades to assist with your profit targets. It also accompanies the Fibonacci Retracement tool nicely since the Fibonacci Retracement is traditionally used to get good entries on pullbacks from an existing trend. You can learn about creating entries using Fibonacci Retracements by clicking here. Good trading! -Written by Rob Pasche To contact Rob, email rob@fxcm.com. Want to learn about the Mirror Trader automated trading platform? Join us for a live Mirror Trader Platform walkthrough Wednesdays at 3pm ET. 
Courtesy of dailyfx.com/technical_analysis/sentiment Trader sentiment is a favorite tool of the DailyFX faithful to see when a FX market is being aggressively denied by retail traders. While we hope that traders on the whole were more successful, our Traits of Success Forex Traders report clearly showed that retail traders aggressively fade strong trends or add to their losing trades against the trend. The report covered 12 million live FXCM account holder trades and made the obvious point that when the retail crowd is extremely negative towards a specific trend, that trend can and likely will continue to the disappointment of many traders. Looking above, you’ll see a line price chart of the SPX500 with an overlay of retail positioning where a current reading of -6 shows you that there are 6 traders short for every one trader long on the FXCM order book. A -6 reading clearly displays an overwhelming attempt by traders to call a top to the SPX500. Sadly, as you can see above, retail traders have been net short for all of 2013 as the SPX500 has rallied 26.5% YTD for over 400 points. Bottom Line: Trading with the retail crowd is a risky strategy as the crowd will aggressively look to call a top months or years before the event comes to pass. The SPX500 is a strong trend that is likely best to either be long or flat but not short. Historical Rallies Have Far Surpassed the Current Rally There is a massive list of cognitive bias’ that are important to fight off as you look to build up your trading account. The two that I believe must be fought most aggressively is overconfidence which breeds over trading your account and not thinking like a pro and the recency bias. The recency bias states that you most easily recall and expect a repeat occurrence of something that recently played out. In terms of the stock market, many have been looking for a repeat or worse of the 2008 equity market crash. With the event of the 2008 market crash and following great recession in mind, many traders feel like the market “is due” for a correction / crash because of how far the equities market has move from the March 9th, 2009 low. However, if you go back past the 2008 global credit crisis and subsequent equity market crash you’ll realize that the SPX500 has had rallies that have far surpassed what is currently in play. Long-Term view of SPX500 Shows Prior Rallies 
Presented by FXCM’s Marketscope Charts Corrections on the SPX500 have been relatively shallow as major institutions are putting too much belief into a downside move as seen few if any lower highs and lower lows on the charts. Price in relation to the 55-week moving average is rather telling when you look at historical rallies. The current rally going back to late 2012 has had weekly closes above the 55-week moving average for nearly 80 weeks. However, if you put your recency bias aside, you’ll see that the SPX500 closed above the 55-week moving average for 167-weeks going into the 1987 crash and consequently 190-weeks going into the summer 1998 high. Therefore, recency bias may have you thinking that a crash is around the corner but prior bull markets show that this rally could go on for another few years. Bottom Line: Judging the SPX500 by historical standards and not the most recent major correction shows that this rally could have much further to run before running out of steam. Therefore, trading against this long term trend could be disappointing and costly. SPX500 corrections have been shallow and denote underlying strength 
Presented by FXCM’s Marketscope Charts The strength of an overall trend can often be discovered through corrections. The SPX has had its share of sell-offs since the 2009-low but most have been well contained and only one correction tested the Fibonacci level of last resort, the 76.4% before resumption of the trend. What’s more, the cause of that correction was the government shutdown and debt ceiling crisis in 2011 which caused XAUUSD to spike to $1920 per oz. before the fear market ensued. As you well now know, we had a repeat of that fundamental story in Washington DC this October but the correction was shallow and was followed by all time-highs in the SPX500. Bottom Line: Corrections can often tell you how strong the trend is and how much conviction traders have who are going against the trend. The shallow and sideways corrections that the SPX500 has experienced over the last 4 years and specifically this year shows it’s best to stay either be bullish or flat, but fading this trend is a low probability play. Happy Trading! ---Written by Tyler Yell, Trading Instructor To contact Tyler, email tyell@dailyfx.com To be added to Tyler’s e-mail distribution list, please click here. Become a Smarter Trader Today! Claim your FREE universal membership to DailyFX Internet Courses & save yourself hours in figuring out what FOREX trading is all about. You'll get this FREE 20 minute “New to FX” course presented by DailyFX Education. In the course, you will learn about the basics of a FOREX transaction, what leverage is, and how to determine an appropriate amount of leverage for your trading. You can instantly register for free here to start your FOREX learning now!
