News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • US Dollar Price Action Setups Pre-FOMC: EUR/USD, GBP/USD, USD/CAD https://www.dailyfx.com/forex/analyst_picks/todays_picks/james_stanley/2021/09/17/US-Dollar-Price-Action-Setups-pre-FOMC-EURUSD-EUR-USD-GBP-USD-GBPUSD-USD-CAD-USDCAD.html https://t.co/J25MYsXCa9
  • The US Dollar is pushing up to a fresh September high after the release of University of Michigan Consumer Sentiment data. Get your $USD market update from @JStanleyFX here:https://t.co/2CDNZh2a89 https://t.co/bULXuCaHKk
  • I have this $SPX chart taking over one of my whole screens, and I just keep staring at that 50-day moving average... https://t.co/R9LQAuL2DL
  • RT @TheStalwart: Nice chart, which shows why countries in green on the perimeter, like Iran, Peru, and Turkey are known for their stability…
  • Selling pressure strengthening in Wall Street two hours before the close. S&P 500 down roughly 1% intraday, the largest decline since August 18th #trading $SPX $SPY
  • One of the strongest correlation with Bitcoin at the moment is the US 10-Year Treasury yield https://t.co/uZBzJ7yiXf
  • Aside from the rising uncertainty in China over Evergrande default risks, two central bank decisions will dominate the market theme next week. Get your market update from @JMcQueenFX here:https://t.co/5xXv7IDLxE https://t.co/gHCO4B7Cql
  • RT @BrendanFaganFx: 79 counterparties take $1.218 trillion at Fed's fixed-rate reverse repo $USD $DXY https://t.co/VaQdVJrXCz
  • While the #AUDUSD downtrend seems to have tentatively resumed already, the reasons for it to continue that are described here still look valid https://t.co/4i8LAW2ISz
  • Looking at the moves in the #DollarIndex and #gold in the days after US CPI this week, @tastytradeRyan, @victorJ0NES and I were on to something here... Bring on #FOMC! https://t.co/msk67privX
Momentum and Moving Averages

Momentum and Moving Averages

Walker England, Forex Trading Instructor

Talking Points:

  • Moving Averages Help Traders Determine the Markets Prevailing Direction
  • A Series of Moving Averages Can Help Determine Market Retracements
  • Traders Looking for a More Sensitive Average May Consider Using an EMA

New to trading? You may enjoy our trading guides

Finding the direction of current market momentum is an important step for trend traders. Moving averages are a unique tool that help traders to just that on a variety of charts and time frames. A 200 period MVA (simple moving average) is often employed for this task, with traders looking to see if prices are currently above or below the average. If prices are trading above the 200 period MVA, the trend and market momentum may be interpreted as rising. As well if prices are below the average, this may be interpreted as a declining market.

USD/JPY, 30 Minute Chart with 200 Period MVA

Momentum and Moving Averages

Often times, one line of reference may not be beneficial to a trader. To get a more complete look at momentum, traders may employ a series of MVA’s. Typical averages include the 20,50, and 200 period MVA’s. While the settings of the averages can be changed, traders should consider having a short, mid, and long term MVA for reference. In an uptrend, the shortest moving average should reside above the mid and long term lines. Alternatively in a downtrend, the short term average should be below both the mid and long term lines.

Interested in Joining Our Analysts, Instructors, or Strategists For a Free Webinar? Register Here

Lastly, once traders are familiar with traditional averages, traders may expand their knowledge base to include other interpretations of moving averages. EMA’s (Exponential moving average) are similar to traditional MVA’s, however these lines are weighted. This means EMA’s are more sensitive to change in present market price than traditional MVA’s. Their sensitivity makes them a great tool for finding short term shifts in momentum on longer term charts.

USD/CAD, Daily Chart with Averages

Momentum and Moving Averages

--- Written by Walker, Analyst for DailyFX.com

To Receive Walkers’ analysis directly via email, please SIGN UP HERE

See Walker’s most recent articles at his Bio Page.

Contact and Follow Walker on Twitter @WEnglandFX.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES