Considering what just transpired in the Foreign Exchange Market with the key major currencies have made more dramatic when the ECB decided to hold such interest rates increase as of the moment. the cause and effect of such interest rates hikes would have been untimely. Rate differentials amongst major countries are taken into consideration especially with most of the Asian Pacific Region countries gradually increased their rates while the Japan and the United States have kept its stance as a way to assist a flagging economy. Keeping it where it is now have prompted a timely US Dollar recovery which have given some breathing room for market sentiments to shift its course, making price adjustments for the majors to correct itself from these events.
The second consideration is the continued increase on margin requirements for the precious metals where increase in open interest have been building up for the past several months. Based on the Commitment of Traders reports that most major participants were indeed institutionals and for those unwilling to accept the requirement had no choice but simply to settle such existing positions that led to the major corrective movements in Gold and Silver in particular. Paying close attention to the Volumes and Open interest would determine any probable shift in money flow and drastic measures on technical momentum would be reflected on the price behavior.
With that said, the Technicals and trading strategies have to be in place during these critical times of market conditions. such as the description of an effective strategy that would apply in these conditions.
Technicals:
From our previous market view analysis as of May 03, 2011; the confirmation of the GBPJPY & EURJPY heading lower was made after the above reports on the ECB was released. This was the fundamental factor that have caused the recovery on the US Dollar which was the main interpretation of the market. Prior to this decision the almost all of the 1st and secondary target levels have been achieved. Starting with the USDX at the 72.70bp low, Euro at the 1.4880 with extensions at the 1.4938, the EURGBP cross rate at the 0.8900 and extending to the 0.9040 just to name a few. Such target levels where obtained in sync with the market behavior prior to the two major reports for the week. And this also coincided with the new month of May signaling a major correction within a major trend. Price reversal do occur whenever such market price objectives are attained on a given period of time. which apparently the majors did.
For a complete report, including trade plan, market view analysis and execution pls. visit our website: www.megatrade101.com
No comments:
Post a Comment