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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 and week past and view on the market for the month of April, Monday May 30th to Tuesday the 31st of May 2011 and the week and month ahead.
MAY 2011 REVIEW: From last month’s forecast,
“… in order to make those PIPS this month we will be looking for more longs against the U.S. Dollar on another bounce to mid-month that should continue into a major USDX decline by the end of the month.”
Well the bounce did occur and lasted longer than expected but now looks to be rolling over as sentiment was too bearish on the U.S. Dollar and needed to unwind by trotting out more of the same “EU has problems” story. That pretty much sums it up, have to take a B for that call.
JUNE 2011 FORECAST: This is what was expected as the U.S. Dollar is no longer perceived as a safe haven and those that piled in looking for safety will again soon find themselves flat-footed and scrambling for the “door” to unwind those positions when another key level of 75.0 gives way for good. I look for the downtrend to continue if not accelerate in the month of June. The 73 area bounce was weak and this weeks’ news and rate events could provide another opportunity to short the U.S. buck and add to longs on any USDX strength. We are still, longer term, completing a decisive breakdown from a symmetrical pennant below 75.5 with the USDX now at 74.8 and an eventual pattern projected TARGET of 67 (coincides with a PFF SELL target of 64). What a shock!! Entries into U.S. Dollar denominated longs is again recommended for longer term positions. Therefore, look for continuation entries >>>
WEEK AHEAD: The Dollar stopped again near 75.3 on the USDX and current dollar denominated longs should be managed with new entries on defined zones as a fast move to 74 is possible set to resume followed by a collapse to as low as 72 and 70 and 67 from any strong bounce. Finally, in the broader context, the monthly chart shows that the rising trend line that is now broken. Still on a weekly PPO BUY signal with a daily BUY rolling over fast >>> why we use stops. Enter to go long U.S. Dollar denominated pairs into some retracement zones, as seen in the USD daily and weekly chart here http://www.stockcharts.com/charts/gallery.html?$USD.
The EUR is the inverse of the USDX and with the backdrop of a PPO that now near triggering a daily BUY signal against a weekly BUY signal and the bounce here looks to continue after a pullback of sorts expected at the 50-day Moving Average and look for some bottom action on lesser time frames to enter and go long. Now look for support to go long EUR/USD with support at 1.421 and 1.40 and resistance at 1.50 that can be seen in short order, as can be expected on continued future dollar weakness as seen in the chart here, http://www.stockcharts.com/charts/gallery.html?$XEU. Place your trades accordingly. All charts courtesy of www.stockcharts.com.
We are STILL in an expanding megaphone pattern on the GBP daily attempting to break out to get to 170. Good for some nice PIPS last week but now it is in an area that should fall back some to allow new entries. A new PPO daily BUY against the backdrop of a new weekly BUY signal makes cable playable on pullbacks, LONGER TERM THIS CHART LOOKS BULLISH. Make cable a long play on shallow pullbacks, as seen here, http://www.stockcharts.com/charts/gallery.html?$XBP.
The JPY was overbought as USD/JPY and a pullback has occurred as expected from these extreme levels although key levels will be defended at all costs with newly printed yen so a nimble sell as below in daily trade can be played although range bound trade near the 50 and 200 day moving averages is expected for the time being as seen on the chart given here http://www.stockcharts.com/charts/gallery.html?$XJY.
No other recommendations on AUD yet but still watching for a deeper pullback to 1.055-1.065 or more consolidation before it moves to possible 1.13 - 1.15 on a that safe-haven bid as a long entry as seen on the chart given here http://www.stockcharts.com/charts/gallery.html?$XAD.
This week is rate policy and report heavy spread with Bank Holidays throughout the week with more reports later in the week. They are:
1. Mon. May 30, 2011 - US Memorial Day Bank Holiday.
2. Tues. May 31, 2011 - (9:00am EST) CAD BOC Overnight Rate Decision and Rate Statement; (10:00am EST) US CB Consumer Confidence and; (9:00pm EST) CNY Chinese Manufacturing PMI.
3. Wed. June 1, 2011 - (3:15am EST) CHF Retail Sales; (4:30am EST) GBP UK Manufacturing PMI; (8:15am EST) US ADP Non-Farm Employment Change; (10:00am EST) US ISM Manufacturing PMI; and (9:30pm EST) AUD Retail Sales and Trade Balance.
4. Thurs. June 2, 2011 - (ALL DAY) EU & CHF French/German/Italian/Swiss Bank Holiday; (4:30am EST) GBP UK Construction PMI; and (8:30am EST) US Unemployment Claims.
5. Fri. June 3, 2011 - (4:30am) GBP UK Services PMI; (8:30am EST) US Non-Farm Employment Change and Unemployment Rate; and (10:00am EST) US ISM Non-` Manufacturing PMI.
Banks facilitate the majority of foreign exchange volume. When they are closed the market is less liquid and this can lead to both abnormally low and abnormally high volatility and chop...so...There is no swing trade for today’s Asian-London-U.S. session due to US Bank Holiday. Have a well deserved Memorial Day Holiday and rest.
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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