The Trade Setup GBPCHF has declined some 500 pips since reaching a high of 1.5475 back on 7/23/2012. After rebounding from a low at 1.3964 made on 2/25/2013 to a high of 1.4922 on 12/2/2013, GBPCHF has broken down below the rising trend line that formed the bottom of this rising wedge at 1.4511. Each rising wedge will typically imply a drop equal in distance from the last significant high use price patterns to anticipate when and where a breakout may happen. As this could be a very large distance, traders can also use the height of the pattern to obtain a profit target as well. In this case, the height of the pattern is around 697 pips. We can now use this “pip measurement” to determine the profit target. Subtracting 697 from 1.4511 we come up with a profit target located at 1.3814. Next, we identify the last swing high within the pattern in order to set a protective stop loss. This stop loss level should be less than our profit target. A typical trader mistake is to risk more on a trade than they stand to make in profit. The last swing high was reached on December 10th at 1.4645 so a stop can be placed just above that level. The final step is to set an entry order to short GBPCHF around four pips below the last low of 1.4487 that was made on 12/11/2013. The first three steps are at the core of what Forex traders can use to trade the rising wedge pattern. The fourth step that I use is the addition of MACD confirmation. Since MACD confirms trend direction as well as forecasts turning points, the presence of negative MACD divergence preceding a breakout can give traders an additional layer of confidence that the downward slide is near. Using these steps help to stack the odds in your favor. Having a repeatable checklist of steps can insure that you stick to your rising wedge trading plan. ---Written by Gregory McLeod Trading Instructor To contact Gregory McLeod, email gmcleod@dailyfx.com To be added to Greg’s e-mail distribution list, send an e-mail with subject line "Distribution List" to mailto:gmcleod@dailyfx.com Follow me on Twitter @gregmcleodtradr. This article outlined a plan for trading the rising wedge after a breakout. Another way to find an entry is with the use of Fibonacci Retracements. Sign my guestbook to automatically enroll in a 20-minute Fibonacci Retracement course. By watching the slide presentation and taking the short quizzes you can dramatically increase your confidence in finding Forex Retracement Discounts!
