USD Continues Decline Spill over Across the Board

Early European session have pushed the USD index below the benchmark support @95.05 and have reached a new session low @94.68 as of this writing. As of March 04, 2016 our market insight have indicated a probable low that was briefly described as follows:

MARKET REWIND FOR USD INDEX AS OF 3.04.16
Although, the session prices with the USD reacted positively the overall strength have fizzled out and lost steam as the new month may prove to be a top heavy for such a price recovery without the real momentum in spite of the good data from the NFP. Meanwhile, the strength of the Aussie Dollar have reached above the 0.7400 levels which have validated our trade call from our previous post analysis below which happens to be an effective trade analysis well in place that may probably make a follow-through by the coming week.

UPDATE: DXY @94.68 LOW AS OF 3.17.16

The continuing decline of the USD is in line with the USDJPY reaching a low @110.68 which resulted to the spill over effects and price action with the European majors. Adding to the recent price recovery are Oil & Gold likewise resuming their upward direction which have placed a serious cap on the USD. With a weaker USD, this would provide further lift for commodities as well and included here is the AUSSIE Dollar being a commodity related currency that has proven to be on the same trajectory moving higher currently trading @0.7605 with a high price @0.7650 in early US trading session. Thus, turning trade positions into a Value Investing Strategy. However, playing it with caution; watch for session pullbacks by Friday being the end of the week's trading towards the closing session.

EURO Rallys On ECB Draghi

@MegaTrade101 Ride a Continuing Trend!

When USD softens on a pullback the AUDUSD will continue its trend. But today's statements from ECB Mario Draghi have brought such disappointment of not delivering what was expected have provided a nice bounce back higher for the EURO near the 1.0900 and drove the 1st decline for the USD @98.62 session low. Its was the Euro's turn to shine back into the spotlight until Friday's NFP #'s.

Euro Chart on Cloud

The market reaction where more correlated with the European majors and crosses but not as much as with the Asian currency pairs and their relative cross rates. Media highlights were so centered on a more active move from the ECB, as they were all expecting a 'shock & awe' with the ECB transparent guidance on addition more stimulus was really played out well to their advantage. But still got the awesome rally of the EURO.

Thus driving the initial decline for the USD along side disappointing bearish US reports leading to an even lower price touching 97.60 basis point. Meanwhile, the spill over effects on CABLE were relatively milder with a modest bounce @1.5155/60 levels.

The direct effect on the Euro were affected with short-covering rallies have added to some decent profit-taking for previous trades taken the past week. The market were pretty much mix after the price swings brought about from the press conference.

TRADE SEQUENCE ll: SCALING UP Positions

"Ride a Continuing Trend"

The following series of trades are best defined with almost all respective positions on the AUDUSD, AUDJPY SGDJPY are in place; the next objective is to protect those gains by watching the reports real well this week.

Any sudden resurgence of the USD index higher above the 100.39 previous 1st high and 100.31 20d high would result to a pullback lower on the AUD and the SGD respectively. However, for as long as the overall secular market sentiments remain in favor of the USD, the degree of price recovery may well be in check. The Asian currency choice was pre-determined as the best probable choice compared to the European majors underlying negative / bearish sentiments. 

TRADE SEQUENCE ll: SCALING UP Positions

CCY Corner: EURO / USD

The kinds of statements ECB President Mario Draghi makes dictates the tone of the Euro as the weaker outlook for the region have again pushed the common currency back towards and below the 1.1200 levels. And this has supported the US Dollar briefly as market sentiments have found bulls a valid reason to stay positive as the US - DXY have stayed within its current levels and formation. However, the focus would be the data on Non-Farm Payrolls would take over the spotlight as data survey has been favorable and would lift the USD whenever it beats market expectations. 

CCY Corner: EURO / USD

Insight: Does it still follow: Buying the Rumor or Selling the Fact?

Which side would you take now?

Now that we have received the actual Greek confirmation on default after the fact, does it still follow the famous saying of 'buying the rumor and selling the fact; as far as the Euro vs. USD is concerned? Well the obvious answer to this question came before the fact when Euro prices opened in Asian trading session with a opening price gap lower and then made such rebound thereafter.

Market price action and its behavior is equally as important and a proven applied strategy for most traders and strategists that have experienced such market activity during high risk events. In this particular case coming from the European majors. A sequence of analysis were provided in preparing how the markets would react with the probability of price pullbacks on a decline and recovery from their respective opening levels. Although, not all currency pairs had similar patterns due to the level of volume trading activity. A process of deduction do takes place where the least probable effects on the other pairs would be more or much less than expected.

