Howdy Folks,
EUR/USD continues to fight supply at $1.50 as I discussed in yesterday’s post. I’m sure this supply zone is even more tempting to “top pickers” itching to go short but I wouldn’t count this trend out yet. The fundamentals continue to be mixed. The ZEW Survey indicated weaker than expected confidence among German investors but the data out today wasn’t all bad news which remains a theme in EUR/USD, indecision. IIn her daily column on FX360.com Kathy Lien points out:
“Price pressures continue to fall as evidenced by the downward revision of Germany’s harmonized CPI numbers and the drop in wholesale prices. However that has not stopped ECB officials from talking exit strategies. Monetary policy member Paramo said not all liquidity measures will be needed in the future and the central bank will phase them out in a timely and gradual manner. Data indicates that the global slowdown is bottoming and there are signs that the slowdown in lending has also halted. However Paramo was careful to say that just because the central bank is preparing an exit strategy doesn’t mean that they are ready to implement one.”
At the risk of sounding obvious, EUR/USD could go either way at this point. The supply level at $1.50 has been stubborn, without clear fundamentals the bulls may temporarily give up. On the other hand, paired with Dollar, you could be long a bucket of peanut oil and probably make money right now. Let’s look at the trade from a trend trading, bargain hunting perspective. The daily chart “trend” as measured by my trusty HMA indicator is still biased on the long side, but there is no bargain day. Dissecting price action on a lower time frame, we see that price is not in an overbought or oversold condition as measured by the CCI oscillator. I like extremes to be present before I hunt for a support or resistance based trade therefore I don’t see an opportunity this evening. I’m cheap, I like the edges and I like a good deal before I’ll trade.
Charts below….
More thoughts tomorrow evening, best of luck to you intraday freaks out there!
Ryan
IMPORTANT NOTICE: These comments are for information purposes only. My opinions or other information contained in this post do not constitute investment advice. It should not be understood as a direct recommendation to buy or sell any currency contract or other investment vehicle. Forex trading involves substantial risk of loss and is not suitable for all investors.
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Thanks Ryan. I finally stopped messing around and decided to concentrate on one pair only (as you suggested once on your blog) – the Euro, so happy to see you will be posting about the EUR/USD here. Trying to use some common sense, basic support and resistance, and having some good results on the demo account. Fingers crossed. Never could catch any of the webinars as it is the middle of the night out here in Taiwan, but looking forward to the book very much. All the best.
Hi Peter,
I’m very happy to hear you are doing great on a demo with on currency pair. I think people get themselves into trouble trying to trade too many currencies at once, especially when they are new to the game. In fact, I have a trading friend who just went back to trading only two pairs, and is loving it.
I’m thinking about doing some webinars on a weekend, that would probably work better for you. I’ll post information on this blog as they get closer.
Keep in touch, thanks for the comment!
Ryan