Talking Points 
Charts Created using Marketscope – Prepared by Kristian Kerr EUR/USD probed above the 2nd square root relationship of the year’s high at 1.3595 on Thursday to trade to its highest level in three weeks A daily close over 1.3595 will shift our near-term trend bias to higher Interim support is seen at 1.3540, but weakness under 1.3475 is really needed to signal that a more important decline is developing The middle of next week is a medium-term cycle turn window A daily close over 1.3595 will shift our near-term trend bias positive EUR/USD Strategy: Focus on long side opportunities on a close over 1.3595. Price & Time Analysis: USD/CAD 
Charts Created using Marketscope – Prepared by Kristian Kerr USD/CAD closed above the 4th square root relationship of the September low on Wednesday to trade to its highest level since early July Our near-term trend bias is higher in Funds while above 1.0505 The 6th square root relationship of the 2Q13 high at 1.0610 is an important upside pivot with traction above exposing the 127% extension of the 2012 range at 1.0665 A medium-term cycle turn windown is seen around the 1st half of next week Only a daily close below 1st square root relationship of the year’s high at 1.0505 would turn us negative on USD/CAD USD/CAD Strategy: Like the long side while over 1.0505 Focus Chart of the Day: AUD/USD 
AUD/USD has rebounded sharply from just above the key support zone we highlighted on Tuesday. With the .9330 to .9360 area marking a convergence of several key Gann levels including the 7th square root relationship of the October high, the 2x1 Gann angle line of the year’s closing low and the 2nd square root relationship of the year intraday low it is a natural stopping point. Just how important this counter-trend move is will depend on the price action over the next few sessions. If Aussie can gain traction over .9170 on a daily close basis it likely sets up a stronger correction – perhaps back towards the neckline of the Head & Shoulders pattern. A potential hindrance to further upside is the short-term cyclical picture which is not particularly positive on the exchange rate as a minor turn window is seen today. A clear move under .9030 is required to signal that the broader downtrend is resuming. To receive other reports from this author via e-mail, sign up toKristian’s e-mail distribution list via this link. --- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com This publication attempts to further explore the concept that mass movements of human psychology, as represented by the financial markets, are subject to the mathematical laws of nature and through the use of various geometric, arithmetic, statistical and cyclical techniques a better understanding of markets and their corresponding movements can be achieved To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter @KKerrFX 
Charts Created using Marketscope – Prepared by Kristian Kerr USD/JPY probed above the 1st square root progression of the year’s high at 102.75 to reach its highest level since late May on Monday Our near-term trend bias is positive on the exchange rate while over 100.65 The 161.8% extension of the September/October decline at 103.05 is the next level of resistance ahead of the year’s high A medium-term cycle turn window is seen next week Only a daily close below the 2nd square root progression of the year’s high at 100.65 would undermine the immediate positive tone in the rate USD/JPY Strategy: Focus on long side opportunities while over 100.65. Price & Time Analysis: AUD/USD 
Charts Created using Marketscope – Prepared by Kristian Kerr AUD/USD fell to its lowest levels since early September on Friday before rebounding from strong support at the 7th square root relationship of the October high Our near-term trend bias is lower in the Aussie while below .9170 A convergence of several important Fibonacci and Gann levels between .9060 and .9030 suggest it is an extremely important support zone and a daily close below is needed to confirm a resumption of the broader decline A medium-term cycle turn window is seen next week Only a daily close over .9170 will shift our near-term trend bias to positive in the Aussie AUD/USD Strategy: We like being flat following the rebound from key support. Focus Chart of the Day: EUR/USD 
The next week or so looks to be quite important for the Euro from a cyclical perspective. Starting around Wednesday and extending to next Tuesday a myriad of different cyclical methodologies all begin to converge. Perhaps the most important is a Fibonacci time relationship with last year’s low and the 1Q13 high at the end of the week. With EUR/USD having rallied steadily for over three weeks now a secondary high (versus the October high) of some kind forming during this turn window is clearly the favored scenario. Only aggressive weakness on a daily close basis over the next few days below 1.3430 would warn that the Euro has peaked ahead of schedule. Such aggressive weakness could also raise the possibility of a cyclical inversion (low instead of a high). Both look like relatively low probability scenarios at the moment. To receive other reports from this author via e-mail, sign up toKristian’s e-mail distribution list via this link. --- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com This publication attempts to further explore the concept that mass movements of human psychology, as represented by the financial markets, are subject to the mathematical laws of nature and through the use of various geometric, arithmetic, statistical and cyclical techniques a better understanding of markets and their corresponding movements can be achieved To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter @KKerrFX 
Daily Chart - Created Using FXCM Marketscope 2.0 ** The Dow Jones FXCM US Dollar Index and the Mirror Trader USD basket are not the same product. S&P 500 TECHNICAL ANALYSIS – Prices are attempting to turn lower, as expected. A break below Rising Wedge support (1808.40) exposes 1773.90, the 23.6% Fibonacci retracement. Resistance is at 1813.10, the November 29 high. A turn above that eyes Wedge resistance at 1824.70. 
