Degree of Trading Difficulty

In the recent months, the level and degree of trading difficulty had increased right after the acceleration of the Yen's value to its strongest level and not to mention the increase in investors interest in the precious metals and obviously the oil prices reaching its historical highs.

The price levels achieved within the 1st quarter of the year across the board have been a historical trading event. With the continuing US dollar on the defensive low in spite of the remarkable recovery from the economy including the unemployment figures has not helped these continuing efforts led by the quantitative easing from the Federal Reserve.

We do believe that with all these economic surroundings, a more political atmosphere has dampened the financial markets especially the foreign Exchange where the market price behavior has been more influenced by institutional players and not much of the real main street investors. Having said that, what is left of the retail investors are just being caught-up in between market movements. Although, the main street retail trading the FX market is plain and simple. Short-speculative trades in between profitable pips, get out and re-enter. And the cycle does not stop from there.

And the more favorable pairs that offers such scalping opportunities can only identified with a couple of major pairs such as the EURUSD and the USDJPY. Amongst the cross rates would undoubtedly be the EURJPY and the GBPJPY. And these pairs were indeed favored from our previous market view analysis for the week of March 29, 2011. The continuing rally of these pairs have far exceeded our expectations. With the EURJPY trading at its current levels of 119.78 and the GBPJPY at 135.97 respectively. This just goes to show how strong market sentiments are and no amount of fundamentals would alter the current trend. Of course, with some corrective daily movements would be made as it rallies from the previous low levels that they came from.

The EURGBP chart formation has been more defined ever since its major support price has been established at the 0.8330 levels and never looked back thereafter. Although, there were several attempts made to break lower from the 1st two weeks of February 2011, it failed thereafter and headed higher slowly. Reaching a high of 0.8852 extension and currently at the 0.8809 as of this writing.