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GreenForexTrading.com
ForeX-tra Gr€€n
Hello Everyone,
In this email I am going to give you my view on the market for the Asian/London sessions in the market for today, spanning Monday the 28th to Tuesday the 29th of June 2010.
The swing trade for yesterday’s Asian-London session to SELL the EUR/JPY in the 110.7-110.8 area with a STOP @111.04 and a Target of 110.10 for 60 PIPS actually never stopped out in the London session and collapsed to as low as 109.7 in the early U.S session giving as much as 100 PIPS if you held on through some serious chop and depending on how you managed the trade all the way through the U.S. session. Not an easy ride indeed. We went long the GBP/USD in the Live Trading Room thinking a reversal was eminent after key levels were hit, and while we gained more PIPS I watched in amazement as the EUR/JPY continued its descent while the GBP/USD advanced. For normally even loosely correlated pairs to behave in such a diametrically opposed fashion portends many stranger things to come in these markets.
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The chop continues for many I am sure in brutal fashion. Position trades spanning more than one day are preferred in this environment. These trading environments usually presage a new direction or upcoming powerful move and so the markets will try to shake as many players out before the real big move comes, whatever that may be. Be advised and extreme caution is warranted. The USD’s weekly closed under our key pivot of 87.0 and after a very weak bounce is now near the bottom of the range near 85.0, as seen in the USD daily and weekly chart here http://www.stockcharts.com/charts/gallery.html?$USD. Another advance above 87.0 is no longer predicted but a break below is expected only with a chop in this range for some time but could knife through it later this week with key manufacturing and employment reports due. The retrace expected so far has been feeble at best with only an exact 38.2% Fibonacci retrace to 86.42 after which a resumption of the new USD downtrend seems to have started and be expected to continue. Should the 86.42 level be broken to the upside then a move to 87.4 is expected. Extreme caution is warranted in this range as a breakdown could occur on such persistent weakness and would be very hard to play until the chop drops and allows a low risk entry, perhaps at the top of the range at 85.5-86.5 area. Either way, volatility gets another boost and we should start thinking about initiating core positions on any USD strength to play its eventual weakness.
In terms of technical considerations in the EUR/USD, two potentially bullish situations are taking place. From a weekly long term standpoint, the main trend is down, but the currency was able to pierce through a retracement zone at 1.2164 and now above the 1.233 area. The main intermediate term trend is now up and a move to and eventually through the 1.245 – 1.246 pivot area is expected. The question of whether a significant retrace occurs appears to have been answered with a somewhat feeble 38.2% Fibonacci retrace down to the 1.222 area earlier last week. The U.S. data continues to be abysmal from a strong currency standpoint. The prior EUR/USD 1.1876 – 1.232 range is now support and a break back to 1.217 is now discounted; although a retrace of some significance was expected, it looks less likely with each passing day. The continuation of a 2 - 3 week rally with the 1.278 region the next potential upside target area. In summary, the weekly chart is set up for a strong retracement rally to 1.2784, with the Euro holding a test of a minor interim retracement levels so far. The topping action in the USD can also be confirmed against the bottoming action in the EUR as mirror images of each other and the EUR chart can be seen here http://www.stockcharts.com/charts/gallery.html?$XEU. We will play both ways with a long bias; anticipating trades back to defined retracement levels. Place your trades accordingly. All charts courtesy of www.stockcharts.com.
The JPY broke above the 200-day moving average; after bouncing hard at the lower 50-day moving average and look to continue a short term uptrend maybe giving a clue to the USD expected retracement continues to power higher but caution is advised as it could just as easily top out here leaving you flat-footed and PIP less, as seen on the chart given here http://www.stockcharts.com/charts/gallery.html?$XJY. The GBP as seen here, http://www.stockcharts.com/charts/gallery.html?$XBP, also looks to accelerate after clearing its 50-day MA which also coincides with the 50% retracement of the prior April-May decline. A solid break above the 148.1 area set up the GBP for a quick pop to the 150.5 level and continues to be expected to move to the 155 area in short order.
There are no reports of significance to trade through today and the bulk of reports to trade through occur later in the week might offer up more USD weakness and a potential break of the critical 85 area with potential fireworks for a fast break move.
There is no swing trade for today’s Asian-London session.
That's it for today. Remember that I trade in the Live Forex Trading Room between 1am-6am Eastern Time. I will be hosting my regular 3-4 hour session and assessing and exploiting PIP opportunities as they arise.
Enjoy trading and good luck everyone!
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Risk Warning! Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. All information posted on this website is of our opinion and the opinion of our visitors, and may not reflect current situations and occurrences. Please, use your own good judgment and seek advice from a qualified consultant, before believing and accepting and acting upon any information posted here or on this website.
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