Daily Chart - Created Using FXCM Marketscope 2.0 GOLD TECHNICAL ANALYSIS – Prices are turning lower from resistance in the 1252.08-1256.18 area, marked by a falling trend line set from late October and the 23.6% Fibonacci retracement. Near-term support is at 1222.60, the 76.4% Fib expansion, with a break lower exposing the 100% mark at 1179.63. Alternatively, a turn above 1256.18 eyes the 38.2% retracement at 1276.35. 
Daily Chart - Created Using FXCM Marketscope 2.0 CRUDE OIL TECHNICAL ANALYSIS– Prices are testing resistance at the top of a falling channel set from late August (93.63). A break higher initially exposes 95.36, followed by the 23.6% Fibonacci retracement at 96.57. Near-term support is at 91.74, the November 27 low. Pushing below that eyes a falling trend line at 91.53. 
Daily Chart - Created Using FXCM Marketscope 2.0 --- Written by Ilya Spivak, Currency Strategist for DailyFX.com To receive Ilya's analysis directly via email, please SIGN UP HERE Contact and follow Ilya on Twitter: @IlyaSpivak
Daily Chart - Created Using FXCM Marketscope 2.0 ** The Dow Jones FXCM US Dollar Index and the Mirror Trader USD basket are not the same product. S&P 500 TECHNICAL ANALYSIS – Prices put in a Shooting Star candlestick below resistance at 1808.20, the 150% Fibonacci expansion, hinting a turn lower may be ahead. Negative RSI divergence and the outlines of a Rising Wedge chart formation reinforce the case for a downside scenario. Breaking the Wedge bottom – now squarely at 1800.00 – exposes the 138.2% and 123.6% Fib levels at 1798.50 and 1779.80, respectively. A push above resistance targets the 161.8% expansion at 1820.80. 
Daily Chart - Created Using FXCM Marketscope 2.0 GOLD TECHNICAL ANALYSIS – Prices bounced from support at 1222.60, the 76.4% Fibonacci expansion. Resistance is in the 1251.21-56.18 area, marked by the 23.6% Fib retracement and a falling trend line set from late October. A break above that targets the 38.2% retracement at 1276.35. Alternatively, a reversal below support eyes the $1200/oz figure and the 100% expansion at 1179.63. 
Daily Chart - Created Using FXCM Marketscope 2.0 CRUDE OIL TECHNICAL ANALYSIS– Prices broke lower out of consolidation, taking out the 23.6% Fibonacci expansion at 92.79 to expose the 38.2% level at 91.06. A further push beneath that eyes the 50% Fib at 89.66. Alternatively, reversing back above 92.79 aims for a falling channel top at 94.23. 
Daily Chart - Created Using FXCM Marketscope 2.0 --- Written by Ilya Spivak, Currency Strategist for DailyFX.com To receive Ilya's analysis directly via email, please SIGN UP HERE Contact and follow Ilya on Twitter: @IlyaSpivak
Daily Chart - Created Using FXCM Marketscope 2.0 ** The Dow Jones FXCM US Dollar Index and the Mirror Trader USD basket are not the same product. S&P 500 TECHNICAL ANALYSIS – Prices broke lower as expected, completing a Rising Wedge chart formation. Initial support is at 1788.80, the 14.6% Fibonacci retracement, with break below that targeting the 23.6% level at 1773.90. Near-term resistance is at 1813.10, the November 29 high. 
Daily Chart - Created Using FXCM Marketscope 2.0 GOLD TECHNICAL ANALYSIS – Prices put in a bullish Morning Star candlestick pattern, hinting a move higher is ahead. Early signs of positive RSI divergence reinforce the case for an upside scenario. Resistance is in the 1237.57-51.54 area, marked by the 23.6% Fibonacci retracement and the October 15 low. A break above that initially targets the 38.2% level at 1268.98. Near-term support is at 1211.67, the December 4 low. 
