One should always be a little suspicious of all the signals he sees during range, especially if it’s the kind of range that was developing for the past few weeks in the EUR/USD chart. There was a doji candlestick right above the support at 1.1270, and while the pair did move to the upside a little bit, it then fell significantly and headed for the support at 1.1150. I intend to wait and see what will happens when it reaches the aforementioned support – if it breaks below it then the bearish trend continues, but if it forms a double bottom then, I think, we can expect a significant new move to the upside.

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Just as predicted GBP/USD did reach the resistance level at 1.5550 after a short pause while it was testing the resistance at 1.5390. The question is, what happens next? So far I see no indication for a move to the downside, but on the other hand, it’s still far too early to tell. I think the most prudent approach would be to just wait and see what candlestick the pair will form under the resistance level and whether it will break above it. I intend to keep my long positions open for now and I might open new ones depending on whether the pair breaks above the resistance or not.

Federal Reserve Is Flexible On Rate Rise According to Janet Yellen

Janet Yellen made her semi-annual testimony to congress and said that Federal Reserve can be flexible in determining when to raise interest rates, which have been near zero since 2008.

Ms Yellen said that while the US economy was improving, the US employment situation was still fragile.
"Too many Americans remain unemployed or underemployed... [and] wage growth is still sluggish," she said.
She also warned of weaknesses abroad.
"Foreign economic developments, however, could pose risks to the outlook for US economic growth," she told Congress, focusing specifically on a slowdown in China as well as the struggling eurozone.
But she added that efforts to stimulate growth in the eurozone could ultimately help the US economy, and she noted that declining oil prices could provide a boost to US economic output.
In the wake of her initial remarks, US stock markets rose, with the Dow Jones Industrial Average and the S&P 500 both hitting fresh highs.

'Strongly oppose'

This is Ms Yellen's first testimony in front of a Congress that is controlled by a majority of the Republican party.
Many Republicans have questioned the Federal Reserve's choices in the wake of the financial crisis, including presidential hopeful Rand Paul.
In response to questions from US Senator Sherrod Brown, a Democrat from Ohio, Ms Yellen condemned a bill in Congress that would "audit" the Fed - a move that is seen as strongly political, as the Federal Reserve is already audited by accounting firm Deloitte.
"I strongly oppose 'Audit the Fed,'" she replied, adding:"'Audit the Fed' is a bill that would politicise monetary policy."

Is anyone else tired of the EUR/USD range? Is it just me? Because after weeks of waiting I am tired and frustrated and I really wish it would end already. There is nothing more frustrating than range that doesn’t seem to end.

That said, I think there might be a glimmer of hope, because the pair formed a marubozu candlestick on the daily filter chart and slowly started dropping. I doubt that is any indication that the bearish trend is about to continue but we might see a movement to the downside until the pair reaches 1.1240.

Some time ago I mentioned that GOLD had formed a doji candlestick in the monthly filter chart, which was a clear signal that we could expect to see a move to the upside. I am pleased to say that did happen and GOLD started climbing, until it reached the resistance level at 1308. It could not break above that resistance, formed a pair of hammer candlesticks in the daily filter charts and began its descent once again, breaking below the support at 1214.20. Next target is most likely 1150. If GOLD manages to break below that support I think it would safe to say that bearish trend continues.

Inflation in France Turns Negative

France might be the second-largest economy in the eurozone, but inflation in the country turned negative in January, feeding fears of deflation in the eurozone.

Prices fell 0.4% from a year earlier, with energy costs down 7.1% following the drop in global oil prices.
It is the first time in more than five years that inflation in France has turned negative.
Last month, the European Central Bank announced a stimulus programme to try to boost growth and avoid deflation.
Figures released last month suggested deflation in the eurozone was gathering pace, with prices across the currency bloc in January down 0.6% from a year earlier.
The ECB aims to keep inflation near to, but below 2%.

'Worrying' sign

While falling energy costs have provided a one-off cut to prices, the worry is that weak economic growth in the eurozone will lead to deflation becoming entrenched.
Falling prices can be harmful to an economy if it leads to consumers and businesses delaying spending and investment decisions in the hope of lower prices in the future.
The last time annual inflation was negative in France was in October 2009, when it hit -0.2%.
Prices in France during January were down 1.1% from December as a result of winter sales.
Yannick Naud, a French fund manager based in the UK, told the BBC that difficulties in the French retail sector were "worrying" and one of the signs that France's economy might be in trouble.
"Discounting around the Christmas period was much heavier than expected by economists.
"If the retail sector is not doing very well and must rely on heavy discounting in order to sell their goods then it might be a negative sign for the economy."
Separately, fellow eurozone member Finland also announced that its inflation rate had turned negative in January.
Prices were down 0.2% from a year earlier, the first negative inflation figure for Finland since January 2010.

I rarely pay attention to the AUD/USD chart but I shoukd definitely do it more often. I just took a look at it and I noticed that the pair has formed two lovely doji candlesticks in the weekly filter chart, which is a good signal that it is about to begin a correction. It really is a high time for one, I think, considering that the pair is quite oversold. Short-term target is around 0.7880, but I think that we might see it reach 0.8000 in the foreseeable future. I think I might actually open some long positions and keep them open for as long as possible.

