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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 Tuesday the 12th to Wednesday the 13th of October 2010.
The swing trade for yesterday’s Asian-London-U.S. session to SELL the GBP/USD did not fill at the price levels given but we were able to make adjustments to entry in the Live Forex Trading Room to gather several decent PIPS as the TARGET was hit. Don’t miss out on more PIPS!!! Join today.
UPDATE ALERT!!! “Monster Trade” With the EUR/USD now around 1.398 I recommended Scaling In SELLS (0.1-0.2 contract at a time) on strength in the EUR/USD in the 1.394 to 1.402 range as now a deeper pullback is expected short term. Note: while the shorter term retracements in the 1.388 was HIT, and 1.350 areas can be aimed for with an outside shot at 1.333, when adding or positioning on EUR/USD strength, should these other targets not be hit by next week and we are not stopped out, a consolidation could be expected before the next leg of the dollar collapse begins and positions will be pared. Keep that in mind when initiating new positions. Expect increased volatility, but positions can still be added at this point all the way up to 1.402 with LOWER STOPS now in the 1.408 area. The rationale is given below. NOTE: All position trade stops are HARD stops, NOT mental stops. Remember, hard stops for overnight positions, mental stops for day trades.
About Scaling In
“Scaling In” simply means breaking up the initial entry position into multiple parts and deploying them at selected intervals, instead of firing the entire trade magazine all at once. The only reason we might resort to scaling is if we have good reason to believe our expected support zone may have become obsolete. We usually take an initial position in our expected support zone with a fairly tight stop. Obviously if we get stopped, we were early to the trade. Early is just another word for “wrong.” If stopped, we reassess and adapt to the new market reality. If we were not early, and our position shows us that we are right, then we add to that position once the trade has managed to “prove” itself by advancing out of the support zone box, raising our trailing/trading stop in the process. The two or more portions make up a full position. When we speak of scaling, it means we have become willing to break up the trade entry into two or more parts, with the first part at the very top of the expected support zone and the second part within it. Rarely will we ever take a new position outside our expected support zone.
ALERT!!! A DOLLAR COLLAPSE IS ON HOLD. A POSSIBLE REVERSAL TO UPSIDE IS EXPECTED IN THE USDX. CURRENT LEVEL OF 77.0 EXPECTED TO HOLD AND 78-80 IS EXPECTED TO BE RETAKEN SOON. THE ULTIMATE USDX TARGET OF 71 IS NOW DELAYED AND EXPECTED BY DECEMBER.
Note: Another full blown crisis is brewing in the revealing fraud that is the US mortgage market and should crush US banking system. Yes, it is expected to become very serious and should provide the catalyst for the expected dollar decline into December, for now the lamestream media is ignoring it, hoping it does not surface before midterm elections...will they succeed?...stay tuned.
Again, another example of the time period of history we are currently in as shown by global elites, the most incompetent and corrupt in world history. As expected, no material change has come out of the IMF or G7 meetings. It will be devalue as usual, except for the trotting out of US Federal Reserve Officials heading for the microphones in an attempt to stop an outright collapse of the US Dollar. So we get the privilege of seeing the very same people who brought us Money Printing 101 in the form of QE and have given every reason for market participants to fully expect another round of QE2, the sequel, now suddenly shifting gears and acting as champions of frugal monetary policy and warning us about the dangers of excessively low interest rates…another joke. That is why we went net neutral for the US session anticipating that these fine men of integrity, the twisters of the truth will release such truth in the form of the minutes of the FOMC press release – and then, explain it away. It is best to avoid the predicted choppy PIP losing environment. Regardless, the little staged drama act served to push out a few shorts in the Dollar before collapsing again. Again, I have one thing to say here...GOT GOLD?
The euro’s test of the 1.40 level against the U.S. dollar seems to have held but the downside could be limited. The euro’s test of the 1.40 level against the U.S. dollar should be used as a trigger to trim long positions and initiate short ones, as given in an earlier forecast that the ECB will start talking EUR down against the 1.40 level. While I am still expecting some kind of correction that will cool things off and provide the next buyable dip in dollar denominated pairs it could be more shallow than anticipated and if I am wrong and the train continues to run from here, then I will reassess and change positions. Interestingly, the dollar index is also testing an uptrend line from the 2008 lows. A break below this trend line will signal a likely retest of the 2009 lows in short order (and next the 2008 lows) in the 71 area. A successful bounce from this trend line could send the dollar hurtling right back to the 80.0 area in the USDX or even the 200-day MA resistance which is the rationale for the “Monster Trade” and the more expected Head and Shoulder neckline underside retest. However, the USD selling just continued without an underside retest, but now we must be positioned for the possibility of that retest as well as a potential dollar collapse should the 76-77 area give way. The daily close-up shows once again how important the 200-day moving average (DMA) is in flagging the next major direction for the dollar as seen in the USD daily and weekly chart here http://www.stockcharts.com/charts/gallery.html?$USD. The EUR pairs were expected to be overall weaker than the corresponding correlated GBP pairs however there appears to be rotation of relative strength between the two currencies from day to day. The EUR is now at key weekly and monthly pivot resistance and a decline or consolidation at the least is expected before the advance is expected to resume, as seen in the chart that can be seen here http://www.stockcharts.com/charts/gallery.html?$XEU. In summary, the minimum retracement to 1.351 with a possible 1.333 should be in the cards. Loading up is recommended as given in the “Monster Trade”. Place your trades accordingly. All charts courtesy of www.stockcharts.com.
The GBP seems to be in a minor corrective phase but is still in bullish alignment with the 50 and 200-day moving averages as seen here, http://www.stockcharts.com/charts/gallery.html?$XBP, and traders should take a wait and see approach although a trading range is expected it could be fast and be ready to jump on either way if it moves.
Traders should still use caution should the JPY pairs be traded for the time being, although the JPY can be nibbled on in this region as a reversal looks impending, as seen on the chart given here http://www.stockcharts.com/charts/gallery.html?$XJY.
On the commodity currency front, the Aussie looked on the verge of collapse but then reversed the reversal and looks like it wants to make a run towards parity with the US dollar. For now it looks to be consolidating in typical boring AUD/USD fashion. While it would seem that the longer rally from 0.877 to 0.991 needs a correction of depth as making 0.935 a potential downside target once the reversal top is confirmed, a consolidation is just as likely to relieve an overbought condition on the daily and weekly, at this point. Longer term, eventual parity with the USD is the expected minimum for the AUD/USD and AUD as seen here, http://www.stockcharts.com/charts/gallery.html?$XAD, is hanged up at recent highs.
Most of this week’s key reports are towards the end of the week. They are:
1. Wed. Oct. 13, 2010 (5:30am EST) UK Claimant Count Change.
2. Thurs. Oct. 14, 2010 (8:30am EST) US PPI and Unemployment Claims and (8:30am EST) CAD Trade balance.
3. Fri. Oct. 15, 2010 (8:30am EST) US CPI, Retail Sales and Consumer Sentiment.
The swing trade for today’s Asian-London-U.S. session is to BUY the GBP/USD @ 1.5814 with a STOP @ 1.5784 and a TARGET of 1.5914 for 100PIPS.
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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