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GreenForexTrading.com
ForeX forX-tra Gr€€n
Hi everyone,
In this e-mail I am going to give you my review for the month past and view on the market for Monday the 20th to Tuesday the 21st of December.
The swing trade for THIS WEEK to SELL the EUR/USD in the 1.3220 area did not fill and is now scratched; please read below.
I expected a short pullback early this week and then a grind higher in the USDX. The pullback would shake out some weak positions before the holiday march higher took place. This did not happen as the 80.5 level was broken again. That action has negated the rational for this week’s swing trade. I typically do not trade much going into the holiday season and New Year. I may put on a small position with a tight stop if I like what I see forming on the charts, but that would likely be about it. Light volume can be very dangerous to trade because sharp price spikes up or down can occur in a blink of an eye catching traders off guard. The USDX is now at the line in the sand with any sustained move above 80.5 that could possibly lead to further strength to the 82 area. The 80.5 area is the key area to watch this week for any signs of a continuation move and further weakness in US Dollar denominated pairs or a reversal that takes hold and will lead to breakouts of many currency pairs after some period of consolidations. We are now in the crux of the holiday season and several fake-out moves can be expected this week and next so position size and stop placement can become an art-form in this environment so caution should you decide to trade this week is advised. That being said, let’s look at the charts. The USDX has carved out a very range bound by the 200-day moving average (DMA) and now 50-day M.A. and looking for the next major direction for the dollar as seen in the USD daily and weekly chart here http://www.stockcharts.com/charts/gallery.html?$USD.
The EUR moved higher into stiff resistance at the 1.3500 level but look for a test of the underside of the 50-day moving average at 1.37 now that another pullback to the 1.32 area has happened. The key 1.442, 1.495 and 1.600 areas are expected to be seen longer term (should Ireland, Portugal and Spain hold it together). The EUR chart seen here, http://www.stockcharts.com/charts/gallery.html?$XEU, is showing areas that are now on a sell signal but is close to new PPO daily BUY signal after a 38.2% retrace level has been tested. Place your trades accordingly. All charts courtesy of www.stockcharts.com.
Recent sterling strength has given way to weakness on Dollar strength. The GBP is now neutral also bound by the 50 and 200-day moving averages and a PPO daily BUY signal against a weekly SELL creating a wash and rinse scenario for the foreseeable future, as seen here, http://www.stockcharts.com/charts/gallery.html?$XBP.
Traders should continue to use caution should the JPY pairs being neutral also bound by the 50 and 200-day moving averages and a PPO daily BUY signal against a weekly SELL creating a wash and rinse scenario with a slight downward bias for the time being as seen on the chart given here http://www.stockcharts.com/charts/gallery.html?$XJY.
On the commodity currency front, the Aussie looked on the verge of collapse but then reversed the reversal and looked like it wanted to make a head and shoulder top on the daily but was invalid ... this is the currency towatch. Like the EUR, heavy, choppy consolidation, could be over as the range is broken, most likely to the upside. The AUD is seen here, http://www.stockcharts.com/charts/gallery.html?$XAD
This week is very light on data reports and policy/rate decisions so expect thin trade. They are:
1. Tues. Dec. 21, 2010 - (7:00am EST) CAD Core CPI; (8:30am EST) CAD Retail Sales.
2. Weds. Dec. 22, 2010 - (10:00am EST) US Existing Home Sales.
3. Thurs. Dec. 23, 2010 - (8:30am EST) CAD GDP; US Core Durable Goods Orders and US Unemployment Claims; and (10:00am EST) US New Home Sales.
4. Fri. Dec. 24, 2010 - Bank Holiday.
There is no swing trade for today’s Asian/London/U.S. 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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