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GreenForexTrading.com
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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 16th to Tuesday the 17th of August 2010.
The dog days of summer continue. We now look for short term continuation buying in the USD into the 84-85 area were we will look to scale in positions for another reversal heading into September. The key support/resistance and weekly retrace levels in the USDX are 83.38, 84.4 and 85.4 (38.2%, 50% and 61.8% Fibonacci retraces of the prior 88.71-80.08 decline), and the 83.4 resistance level is in play with the 50-day moving average just overhead at 84.0. This can be seen in the USD daily and weekly chart here http://www.stockcharts.com/charts/gallery.html?$USD. Place your trades accordingly. All charts courtesy of www.stockcharts.com.
The declining action in the USD can also be confirmed against the advancing action in the EUR as mirror images of each other and the EUR chart can be seen here http://www.stockcharts.com/charts/gallery.html?$XEU. It is interesting to note on a relative strength basis that the EUR advance has occurred mostly on a decline of the dollar as a weighting of currencies is examined and can be shown by comparing the fact that the EUR still has not reached its 200-day M.A. before reversing while the USD had tested its 200-day moving average. This expressed weakness in the EUR will be the basis for another “Monster Trade” initiation in the future.
The JPY broke above the 200-day moving average; after bouncing hard at the lower 50-day moving average and went ballistic for a while being the anti-dollar and now looks to be in a trending move with a long bias as the 50-day/200-day M.A. are now aligned and are now confirming an uptrend, 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, is at the 200-day MA and has started to bounce here. The fundamental outlook still shows more gain for this currency. But with current USD strength, timing becomes important and remains probably the most resilient currency against USD. The key report in today’s session will be the UK CPI and we will trade pre-report sentiment. The key reports to position trade around are:
1. Tues. Aug. 17, 2010 (4:30am EST) UK CPI.
2. Wed. Aug. 18, 2010 (4:30am EST) UK MPC Meeting Minutes.
3. Thurs. Aug. 19, 2010 (4:30am EST) UK Retail Sales;
(8:30am EST) U.S. Unemployment Claims followed by Philly Fed U.S. Manufacturing Index at 10:00am EST.
4. Fri. Aug. 20, 2010 (8:30am EST) CAD Core CPI.
Traders should be aware of key daily and weekly retracement levels, especially given the thin summer trade
The “Monster Trade” initiation. Waiting for the EUR/USD to top out for a rebound as we will gauge sentiment as the USD flirts with recent retrace and key levels so look for this in upcoming newsletters of what we will scale into. Live Trading Room members will get first crack at these entries with more precise defined levels to minimize risk.
The swing trade for today’s Asian-London-U.S. session is to BUY the GBP/USD in the 1.5640 area with a STOP @ 1.5610 and a TARGET of 1.5700 for 60 PIPS. Note: Mental stops unless you plan to hold through the UK CPI report; if so add 10 pips for a HARD stop.
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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