Tagged "bernanke"

12-17-09

Email update: Server upgrade for signals is complete, but it has to be phased in for reasons out of my control so about half of you should have received an email letting you know there was a new signal, and about half of you didn’t receive anything. Almost everyone should get tomorrow’s signal and everything will be working smoothly by this weekend I promise :).

4:40a GMT – If you braved the news the yesterday’s signal yielded you good pips – no matter which trading idea you used (sell at 1.4580-1.4600 or sell on break of rising support) all targets would have been hit for over 100 pips. I did open 1 short on the initial jump to 1.4580 and took profit on first lot but second was stopped out at break even for no profit/loss.

Dollar gained heavily against the Euro yesterday, establishing a new low of the quarter amidst Bernanke’s words that the job situation was stabilizing. Traders see job data as the key factor in determining when the Fed will begin raising interest rates, and coupled with the positive non-farm payroll data from a week ago this makes rate hikes much more likely in the early part of 2010. Does this mean the dollar will continue gaining until next year? Of course not. The market will attempt to find a ‘fair value’ price for the pair. And in that fair value the Euro has the advantage because its interest rate is already higher than the dollar’s.

Daily Outlook: I am bearish below 1.4600 and will look for good areas to short around Fibonacci levels.  I expect to see a pattern similar to what we have seen over the past week where we have a long bearish flagpole followed by hours of bullish consolidation. As I mentioned before I am conservative in these thin-markets before the end of the year, so if I miss a trade there will always be another one.

Trading Idea: Shorts preferred below 1.4600, looking first at 61.8% fibonacci retracement around 1.4500. From this level short targets are 1.4455, 1.4420 and 1.4385. If 1.4500 is broken to the upside look for a re-challenge of 1.4600.

(click to enlarge)

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12-8-09

4:44a GMT – Before we get to today’s forex signal, have you heard that expression before, “circle the wagons”? As far as I know it is an early American expression from a few hundred years ago when the early US settlers were moving west across the Great Plains of the country. They didn’t get along so well with the Native Americans and when they would attack the settlers would circle their wagons in a defensive position to help fight off the attack. We saw a similiar defensive move yesterday as bears attempted and succeeded in consolidating their gains below former trend support which signals a short trade on the day.

Though the  EUR/USD is giving us some short directional signals, fundamentally I believe this USD rally will be relatively short-lived as long as Bernanke signals no action on raising USD interest rates. He again talked about USD strength yesterday but so far that is all he has done – talk. His actions have supported a weak dollar and as long as risk appetite is in the market that signals further dollar weakness against the higher-yielding Euro.

Daily Outlook: That being said, I’m primarily a technical trader and the short-term trend is down. We had a huge 200+ pip drop on Friday, the break of rising trend support that has held for the bulk of the year and bears were able to hold and consolidate some of those gains yesterday. With that in mind I will be looking for a signal to sell near resistance around 1.4900.

Trading Idea: Shorts preferred in resistance zone of 1.4900 with candlestick confirmation. Tight stops, targets at 1.4865, 1.4830 and 1.4780.

(click to enlarge)

Forum Signals: Did you know PipHut has new user forums? Below are some interesting items brewing over there – feel free to jump in, participate and learn! Post your own charts, get feedback on trades, learn new systems, you name it! Stuff happening right now in the forum:

1) We had guzz4geez accurately predict the AUDUSD drop when he spotted a head and shoulders pattern on the AUDUSD charts – link
2) David continues to chronicle his mad scalping system for the EURUSD M1 charts – link
3) Remy found a textbook example of a fibonacci retracement – link

In short, for more signals, more interaction and more learning make sure you are checking out the forums!

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11-17-09

5:14a GMT – For those of you (myself included) who had sell entries yesterday at 1.5015 we just barely missed that level (or at least my broker did) by a razor-thin 0.5 pip. That was followed by an almost immediate 60 pip drop. This was of course after Bernanke’s speech, as many of you commented on yesterday, sent the EUR/USD into a frenzy. For those of you that are curious the comments that supposedly triggered this panic were fairly mundane:

“Today, financial conditions are considerably better than they were then, but significant economic challenges remain. The flow of credit remains constrained, economic activity weak, and unemployment much too high. Future setbacks are possible.”

He is not really telling us anything we didn’t already know – the only surprise here is how the market reacted. Which makes me think this could just be a stop-squeeze in illiquid markets during news.

Daily Outlook: Nothing in the technical picture actually changed since yesterday, as you can see in the graph below so it is business as usual. Because price action did advance quite a bit I am moving up my entry a little (closer to the 1.5050 resistance) to get a better risk/reward ratio.

Trading Idea: Still looking to short above the 1.5015-1.5050 resistance area, though now I will look for an entry higher up, closer to 1.5050 to get a good risk/reward ratio. Targets from 1.5050 are 1.5015, 1.4980, 1.4950 and 1.4915.

(click to enlarge)

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