How to Spot Forex Trends - Part 4 | Vantage FX UK
- 11 years ago
Vantage FX (www.vantagefx.co.uk) look at how to spot Forex trends through Chart Analysis
Trend-spotting
We are looking at a monthly GBP/USD chart, and we can see that Cable often trades in long sideways ranges.
In 1992 there is a collapse which is almost identical to the move in 2008 where GBP/USD drops drastically from a $2 high. We have drawn support lines to capture some of the support and resistance levels. These levels can continue ad infinitum.
Now moving to a weekly chart, let's take a look at this year's range. We have traded from January's high all the way down to March, then from March to July we are hovering around the 1.4850 level, and now we have reversed pretty much all of the move since July and are back up to where we started in January.
Look at the Fibonacci retracement from January to March, and keep in mind the predictive power and potential turning points that are on the support levels and Fibonacci levels. Several trends are at play here, and we should use a combination of known support and resistance levels along with adjusting our trend lines to suit those levels.
Trend-spotting
We are looking at a monthly GBP/USD chart, and we can see that Cable often trades in long sideways ranges.
In 1992 there is a collapse which is almost identical to the move in 2008 where GBP/USD drops drastically from a $2 high. We have drawn support lines to capture some of the support and resistance levels. These levels can continue ad infinitum.
Now moving to a weekly chart, let's take a look at this year's range. We have traded from January's high all the way down to March, then from March to July we are hovering around the 1.4850 level, and now we have reversed pretty much all of the move since July and are back up to where we started in January.
Look at the Fibonacci retracement from January to March, and keep in mind the predictive power and potential turning points that are on the support levels and Fibonacci levels. Several trends are at play here, and we should use a combination of known support and resistance levels along with adjusting our trend lines to suit those levels.