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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 Thursday the 14th to Friday the 15th of October 2010.
The swing trade for yesterday’s Asian-London-U.S. session to BUY the GBP/USD did not fill.
ALERT!!! A DOLLAR COLLAPSE IS ON HOLD. A POSSIBLE REVERSAL TO UPSIDE IS EXPECTED IN THE USDX. THE LEVEL OF 77.0 WAS BESTED AND KNIFED THROUGH AND A BRIEF DIP TO 76.2 TO WASH OUT NEW USDX LONGS AND WAITING FOR SOME BOTTOM CONFIRMATION BEFORE 78-80 IS EXPECTED TO BE RETAKEN AND IF 76 IS BROKEN EXPECT A FAST TRIP TO THE ULTIMATE USDX TARGET OF 71.
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.
In the USD it looks like no support again down here near 77 on the USDX and a drop rapidly to near 76 occurred. Yesterday was more of 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 (or silver)?
The euro’s test of the 1.40 level against the U.S. dollar has given way but looks to be crossed again on the downside. 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. Place your trades accordingly. All charts courtesy of www.stockcharts.com.
The GBP seems to be in a minor corrective phase with a test of the 50-day moving average but is still in bullish alignment with the 50 and 200-day moving averages as seen here, http://www.stockcharts.com/charts/gallery.html?$XBP.
Traders should still use caution should the JPY pairs be traded for the time being, although the JPY can be nibbled on in this region as a reversal looks impending, as seen on the chart given here http://www.stockcharts.com/charts/gallery.html?$XJY.
On the commodity currency front, the Aussie looked on the verge of collapse but then reversed the reversal and made a run at 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 to be exceed for the AUD/USD and AUD as seen here, http://www.stockcharts.com/charts/gallery.html?$XAD, is hanged up at recent highs.
The key report during today’s session is: Fri. Oct. 15, 2010 (8:30am EST) US CPI, Retail Sales and Consumer Sentiment and FED chair speaks....so expect chop.
The swing trade for today’s Asian-London-U.S. session is to SELL the GBP/USD @ 1.6020 with a STOP @ 1.6054 and a TARGET of 1.5898 for 120PIPS.
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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