As of our Market View Analysis dated the 3rd of May, the market volatility as we have expected increased significantly just by the price movement of the EURUSD leading the pace moving to the 1.2880 price prediction that we have mentioned and even with a low extending to 1.2803 and currently correcting back from the registered low at the same price levels. There would be some short corrective moves on both directions on an hourly and daily basis, but do not discount the possibility that the prices may eventually touch the all time psychological price levels of 1.2580 extensions. When this may occur depends on the gravity of the market situations on a fundamental basis which so happens to be quite negative on the traders sentiments.
This has been fueled by the two major factors of the European countries troubles with Spain, Portugal and may lead to a spill over from the rest of the EU communities. this also influenced the stocks and lending a more positive boost for the USDX with a high at 83.48 and the June futures contract at the high of 84.48 basis points. the quick and surprising move coupled with the relative good news for the economic reports added to the strength of the USDX and may find some key resistances at the 85.05-10 levels initially. This will only come true unless the significant volume build up on the futures market continues and with a less momentum price acceleration and volume distribution holds, the possible corrective movement may also be expected. As some profit-taking activities are now taking place with a few market capitulation from earlier buyers of the EURUSD and the AUDUSD respectively. In spite of the policy rate increase by the RBA now at 4.25 the strength of the USD has made the Aussie Dollar to head south of the border at the 0.9019 low and the Kiwi resting just on the support trend line at 0.7175 levels. Although, it may still be difficult to state a market trend reversal for these two pairs; we would rather call a price reversal for the time being. Even though with a significant spike bar formations on the candlestick as a technical outlook for both pairs, the price movement was justified with the help and assistance of the USD getting much stronger.
However, the most important element mentioned that the USDJPY and USDCHF did have a much clearer trend higher while all these things were going on. These analysis was supported with our video presentation way back in February titled " comparative charts part 2 for the USDCHF and a later video for the USDJPY last April 05 inital target of 94.40. Its always easier to call when the facts already happened, however as most of the trend analysis has had a higher percentage of being right, but the difficulty is to be able to continually remind that there is no such thing as a straight up or down in a volatile market such as the Foreign exchange trading.
Percentage trading has been proven successful with an appropriate amount of funds to trade with and properly allocating, spread trading and using the leverage amount to equalize or minimize the risk involve.
Meanwhile, the surprising move for Gold down to the $1155.75 low was in part due to the creative selling divergence that was occurring on a daily basis above the $1180.00/oz price levels other than the obvious strength of the USD. We still maintain our outlook on both the USD and Gold on an overall perspective with a directional trend higher including the position adjustments of major players present in the market as of this writing. Have a watchful eye closely for buyers trap as the market heads lower and presents a wider trading ranges with higher market volatility as we go along for the week and the succeeding weeks ahead.
Good Luck and the best only for your trades!
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