Understanding the market price behavior relative to the behind the reason of such movements can make or break the difference. As the shifts of investors funds from unwinding positions and creating new ones would have to be segregated by carefully watching VOI on futures since spot FX does not carry the full blown report compared to other broker dealers that report their respective in-house trade volumes which may not define the true value of worldwide trade positions coming from the delayed CFTC COT report. Thus, this is also where 'alternating trade strategies' should be considered while defining the risk relative to their respective rewards especially from a top heavy USD still prominent market sentiment remains.

With that said, the market now is well within the start of the 3rd quarter trading. For MegaTrade101 actual reading thereafter; that a new phase has started taking a cue from how technical charts have been created from the actual trading price configuration. This week's price action relative to what the results on Greek's referendum results are to some respect has been priced in the worst possible case scenario. That brings us back to a lesser market activity in search for the next catalyst that can support another round of prices moving in both direction..

@MegaTrade101, we must have been doing something right!
Thank You very much. As of June 30, 2015 update.

In effect, Megatrade101 is now in the process of adjusting positions to unload and carry-over towards the 3rd quarter of 2015.. For the time being it is our traditional trading break and would like to express the honor of being able to provide / share our significant trading journey this 2nd quarter. As a majority of our loyal constituents and clients have benefited from these few but well defined pairs. 

Not to mention, our viewers who have been able to take advantage of some of our information to better their bottom-line figures as this is our own way of providing an independent, unbias market analysis while in search of the right trading information resources. These sequence of analysis described has been our best performing end-result for the month of June 2015 as evidenced from our blogspot data alone: not including the reviews from our website.

Initial Price Reaction: EURO Overlay DXY

BRIEF COMPARATIVE ANALYSIS: EURO VS US DOLLAR INDEX (DXY)

The red line chart indicates the DXY weekly range as prices have recovered by above the 96.00 basis point with an opening gap @96.30 similar with the EURUSD at the Asian opening session @1.1005, respectively. 

EURO vs. US DOLLAR INDEX As of June29, 2015 Asian / Early European Trading Sessions

Applicable Tech Tools: Donchian Channel, Andrew's Pitchfork, MA - Exponential, Candlestick Theory, OHLC Price Range Parameters, Stochastic RSI, Price Gap Theory

EURO Opening Gap in the Asian Trading session & filling the Gap towards the European and US Trading sessions. Initial reaction on the Greece weekend report 

Such price gap would have a corrective move and or an equivalent of a pullback opposite the opening price levels, which is currently doing as of this writing. Daily session turn-overs would provide traders to recoup the price difference of the opening movements as it moves to even out losses or gains made at the Asian trading session. Expect the same volatile reaction from fundamentals as it changes every trading day in the next few days activity.

 

These price action provides a chance to get out of the area of an extended price move and resumes by the end of the period. With the daily candlestick formation is well within ts projected confined triangle technically defined pattern of consolidation thinning out at the end of the apex point. Meanwhile, the market will always find a way to move within the dame incremental range of a session and goes back to where it came from by the end of the day's session in the US market. 

This will be part of the 2nd quarter trading activity MegaTrade101 would be undertaking before our trading break by the first week of July's trading week.

Q&A Session: Video / Audio File: Inform & Educate

In a series of Q&A; we were asked this question:

Q: What is the most effective application to use or measure a price change on a rebound or decline? And how to Project a price call?

A: There are a few effective methods to approach this kind of trading scenario that we can best be applied, namely summarized as follows:

First (2) logical steps to this approach:

1. Define the market condition on the fundamental and technical stand point. Fundamental means when and how the next risk events would affect price action; while on the technical is how the trade-setup looks in its configuration. Select best time frame between the Asian, European and US Trading session.

2. Identify benchmark price levels as price point reference for the corresponding resistance and support if prices are confined within a specific range bound price movement. Or a particular chart pattern can likewise be recognize.

Video & Audio File Version

How to Avoid the School of Hard Knocks in Currency Trading

CCY Corner - EURGBP Contrary-Trend Strategy

The Asian financial markets opening prices for the Euro's decline reflected the Greece election victory of the leftist Syriza better known to be anti-austerity group. The Euro started off with a lower opening price @1.1145 with a low apparently reaching @1.1095 where short-covering price action are now seen. With a seesion price recovery at the early European session working @1.1250. A normal price swing seen as the initial objective has now been achieved.

This has been a similar price action with the EURGBP cross with an opening price @0.7425 While Cable held steady at the same price level in Asian session. This is to no surprise that price reactions after the lows would we find a reasonable corrective move especially coming from over extended levels on both the European majors.

CCY Corner - EURGBP Contrary-Trend Strategy