Tuesday, June 30, 2009

The Strength of the Pound

The persistent bias of the Bristish Pound has continued its trend following movement inspite of the corrective moves it did from the previous week. The up and down swings were relatively wider as many particpants experienced. And this author is one of them. The 1.6180 - 1.6207 has proven to be quite a good support price from the previous week. The 1.6742 new high currently established is a minor resistance. We are foreseeing a ladder formation upwards as a continuation for the near term.
On the corrective movements, whenever a given signal coincides between the 4 hourly chart and the weekly chart of the pound that may well mean that another upturn is in the making. Although, the real potential for the GBP / USD is quite substantial, the market may not give the opportunity to take a bigger slice of the next leg up, unless one has to have quite of a bigger tolerance levels. Meaning that whenever a position is taken, it would have to sustain a floating loss that may trigger any stop loss orders. This happens every now so often if such stop loss orders are within the range of the days' high and low; expect that it will simply take such orders. Avoid creating this opportunity for the market makers / dealers to simply grab such orders and later would continue with the trend.
Watch the market attentively and please avoid unneccessary loses in between trades!
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Note: When you click on the featured chart, it will direct you to our website which is under construction at the moment. However, click on " Market View " and it will direct you to the analysis report as of the 30th of June 2009.
Thank you and Happy Trading!

Thursday, June 25, 2009

Lookout for Intervention

It was the Swiss National Bank that came into the picture and surprised everyone when the bank saw that the strength of the USD / CHF were being heavily crossed with the USD / JPY. At the time of the intervention the price levels were dealing closest to its second lower bottom at around the 1.0629 levels.. The surprise move was just in time where most of the major participants were caught flat footed that the bank realized that it was time for them to come in and drove the prices at around the 1.1019 high and is currently working at the levels of 1.0938 as of this writing.

The initial objective is still 1.1380 which was our previous market view report dated the 8th of June 2009 in our website. This just shows the resiliency of the US Dollar strength in our previous blog on the 18th of June. It is on its way to the price resistance and may probably extend beyond the 82.35 psychological market price. The projection is in line with the time table that we have stated that it may be able to achieve this target within the next few weeks towards the 3rd quarter movement of the year.

With the prices of gold and oil supporting the positive out look on the dollar; plus the better than expected durable goods orders that came out, the USDX is really on its way up North with some corrective movements along the way. The USD / JPY may soon follow once some of the major players would opt to settle their heavily crossed positions against the USD / CHF.

In another scenario , the EUR / GBP cross would be favorable to trade where the potential of gains is much higher and more identifiable from the chart formations. Please see comparative chart analysis between the 4 hour and weekly EUR / GBP charts in candlestick bar.


The market view is a matter of analysis regarding market conditions and should not in anyway be considered as recommendation to buy or sell any foreign currency for that matter. Investors should consider their financial conditions and should consult a financial adviser before engaging in the Foreign exchange market.

Good Luck and Happy trading!

Thursday, June 18, 2009

The Resiliency of the US Dollar

With the recent good report of the housing sector, the outlook on the economy looks a bit better from the 1st quarter of the year. Topping it off, the slower stock performance and the rise in unemplyment figures in London added a negative sentiment on the British Pound causing a direct co-relation with the US dollar rise and a corrective move on the Pound as of this writing. As most investors are reluctant in making huge positions when price swings are getting wider on the currency market.

The US Dollar Index has always been the barometer of the strength and weakness of the dollars value among a basket of foreign currencies. The chart shown with this blog already proves that a possible bottom formation has been established from a low price level of 78.33 and the previous closing of 81.19. It is in fact on its way to the key important resistance price of 82.35 that may lead to newer highs for the dollar index. With gold providing more of a support with its prices moving lower to the levels of 940.00 USD; and oil prices moving to the higher directions above the 70.00 USD / barrel. Although, expect some corrective moves along the way.

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As you may have noticed, I would be posting market outlooks and reviews on more particular currencies that may become pace setters before it happens. I would be doing it in between writing and publishing articles so in that way, it would not be too dragging for some following the blog.

Now, there is a link established whenever you would click a featured chart or currency to our website which is still under construction as we go along. There was a need to open it for initial viewing and response due to the market conditions which we wanted to share our outlook in the market with our co-investors and clients.

For your information there will be a better and a much improve site coming very soon.

Thank you very much.

Thursday, June 11, 2009

An FX Traders Mindset . . . Part 1


While trading the Foreign Exchange Market can be exciting to most traders, it is in fact the challenge that faces the traders appetite for risk that makes it more attractive for some who would be willing to accept the loss of funds at a certain degree in exchange for the potential gains that the market offers. However, a traders' mindset through the course of trading experiences could be developed by proper training. As traders and strategist learn from mistakes made in the past. Experience has always been the best teacher. But it is in the correct moves and trades that should be keenly noted on how winning positions were done.


Making the same strategic moves twice or more that delivered the winning results should be noted and kept in place at all times. Although there is no guarantee that it will be the same in the near future. However, if such practice is done more, the probability is greater for a win than a loss. Practise makes perfect, so to speak. It is in the mindset and training on how the appropriate approach is done and repeated. Easier said than done!


A more traditional form is to apply the strategy of eliminating signals that can be deceiving to ones' view point. A clear example is viewing the technical charts on different time sequences, where each chart can show a negative or affirmative direction ( false signals ) from one another. And most of the time, for the trained eye it is clearer for them. But doesn't work for others. The overall summary can be seen on a bigger picture like the weekly and monthly charts provide. This also depends on the type of trader, either a short term or long term trader. On top of it is a matter of account size that needs to be considered as well.


A few combinations of technical analysis maybe quite helpful in eliminating these misleading signal like the price breakouts from a trend or the comparisons of the open, high, low and closing prices for the previous weeks. With the increase and decrease of volumes and open positions in the market it can be defined. This is just some of the ideas set to train oneself while trading specially in the Foreign Exchange market.

An Fx Traders' Mindset . . . con't of Part 1


One of the trading principles to follow is to be able to assess the behavior of the active participants in the market place. These are the very same people, contributory banks and financial institutions that drives the market prices regadless of the trading sessions and sets the price and trading parameters every now so often. This means that every session highs and lows are really not the set price ranges simply because such orders are given and taken out easily when price swings are at play by these traders.


The news that everyone receives are all the same and are delivered through these terminals in a swift and speedy fashion. And provides the traders only split second reactions to the breaking news. The only difference is that the interpretations of others differ from one another, but the trading objectives may vary for each individual trader and investor. This results to price swings that could create some confusion and others would call it as misleading signals. The sudden change of hands and market positioning would affect the prices and relatively make wild fluctuations. As a result, making point spreads or some would say pip spreads become wider due to the rapid change in the bid and ask prices. The increase and decrease in volumes would normally affect price momentum as active participants either settle at a loss or simply take their gains from the market.


It is how a trader would view the market behavior through the price fluctuation. Some other technical tools such as the volume and open interest in the futures market may tend to be more useful for some in analyzing the market conditions. The traders perception may be influenced by the conditions of fundamental factors such as economy or some political policy and interest rate differentials. However, such factors can be affected by the majority of the active and influential players who would have a persistent bias that would also spread amongst the traders themselves. These are cases were everything back swings and turns around causing the market to become a roller coaster and make variable wild trading ranges in a rapid fashion. Just a word of caution, everyone should be extra careful in positioning and trading the market when things get out of hand at times.