The strength of the GBP/USD & the EUR/USD continued through the Asian and European sessions as the price on both currency opened with a gap from the previous closing price last week. This only means that the gap would only be filled-in after the opening price in Asia and the continued assault on the North has been fueled by the market sentiments. Although, it is within the 50% and above Fibonacci levels of retracement; the over-powering and persistent bias of the major market participants weighs heavier than the technical and fundamental economic reports which has been discounted by the market. The initial target for the Pound which is the in the target range of 1.7510 +/- strikes within the 61.8%; if and when the market reinforces itself this will be achieved. For now expect a pause where the flight of capital cash flow may switch over to another currency which we will also metion below. However, do not expect a straight shoot up because the recent comments made by Allan Greenspan and Ben Bernanke was made to tame the US Dollar into a stronger stance by saying that the economy has found new grounds from the recent financial crisis and its on it's way to recovery at the end of the year.
The major trend is obviously bullish and it is quite difficult to anticipate a reversal at this point of time. Never jump the gun unless there are real fresh factors that may say otherwise. Any price lower would put the percentage rate lower on a technical basis to realign the prices and from its over-bought areas. It has proven that the opening gap was a run away prompting fresh new buyers to try to catch a little more than their previous positions.
Watch for the open interest levels where it is becoming very crucial for the major players to simply cash-in their older trades which have made quite a good run. Once this happens a major corrective movement could be a welcoming surprise for the newer open trades which was done today. As mentioned before the 1st week after the end of last month may prove to be more volatile than ever.
- *For the time being, watch the USD/JPY as the alternative pair to trade! That is with an exclamation point. As the monthly chart for this pair indicates an upturn for the US Dollar as a arbritrary hedge against the strengthening of the Euro and the Pound. Although, the PMI ( manufacturing report ) were good for the dollar the movements were not justified, but favored the European pair instead. The next flow of capital investment would the USD/JPY as most investors have cashed-in their gains from the recent rally.
- *The monthly technical would indicate that the next upturn would be made within a couple of weeks from this writing. Any price closest to the 94.66 level is a bargain to buy the US dollar against the Japanses Yen. A leveling off would be at and above the 95.20 level as mid-range support. Any sustainable price above these levels maybe the key price positions that you may want to time in the trade whenever possible.
This is not a recommendation to trade but only a matter of information. There are inherent risk in trading the FX market and investors may consider their financial conditions before trading this volatile market. There will always be a possibililty of loosing your inital investment in part or in whole depending on the market conditions.
- *A clearer explanation and additional charts are posted on our website
:
- http://www.megatrade101.com/ > Market View > Analysis tab
- Good Luck and Happy Trading!
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