It’s been far too long since the last time I updated this blog. It’s high time I get back in the swing of things(i.e. posting here more regularly). Hope you’re all having a good trading week so far, 3 more days to go! 🙂
Today, I wanted to share with you all my pick for Chart of the Day which is EUR/GBP. Though there were some significant moves from other currency pairs, when looking at the overall picture(trend) and doing my analysis, I decided that EUR/GBP was my so-called ‘favorite’ of the bunch. All of the GBP crosses moved well, which was due to the economic data that was released in the wee hours of the morning. UK inflation rate dropped to 1.6% from 1.8% in July. It is the goal of the Bank of England(BoE) to have inflation at 2.0% so, anything below that equals bad news for the GBP. Like I’ve written seemingly countless times before, keeping track of economic news is so important as the sentiment of the market can change in a blink of a eye at times. The market was in a rolling trend until the news came out so, yeah, always be aware of economic data releases.
Ok, so let us take a look at the chart:
The pair rose a little over 100 pips over the course of a seven-hour period. It may not seem to be as extravagant a move as a few other pairs like GBP/USD or GBP/JPY but the pip value of EUR/GBP is roughly $1.65 per pip, which I think is a pretty awesome trade for a 100-pip move.
So, any questions..comments for me? Feel free to leave a comment here or send me an email anytime and I’ll get back to you as soon as humanly possible. 🙂 Have a fabulous day!
Hi friends! I’ve finally got my computer up and running again. Yay!
So, I just wanted to give you guys a quick rundown on what’s been happening in the market today. After a week of a significant amount of movement by most of the currency pairs, the market has consolidated the past 2 days. Let us take the example of GBP/USD:
If you look at the chart, you may think see that there was movement and the opportunity to make some money if you traded this, but overall the pattern is erratic. Four hours down, two hours up then some consolidation, 2 hours down again. Making trades such as these are very risky and if we decide to get into one, we must remain vigilant due to the fact that it may change direction at any given moment. There are always opportunities to make money in FX but we must know when to take or pass on a trade. When the market is in consolidation mode and there are no solid short term trends in place, it is so easy for your investment to disappear before your very eyes if you are not careful. Remember that we must see what is on the charts and not what we want to see and always keep our emotions in check while trading.
There hasn’t been any really big news out this week so far to drive the markets but as I always say, we must keep on top of our economic data. Coming up tomorrow, we need to look out for these important newcasts:
CAD: Housing starts
USD: FOMC Meeting Minutes
AUD: Unemployment Rate
We never know how much impact these data may have on the market. At times it can be quite dramatic, at other times, it hardly leaves an impact. Always be prepared for the unexpected.
Just wanted to give you a rundown of some important economic data that I promised yesterday I would fill you in on.
German Business Climate(EUR): This is info on the sentiment of the German business index which has declined to it’s lowest level in 26 years. It indicates that Germany is still knee-deep in its recession which is stated as the worst since WWII. Exports are down and as a result, more jobs have been cut and production has been scaled back.
U.S. New Homes sales unexpectedly rose to 337,000 units, up 4.7% from January. With existing home sales and new home sales up, it is a good sign but it doesn’t necessarily indicate that the housing market is ready for an upturn.
Durable goods data also unexpectedly showed a rise in demand for computer, defense equipment and machinery. The 3.4% increase is the most significant gain in over a year, as it was expected that there would have been a decline of 2.5 percent.
Surprisingly, none of this information helped move the markets dramatically today. The trends have been erratic for a few days now, making it harder to pinpoint when significant movement will take place. Seems like everything has either stalled or retraced some of its former progression. It is to expected as nothing will go up or down forever and everyday won’t be absolutely fantastic for trading. Last week and the week before, many of the currency pairs were skyrocketing. EUR/USD rose over 11 points, it is now consolidating. GBP/USD went up about 10 points before stalling….the same goes for EUR/JPY. NZD/USD and AUD/USD also had good runs of their own, gaining more than 7 points in that timeframe. So, like I said before…this pullback/consolidation period is to be expected, even if it may be at times, unpleasant.
Happy Tuesday everyone! Hope you’re all having a wonderful day so far.
