May 2nd NY Session #2

Funny how I was able to squeeze out a 11 pip profit on a trade that was absolutely discretionary.  I was watching the GBP/USD and it was highly overvalued on the short-term charts with solid resistance at 1.8400.  Even though the pair had reached a new high today, the MACD histogram failed to reach new highs (negative divergence on the 5 minute, not shown below).  The I shorted the pair at 1.8380 with a stop 30 pips above at 1.8410.  Once the pair ran up 15 pips, I set my stop to breakeven.  It ran up as high as 26 pips but started losing momentum.  I was watching for an exit on the 5 minute charts and once I noticed momentum and inertia decreasing, I exited.

15 minute chart below: 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Popularity: 4%

fxcmtr.com Guest Trading Ideas

I still have an account balance at FXCM and therefore am entitled access to their "Trading Room."  The primary feature that I visit on a daily basis is their Guest Trading Ideas section.  Currently there are 8 guests providing trading ideas.  Some guests provide ideas on a daily basis while others come and go as they please (ie: Rob Booker.)  I find some better than others but anything that may show me how others are seeing the market can only be beneficial.  Who are the guests?

1.    John Dean from Currency Insight Ltd
2.    Marius Alexe from Phincorp Capital
3.    Learn:Forex
4.    Jes Black from Black Flag Capital
5.    Black Swan Capital
6.    Jared Martinez from Market Traders Institute
7.    Dynamic Trend Profile
8.    Rob Booker 

I’m going to provide some of their ideas in the coming days so we can all see how beneficial their comments are. 

I’m providing John Dean’s Guest Trading Idea below:

USD/CAD – March 29^th, 2006

Near term USD trends continue to improve with evidence building to suggest an important/cyclical low is now already in place at 1.1300. Previous/notable reactive highs around 1.1800 are targeted next and once this supply level gives way a re-test of the psychological 1.2000 level is anticipated.

 

 

 

 

 

Popularity: 5%

DashboardFX: Forex Weekly Wrap-up

EUR/USD

A virile run mid-morning at the session close, as market participants drove the dollar down to near session lows of 1.1945.  When all was said and done a tight range of 1.1845/1.1955 was fashioned in the major European counterpart and the benchmark currency.

What is interesting to note regarding this week’s price action relative to the previous is that we have two ranges with one large move lower separating them.  That coupled with the cresting off the benchmark S (former R) in the 1.1860 area, which has stymied those bidding the dollar on many occasions in the life of the pair, implies perhaps a solid base pattern of an inverted H&S is in the process of developing with the head all but confirmed on today’s rally in the pair.  The moment of truth for the pattern comes in on the break back into last week’s range followed by a failure to trade through it – thus drafting the second shoulder.  We have cited the major R above as the top end of the shoulder range.

GBP/USD 

Sterling dealers and traders alike have noted vehemently the significance of the MPC minutes slated for next Wednesday.  A prominent reporter in the UK feels an admonishment of a 5-4 split in the minutes could strongly imply a 25bp hike is in the shoe.

As we noted yesterday, “…with such a wide swath these orders clearly have rather lofty targets or expect to average in with size on forays below 1.7340/50.  Irrespective, the activity has garnered attention…” regarding some purported dealer’s activity and it turns out that our summation was incredibly predicative given the proceeding 24-hours of pricing.

USD/CHF 

With no front page news regarding geopolitical unrest, it seems unlikely that the pair will style any type of meaning retracement of the overt trend.  However, we know better to presume the two cannot take place simultaneously, perhaps exacerbating a strengthening in the Swiss franc and weakness in the dollar. 

Some clear top patterns have emerged; but the pair continues to make new highs and the patterns are somewhat eschew.  As we noted recently, “…The drop from the major R we noted in yesterday’s report was rather precipitous and could be ominous indication of more selling pressure to come.  Yesterday daily low of 1.3040/45 will be the moment of truth for those attempting to break the overt trend…” and it seems this statement is rather accurate given the resulting price action.

USD/JPY

The pair continues to rally following our call on the significance of the 1700 figure.  Session highs were recorded at 118.87 following Thursday’s rollover.  It has come in a bit however, leaving a tall wick behind in the vicinity of macro R.  this could be a tell tale sign of some virile selling as specs unwind what have now become very large positions.

Popularity: 3%