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Another solid week in the currency world in my opinion when you compare it to the violet swings of the US stock market and all that is going on in the financial world. We saw the $580 billion dollar Chinese bailout plan, the coming of the G20 meeting today in Brazil, and a proposed major bailout for US automakers. But how did the currency markets fair through all of this?
On the Menu Last Week
This week was a bit more calm than the previous week, which usually bodes better for long term traders. While the EUR/USD only ended with an 11 pip loss, the trading range was larger and created an indecisive doji candle. I’m not sure where this will be going for the next week, but it should be more aparent after the Sunday trading session. Here are the total pip movements for the majors:
Majors
EUR/USD | -267 pips
USD/JPY | -171 pips
GBP/USD | -1089 pips
USD/CHF | +218 pips
AUD/USD | -368 pips
USD/CAD | +579 pips
Looking at what the majors did during the week, one has to wonder when the beating of the GBP/USD is going to end. Folks, this is a brutal run for this pair, with a loss of -2812 pips since October 13th! Well for all of you who were short, make sure you buy the rest of us dinner if we ever meet. Looking at the technicals of this pair, the 1 day charts show that we could possibly see a short term bounce off of these lows, but I’m not convinced that the fundamentals will warrant much more than a dead cat bounce. In my mind, I’m not touching this play; at least until it figures out where it wants to go.
The free forex signals I have been sending out have yielded 6 wins out of 8 signals for a 75% win percentage the way I have played them. I wrote an article about how to best use my forex signals so everyone knows that I’m a get in, get your pips, and get out kinda guy. My plays use 100-150 pip stop losses because it might take a little time to set up these positions. Rarely do these plays go overnight, most are 1-98 hour holds. I currently use my blackberry to close trades if they are in the money and I am away from my trading setup and just want to close it out. I love the digital world.
Next Week’s Specials
I’m going out on a limb and calling this is going to be a fantastic week for me in terms of signals and trading. I’m having an awesome time sending signals and educting those of you who are communicating with me by asking questions dealing with my trading technique. Here’s what I think will shape the coming week:
USD/CHF will have trouble breaking 1.2000
At the end of the week, two huge bull candles for the USD/CHF were accompanied by a swift pull back from resistance seen at 1.2000 that was tested on Thursday. Look for a double top and a possible signal sent out by me for a quick pullback. If this pair is able to break this level, it is likely going to have to wait to push much higher because the 1 day charts are oversold. I really like the pullback at 1.200.
AUD/USD could trend down to 0.6340
Right now the AUD/USD pair is in a bit of a downward spiral. After retracting from a pseudo double-top on the 1hr candles on Thursday and Friday, two large bear candles immediately occured. Resistance levels are a big factor for this pair, and I see it sliding to 0.6340 where it will possibly form a triple-bottom from the November 12th and 13th levels. The perfect storm awaits us here.
Pull Up a Chair Next Week
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Sat, Nov 15, 2008
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