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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 Sunday the 22nd to Monday the 23rd of August 2010 and the week.
We are still looking 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 coinciding with the 50-day moving average. The start of another leg-up in the USD looks possible taking it through the 83.4 as consolidations (the 82-83 range in the USDX) often appear in the middle of the move where a quick move to the 84-85 area is now expected. In addition, the USDX has broken out of the declining trend channel (from the June 7th high of 88.71 to the August 5th low of 80.08). This can be seen in the USD daily and weekly chart here http://www.stockcharts.com/charts/gallery.html?$USD. Place your trades accordingly. All charts courtesy of www.stockcharts.com.
The declining action in the USD can also be confirmed against the advancing action in the EUR as mirror images of each other and the EUR looks poised to start another leg down, perhaps undercutting the 50-day moving average to the 124 to 126 area. I expect this decline to be shallow and brief. The EUR chart can be seen here http://www.stockcharts.com/charts/gallery.html?$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 consolidation 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?$XJY.
The GBP is hanging on a cliff, as seen here, http://www.stockcharts.com/charts/gallery.html?$XBP, and is at the 200-day MA and would be expected to bounce here if not for the expected strength of the USD and weakness of the EUR. 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, although a move to the 153 area is now expected in the short term.
There are some reports that I note this week that could factor in some trading sessions going forward. They are:
1. Mon. Aug. 23, 2010 (11:00pm EST) NZD Inflation Expectations.
2. Tues. Aug. 24, 2010 (8:30am EST) CAD Core Retail Sales
3. Wed. Aug. 25, 2010 (8:30am EST) US Durable Goods Orders.
4. Thurs. Aug. 26, 2010 (8:30am EST) US Unemployment Claims.
5. Fri. Aug. 27, 2010 (4:30am EST) UK revised GDP.
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 EUR/USD in the 1.271-1.272 area with a STOP @ 1.2684 and a TARGET of 1.2781 for 60 PIPS. Note: Should the 1.2684 area be taken out then a continuation move to 1.2606 and even 1.2465 can be expected and should be traded accordingly with a 30 PIP 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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