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GreenForexTrading.com
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Hi everyone,
In this e-mail I am going to give you my view on the markets for Wednesday the 6th to Thursday the 7th of April 2011.
With each bounce becoming smaller and smaller in the USDX, a fast move to 75 is now set to resume followed by a collapse to as low as 72 as the USDX is in a zone of weekly support at 75.5-76.5. Finally, in the broader context, the monthly chart shows that the rising trend line that forms the bottom of a reverse pennant formation is now at 76.7 and a retest of that level looks completed and a decisive breakdown from symmetrical pennant to below 75.5 now looks inevitable with the USDX now at 75.5. I am still looking for continuation entries into U.S. Dollar denominated longs on any USDX strength for both scalp and longer term positions. Witness a weekly PPO SELL signal with a new daily SELL in conflict. So look to scale back until to go long U.S. Dollar denominated pairs on any weakness (USDX strength) into some retracement zones anytime this week, although I expect this USDX rally early this week to weaken as the USDX runs into these retracement zones, as seen in the USD daily and weekly chart here http://www.stockcharts.com/charts/gallery.html?$USD.
The EUR is the inverse of the USDX and with the backdrop of a PPO that now has triggered a daily BUY signal against a weekly BUY signal extended from the 50-day moving average, and the bounce here looks to continue and now look for some bottom action on lesser time frames to enter and go long. Now look for 1.45 and 1.50 that can be seen in short order, as can be expected on future dollar weakness as seen in the chart here, http://www.stockcharts.com/charts/gallery.html?$XEU. Place your trades accordingly. All charts courtesy of www.stockcharts.com.
We are in an expanding megaphone pattern on the GBP daily. It now looks like 170 will be on the cards first. The GBP has seen some serious choppy swings and a clear pattern has emerged with a megaphone upper trend-line resistance currently at 165 and rising. A new PPO daily BUY against the backdrop of a weekly BUY signal makes cable playable on pullbacks. Still make cable a cautious play either way, as seen here, http://www.stockcharts.com/charts/gallery.html?$XBP.
The JPY is overbought as USD/JPY and a pullback is expected from these extreme levels although key levels will be defended at all costs with newly printed yen so a nimble sell as below in daily trade can be played and as seen on the chart given here http://www.stockcharts.com/charts/gallery.html?$XJY.
The AUD ended up catching the “safe-haven” BID and was shaken out of a trade only to see it again making new highs. No other recommendations on AUD yet but still watching for a pullback to enter as seen on the chart given here http://www.stockcharts.com/charts/gallery.html?$XAD.
The remaining items of significance this week are rate policy and report heavy. They are:
1. Thurs. Apr. 7, 2011 - (7:00am EST) UK Official Bank Rate; (7:45am EST) EUR Minimum Bid Rate decision; (8:30am EST) US Unemployment Claims and CAD Building Permits.
2. Fri. Apr. 8, 2011 - (4:30am) GBP UK PPI Input and (7:00am EST) CAD Employment Change/Unemployment Rate.
The swing trade for this week’s Asian-London-U.S. sessions is to SELL the GBP/JPY @ 139.3 with a STOP @ 139.6 and a TARGET of 138.2 for 90 PIPS.
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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