Daily Chart - Created Using FXCM Marketscope 2.0 CRUDE OIL TECHNICAL ANALYSIS– Prices continued higher as expected after breaking resistance at the top of a falling channel set from late August. A break above 96.57, the 23.6% Fibonacci retracement, has exposed the 38.2% level at 99.56. Alternatively, turning back below 96.57 aims for horizontal resistance-turned-support at 96.57. 
Daily Chart - Created Using FXCM Marketscope 2.0 --- Written by Ilya Spivak, Currency Strategist for DailyFX.com To receive Ilya's analysis directly via email, please SIGN UP HERE Contact and follow Ilya on Twitter: @IlyaSpivak
Chart prepared by Jamie Saettele, CMT Euro 
Chart prepared by Jamie Saettele, CMT British Pound 
Chart prepared by Jamie Saettele, CMT Australian Dollar 
Chart prepared by Jamie Saettele, CMT Japanese Yen 
Chart prepared by Jamie Saettele, CMT Canadian Dollar 
Chart prepared by Jamie Saettele, CMT Swiss Franc 
Chart prepared by Jamie Saettele, CMT Mexican Peso 
Chart prepared by Jamie Saettele, CMT Gold 
Chart prepared by Jamie Saettele, CMT Silver 
Chart prepared by Jamie Saettele, CMT Copper 
Chart prepared by Jamie Saettele, CMT Crude 
Chart prepared by Jamie Saettele, CMT --- Written by Jamie Saettele, CMT, Senior Technical Strategist for DailyFX.com To contact Jamie e-mail jsaettele@dailyfx.com. Follow me on Twitter for real time updates @JamieSaettele Subscribe to Jamie Saettele's distribution list in order to receive actionable FX trading strategy delivered to your inbox. Jamie is the author of Sentiment in the Forex Market.
Source: FXCM Trading Station Desktop, Prepared by David Rodriguez 1. Our Senior Technical Strategist has favored an Australian Dollar short position since 11/7, and a major technical pattern favors further weakness. He notes the lack of significant technical support until $0.9013-9069. Correlation between Australian Dollar and Gold Prices Underlines AUD Sensitivity to Falling Commodity Prices 
2. Beyond the Australian Dollar technical forecast, we note that the AUDUSD link to commodity prices leave it at risk of further weakness. Our Senior Technical Strategist notes that the next several days are critical to Gold prices, and indeed it will be important to watch whether XAUUSD weakness puts further pressure on the falling AUDUSD. Gold Prices are Testing Important Technical Resistance and Remain at Risk for Further Weakness 
Data source: Bloomberg 3. Heavily one-sided retail forex crowd sentiment has left our sentiment-based Momentum2 trading system to consistently sell into further weakness, and indeed current readings favor AUDUSD declines. Forex crowds remain heavily long the Australian Dollar versus the US Dollar, favoring further weakness 
Source: FXCM Execution Desk Data Retail FX traders are now their most long the Australian Dollar versus its US namesake since it set a double bottom in September. Such one-sided sentiment warns that we’re at a potential sentiment extreme, but as long as crowds continue buying we’ll maintain our contrarian bias in favor of further weakness. Follow any updates on the Australian Dollar via this author’s e-mail distribution list. Forex Correlations Summary View forex correlations to the S&P 500, S&P Volatility Index (VIX), Crude Oil Futures prices, US 2-Year Treasury Yields, and Spot Gold prices. 
Data source: Bloomberg. Chart source: R SEE GUIDE ON READING THE ABOVE CHART --- Written by David Rodriguez, Quantitative Strategist for DailyFX.com David specializes in automated trading strategies. Find out more about our automated sentiment-based strategies on DailyFX PLUS. Contact and follow David via Twitter: https://twitter.com/DRodriguezFX 26 November 2013 14:45 GMT