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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, Sunday May 2nd to Monday the 3rd of May 2011 and the week and month ahead.
APRIL 2011 REVIEW: From last month’s forecast,
“The U.S. Dollar is no longer perceived as a safe haven and those that piled in looking for safety will soon find themselves flat-footed and scrambling for the “door” to unwind those positions when key levels (77 area) gives way...Bottom line, in order to make those PIPS this month we will be looking for more U.S. Dollar weakness to start the month that should accelerate into a major USDX decline that should be evident by the end of the month.”
Sentiment was too complacent on the U.S. Dollar and that pretty much summed it up, have to take an A for that call.
MAY 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 from the ides of March soon found themselves flat-footed and scrambling for the “door” to unwind those positions when another key level of 75.5 gave way for good and was retested, failed and continued its decline sending many dollar denominated pairs on extended long runs. I still look for the downtrend to continue if not accelerate in the month of May. The 73 area could still produce a bounce 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. A decisive breakdown from a symmetrical pennant below 75.5 with the USDX now at 73.0 and an eventual pattern projected TARGET of 67 (coincides with a PFF SELL target of 66). What a shock!! Entries into U.S. Dollar denominated longs is again recommended for longer term positions. Therefore, look for continuation entries into AGAIN >>> U.S. Dollar denominated longs on any USDX strength this month for both scalp and longer term positions. Again, 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.
WEEK AHEAD: The Dollar stopped again near 73.0 on the USDX with small bounces and each subsequent bounce becoming smaller and smaller, although I believe we are due for a rather strong bounce soon to scramble shorts, so nothing is a gift here and current 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. Witness a weekly PPO SELL signal with a daily SELL getting extended >>> 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?$USD.
The EUR is the inverse of the USDX and with the backdrop of a PPO that now has triggered a daily BUY signal against a weekly BUY signal extended from the 50-day moving average, and the bounce here looks to continue after a pullback and now look for some bottom action on lesser time frames to enter and go long. Now look for support to go long EUR/USD with support at 1.45 and 1.50 that can be seen in short order, as can be expected on continued future dollar weakness as seen in the chart here, http://www.stockcharts.com/charts/gallery.html?$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?$XBP.
The JPY was overbought as USD/JPY and a pullback has occurred as expected from these extreme levels although key levels will be defended at all costs with newly printed yen so a nimble sell as below in daily trade can be played although range bound trade near/between the 50 and 200 day moving averages is expected for the time being as seen on the chart given here http://www.stockcharts.com/charts/gallery.html?$XJY.
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 deeper pullback to 1.075 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 throughout the week with more reports later in the week. They are:
1. Mon. May 2, 2011 - (10:00am EST) US ISM Manufacturing PMI.
2. Tues. May 3, 2011 - (12:30am EST) AUD Cash Rate and RBA Rate Statement; (4:30am EST) UK Manufacturing PMI and; (6:45pm EST) NZD Building Consents.
3. Wed. May 4, 2011 - (2:00am EST) GBP UK Nationwide HPI; (4:30am EST) GBP UK Construction PMI; (8:15am EST) US ADP Non-Farm Employment Change; (10:00am EST) US ISM Non-Manufacturing PMI; and (6:45pm EST) NZD Employment Change and Unemployment Rate.
4. Thurs. May 5, 2011 - (4:30am EST) UK GBP Services PMI; (7:00am EST) UK Official Bank Rate; (7:45am EST) EUR Minimum Bid Rate decision; (8:30am EST) ECB Press Conference, US Unemployment Claims and CAD Building Permits; and (10:00am EST) CAD Ivey PMI.
5. Fri. May 6, 2011 - (4:30am) GBP UK PPI Input; (7:00am EST) CAD Employment Change/Unemployment Rate; and (8:30am EST) US Non-Farm Employment Change and Unemployment Rate.
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 UK and Japanese bank holidays.
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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