A Constructive Approach

Forex Trading: The USD is the best trade even before & after the fact.

The responsibility of a currency strategist through the course of trading the currency market is to establish a well constructive analysis to overcome a certain degree of trading difficulty during market uncertainty. In addition, coming up with a rational and conclusive market outlook to spot a high probability trade potential or where a price range breakout could possibly occur before the fact.

The latest scheduled economic reports ending the weeks of the 3rd & 10th of May can be considered as a classic example. Where market conditions have squeezed price action between currency pairs contrary to market sentiments that have caused a mix price reaction before and after the reports. A string of data followed during the release of a negative Chicago PMI figure have initially drove the USD lower, which in turn then was contradicted by a more positive Non-Farms Payroll followed by the 5-1/2 year low for the Jobless claims report that fueled a price reversal for the USD to move higher. The sequence of reports have kept most analyst at bay and tried to dissect the full effects of these reports while monitoring price action.

However, with the USDx retesting its primary resistance @83.50; the threat for higher risk aversion comes into play whenever trades made after the event of a price breakout and a subsequent follow-through has been made.

Therefore, a constructive approach can be followed in the event that such trade set-ups could be identified not only on a fundamental or technical stand point, but by comparing price activity among majors and crosses with actual market sentiments before and after a major event.

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