USD/JPY could not break below the support at 118.20, formed a doji candlestick on the daily filter chart and started climbing once again. I was expecting that something like this might happen and I did not close my long positions, despite the move to the downside. The next level of resistance is around 120. Once the pair reaches that level I will consider closing or keeping my positions open depending on its behaviour there because should USD/JPY break above that resistance I think the next long-term target is 125.

It is Monday and as it tends to happen more often than not, most pairs are in consolidation on Monday. EUR/USD certainly is. Range has continued for days now and it does not look like it is about to end any time soon. The pair formed a doji and what looks like an inverted hammer candlestick in the daily filter chart right under the resistance at 1.1440, so it will likely fall again until it reaches the support around 1.1340, but I expect it will bounce back after that. Considering that U.S. Fed will releases minutes from Jan. 27-28 FOMC meeting Wednesday I think we can expect some volatility on 18^th February.

Back when I saw that GBP/USD has reached the multi-year support level at 1.4950 I thought that this was a very good moment for correction to begin, because it was highly unlikely that the pair would break below the support so easily. It turned out I was right. Correction did begin and the pair started climbing. It is currently testing the resistance at 1.5400. Depending on whether or not the pair manages to break above that resistance we might see a new move to the upside until it reaches target 1.5550. I wouldn’t be surprised if that happens but I won’t open new long positions before it breaks above the resistance.

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USD/JPY broke above the downtrend line of the supposed triangle it had been forming

in the past few weeks. I was expecting it would make one final movement to the downside before the break out, but apparently I was wrong. I should have heeded those two doji candlesticks in the weekly filter chart, they were a clear indication that the pair was about to start climbing again. All is well when it ends well, however, because I opened new long positions the moment I saw the break out. I think the next target is around 124, perhaps 125, and depending on the circumstances I might not close those positions before the pair reaches said target.

At first I thought that EUR/USD might break the resistance at 1.1350, because it was testing it very stubbornly, but today I am not so sure any more, since it formed a marubozu and a spinning top candlestick right under the resistance. It is likely that the pair will move to the downside again and either continue the bearish trend or form a double bottom and then continue the correction. It all depends on how the pair behaves when it reaches the support at 1.1150. Personally, I think that it’s high time for some proper correction, because the pair is very oversold.

As you probably know, the USD/JPY correction has been continuing for months now and recently it became more and more obvious that the pair has formed a triangle in the daily filter chart. As you can see on the screenshot above, the pair formed a spinning top candlestick right under the downtrend line. Logic dictates that the pair will likely drop one more time, but after that we can expect a break out and the bullish trend is very likely to continue. How much longer all this will take is a matter of debate, so I, personally, don’t intend to open any long-term long positions before I see the aforementioned break out.

The US Non-Farm Payrolls certainly had an effect. The EUR/USD pair could not break above the resistance at 1.1470 and fell over 100 pips. Unfortunately it couldn't break below the support at 1.1320, so I suppose range will continue. It looks like we will have to wait until Monday again for any more substantial changes, as frustrating as that thought might be. At least I managed to open short positions on time after the payrolls, so I could make a profit after all. I decided to close all of them today, however, because I cannot be sure what the situation will be on Monday when the market opens again.

As I thought yesterday, EUR/USD fell to its previous levels, only for range to continue again today. The pair formed a doji candlestick in the 4-hour filter chart and rose again to start testing the resistance at 1.1470, which is clearly indicated by 89 EMA. Personally I doubt the pair will be able to break above the resistance before tomorrow’s US Non-Farm Payrolls, but I will keep my eyes open anyway. Either way, tomorrow’s data is sure to provoke quite a bit of volatility on the market as it does every month so have closed all my positions just in case.

As expected EUR/USD reached 89 ЕМА in the 4 hour filter chart, which coincides with the resistance at 1.1530. The pair formed a shooting star candlestick right under the resistance and, naturally, slowly began descending again. Unless it continues testing the resistance I think it will probably keep falling until it reaches target 1.1370 and he tight range from the past week or so will resume. I am really curious to see what effect the US Non-Farm Payrolls will have on the pair on Friday. I sold again when I saw the hammer but I will likely close any positions before the US Non-Farm Payrolls, it’s just too risky to keep them open.

It looks like correction has begun for GBP/USD. The pair formed a doji candlestick in the 4 hour filter chart, another in the daily filter chart, an inverted hammer in the weekly filter chart and if one takes a look at the monthly filter chart they will notice that the pair has reached a multi-year level of support at 1.5000 and I really doubt it will be able to break below it so easily.All these are very serious signs that correction is about to start, or perhaps even that the trend is about to reverse. Either way, I think this is a good place to start buying again.

Today was another slow day for the EUR/USD pair, during which the narrow range continued. I kept checking the other pairs I have the habit of trading, such as USD/JPY, GBP/USD, etc. but the situation in their charts is similar and I have essentially been sitting on my hands all day. Unfortunate experience has taught me that opening new positions out of boredom is a poor idea and that patience is a virtue for every trader. The good news is that later this week the US non-farm payrolls will come out and that event will surely provoke some much needed volatility on the market.