It’s been quite interesting, the way the market has behaved today. It’s in pullback mode. All the currency pairs that have been trending up have decided to switch courses today. Who knows how long the retracements will last, could be for a couple of days…you never know but it’s wise to be prepared for a change. What goes up, must come down…we must always keep that in mind. Even I have to remind myself sometimes because sometimes being overzealous can backfire.
Here is one currency pair you should keep an eye on: EUR/GBP as a sell. It has been down the past 4 trading days or so and I expect that it will continue to decline for at least a few more(days).
As always, keep on top of your economic data. Tomorrow’s vital data includes: Speech by the Reserve Bank of Australia(RBA) Governor, German Ifo Business Climate(EUR), Durable Goods Orders(USD), New Home Sales(USD), and Current Account Balance(NZD). These indicators can drive the market so be aware of the time they are released and watch the market reaction to the news. I plan to write a rundown on these items of information tomorrow so, look out for that. Also, don’t forget to check in on my Twitter updates…whatever I’m watching and doing that related to Forex, I post there. You can read them in the sidebar on the bottom of the page, subscribe to my Twitter accounts RSS feed, or just read the updates from the direct link . And finally, you can email me with any comments or questions…I’m always open to communicating with my blog readers! 😀 Speak with you all soon,
Happy Monday everyone!
The market has been relatively quiet today, for the most part. Of course, there has been movement but nothing significant that warrants great excitement. If you are a swing trader and you have been trading, for example, NZD/USD since March 19th, you have continued to be profitable on your investment. Therefore, the best trades out there today are the ones that should be held over a period of 2-5 days or so. It isn’t so surprising that nothing amazing has happened, there hasn’t been much major news out today to drive the FX markets. U.S. existing home sales data was released and showed that sales rose 5.1% but that prices were down 15.5% from January. This information doesn’t give us much to be hopeful about but we will have to see what tomorrow brings, right?
So, I want to share with you guys the currency pairs I will be looking at for potential buy and sell positions.
BUY/LONG: EUR/JPY & NZD/USD
SELL/SHORT: GBP/AUD & USD/CHF
Also, an update for EUR/USD: This pair seems to be in a period of consolidation and doesn’t know which way to go at the moment. Let’s keep an eye on it to see what happens next. There may be a significant short term move in either direction within the next few days. As always, check on your economic info everyday. It’s so important!
Hope you’re all having a great day! 😀
Today, the FOMC met and decided to hold the interest rate stable at 0.25%. As a result, the US dollar fell dramatically which caused pairs such as EUR/USD, GBP/USD, AUD/USD to rise rapidly. USD/CHF and USD/JPY plunged just as quickly. As I mentioned yesterday, some very vital data was due to be released today which could have had a massive impact on the market. This is exactly what happened and what a happy day it has been! Imagine gaining a bare minimum of 200 pips during the course of an hour…isn’t that amazing?
Look at this chart of EUR/USD:
That fantastic long range candle indicates that between 11am and 12pm PST, EUR/USD rose 300 pips! I got in about 15 mins after it started but I made a cool 100 pips in about 15-20 mins before exiting the trade. Didn’t want to be greedy, you could never be sure how long these trades will last, it had gone up so much already.
Isn’t it obvious that the proof is in the pudding? Economic data is so crucial in Forex trading. It’s not just about following the charts, we need to know what in going on in the countries’ economies, which is what we are trading in the first place. It’s not just know what it happening but knowing why it’s happening. I cannot stress enough how important it is to keep abreast of economic data every day.
Preview for tomorrow: An update on the progress of EUR/USD. Is it making a longterm trend to the upside?
Today hasn’t been a big day for news but I just wanted to give a quick rundown of a couple important economic data that were recently released.
USD: The U.S. unemployment rate rose to a record 8.1%, the highest in 26 years. There are now 12.6 million jobless Americans, as 651,000 jobs were cut in February. It is expected that by the end of 2009, umemployment will be over 10%.
CAD: Canadian housing starts dropped 12% in February, its lowest level in 8 years. With the slumping economy, it is expected that the number will continue to decline as it has done so for the past 6 months.
As I’ve said in the past, it is imperative to stay on top of economic data because it helps us in our decision-making when it comes to which trades we will make. These data allows us to understand in which ways a country’s economy is prospering or failing. It is never wise to trade blindly–without know why certain things are happening in the market.
P.S. Don’t forget to read my post on Chart of the Day! :]