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.

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
EUR/USD
Mixed
Oil - US Crude
Bearish
Wall Street
Mixed
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Bullish
More View more
Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 100.00%, while traders in EUR/JPY are at opposite extremes with 67.24%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/ynTWWAOg90
  • Commodities Update: As of 14:00, these are your best and worst performers based on the London trading schedule: Silver: 0.15% Gold: 0.11% Oil - US Crude: -0.23% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/mGonw6VUtN
  • Indices Update: As of 14:00, these are your best and worst performers based on the London trading schedule: US 500: 0.21% Wall Street: -0.35% FTSE 100: -0.94% France 40: -1.21% Germany 30: -1.23% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/Doo7fWrpDf
  • Markets have digested the realization that the rollout of the vaccine campaign does mean an immediate solution to the current economic and social problems. Get your market update from @HathornSabin here:https://t.co/6L1lXf8W82 https://t.co/29E7PkyyaV
  • The $DXY continues to hold above the psychological level of 90 and is testing around 90.30 this morning. $USD https://t.co/ZoLnf9pCDE
  • Germany 30 IG Client Sentiment: Our data shows traders are now net-long Germany 30 for the first time since Dec 11, 2020 when Germany 30 traded near 13,135.60. A contrarian view of crowd sentiment points to Germany 30 weakness. https://www.dailyfx.com/sentiment https://t.co/uMIVmW3vUW
  • ECB's Lane: - If favorable financing conditions can be maintained, maximum amount of asset purchases may not be necessary - Recent intensification of pandemic represents a significant downside risk, requires continuation of various fiscal support measures #ECB $EUR
  • ECB's Elderson: - Impact of the crisis on the European banking sector has yet to be fully revealed - Consequences of Brexit still need to be dealt with - It is "high time" to complete the EU banking union through institutional/regulatory architecture, deposit insurance #ECB $EUR
  • Italy's coalition Democratic Party (PD) wants Conte to resign and guarantees support for him as head of new government - PD Lawmakers $EUR
  • $NZDUSD is back above 0.7200 this morning, trading near one of January's key levels for the pair. $NZD $USD https://t.co/WIsB7K8Zus
The Building Blocks of Forex Scalping

The Building Blocks of Forex Scalping

Walker England, Forex Trading Instructor

Article Summary: 2013 has brought a directional shift in the AUDUSD. Traders can look to incorporate momentum analysis to identify short term direction prior to scalping.

When talking about currencies pairs, it is inevitable for someone to ask if they should be buying or selling. This is always a great question, and I insist the answer lies in the direction of the trend and price momentum. Below is a prime example on the AUDUSD 4Hour chart. Below we can see price advancing as much as 253 Pips through Januarys high at 1.0597. Now price has retraced from its high, and has declined as much as 301 pips through today’s price action.

Knowing this, should we be looking to buy or sell the market? One way we can further refine our outlook on the market is to continue our analysis by blocking off a 30 minute chart.

Learn Forex – AUDUSD 4Hour Trend

The_Building_Blocks_of_Forex_Scalping_body_Picture_2.png, The Building Blocks of Forex Scalping

(Created using FXCM’s Marketscope 2.0 charts)

AUDUSD Building Blocks

One way to identify short term momentum is to divide the previous week’s trading into two trading Blocks. This technique is designed to see if there is continued short term momentum, in the direction of the trend to present price action. They key to this analysis is that both Block 1 and Block 2 should be heading in the same direction to ensure that we are spotting a strong trend before finding scalping opportunities.

Below we can see the current AUDUSD 30 minute chart divided into two pricing blocks. Block 1 begins on Wednesday the 30th and runs through Sunday the 3rd. Block 1displayed strong downward momentum as price declined as much as 114 pips. Block 2 displayed the continuation of the downtrend as price again moved to lower lows. To help aid our analysis, both blocks have been painted red to indicate this continued downward momentum. As price momentum continues lower, Forex day traders will be looking for opportunities to sell the AUDUSD.

Learn Forex – AUDUSD Building Blocks

The_Building_Blocks_of_Forex_Scalping_body_Picture_1.png, The Building Blocks of Forex Scalping

(Created using FXCM’s Marketscope 2.0 charts)

It is important to notice that price has already cascaded through the Block 2 low. At present prices our current price block will also be painted red upon closing. Scalpers can take advantage of this move as momentum remains strong to the downside and attempts to move to lower lows. Traders will finally watch the standing high at 1.0357. A break above this point would indicate a short term reversal and potential momentum shift on the AUDUSD.

---Written by Walker England, Trading Instructor

To contact Walker, email instructor@dailyfx.com. Follow me on Twitter at @WEnglandFX.

To be added to Walker’s e-mail distribution list, CLICK HEREand enter in your email information

Would you like a customized curriculum to walk you through Trading Education?

Take our Trader IQquiz and receive a full lesson plan with numerous free resources to expand your information arsenal.

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

DISCLOSURES