The consumer confidence Index practically gave some investors a reason to switch to a safer haven again by buying more of the US Dollar compared with the British Pound and the Euro; prompting a huge corrective movement of the Pound from the high of 1.6742 to a low price level of 1.6382. These kinds of swings are what most traders in the FX market really has to avoid. Although, not a lot of them were expecting such a big drop of more than 300 pips from the high. But this is more than enough to trigger stop loss orders on the GBP and Euro / US Dollar. Currently, the EUR / USD is at the 1.4076 levels from a low price of 1.4000 slightly higher bottom from the previous 1.3982 set on the 29th of June.
Wild swings are still expected, but we still view a ladder formation on the upside as new highs will be attempted every now so often until the full leg is done. However, these wider and volatile trading ranges may not be suitable for some FX traders because of the tolerance levels that they are willing to take does not have enough elbow room for floating a substantial loss.
The EUR / JPY has more of a profit potential than trading straight major pairs as it goes towards the 140.25 high levels. However, any newer higher than this price would create a weekly divergence that may cause a drawback which maybe good to buy now and when the next setup occurs on the selling divergence; take your gains and time your reverse order to sell thereafter.
Be extra careful on the timing and entry for it may create momentum instead of a exhaustion. Make some adjustments to any tolerance levels for the 1st week of July may still be a rapid market.
Good Luck and Happy Trading !
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