Financial markets often promised a huge opportunity for individuals. Foreign exchange market was the biggest of all, and is the closest to the ideal of perfect competition. However, it seems that stories of losers have overcome the successes. The concept of making lots of profits by trading in financial markets is very simple. If you trade in the same direction as the price, you will have profit. Therefore, forecasting is very improtant to become successful in trading. In this paper I will use the technical approach, which is the study of market action through the use of charts. I will present the concept of trend, which developed from the Dow Theory in the second chapter, along with moving average. The concept of trend include definition of trend, top and bottom, impulsive and corrective movement, continuation pattern, and reversal pattern. The moving average will be use as confirmation. I will apply those literatures to analyze past movement of EUR/USD currency pair. There are two main goals from writing this subject. First is to proof that the market has a pattern or trends and did not move in random. Second is to find out how effective this technical study by downloading the date until counting the range and duration of the trends. The results and discussions will be presented in chapter four. I picked seven major tops and eight major bottoms, which result in fourteen rallies. The envelopes produced eightheen signal but four of them were bad signals. Six out of fourteen good signals were able to identify the rally in the early phase, seven in the middle phase, and one in the later phase. After completing each step, we can see that forecasting can be done by using technical nalayis alone. I also come to conclusion that EUR/USD is at correction phase of its major uptrend.





Research Location : PT. Askap Futures



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