The IMPORTANCE of Individual Currency Stories

Part of my daily routine is to make sure I keep the pulse of the individual currency stories that I am basing my trades on.

For the most part my book continues to rely on the AUD weakness, along with the CAD and NZD. However all there comm-dolls are not equally as week, in fact, most of my emphasis is on the AUD and CAD.

In this week’s video I discuss the USD’s strength – despite the stall at the daily resistance area – and that I will begin to look for more opportunities to sell the EUR and CAD against it. One of the headaches regarding the USD is that 85.00 on the U.S. Dollar Index is still resistance and the daily – while having plenty of bullish momentum – is still not in an uptrend so follow-through is more reliant on optimism on jobs and expectations of Fed action come September.

So the question is: Do you know YOU’RE individual currency stories? What are the weaker names that you can trade against stronger ones? Is the strength seen on the chart or is it more fundamental?

For example, as much as the BOE, ECB, and I think also BOC will be adjusting trader expectations, the USD is also going to be forced to discount strength into September. Because of this I like long positions in the USD/CAD, and short positions in the EUR/USD and GBP/USD.

In this video I also discuss the tricky nature of technical analysis in the forex market. That is at 28:50. Remember that since data feeds can account for different opens, highs, lows, and closes – it will also effect the way your indicators are plotted across your charts. e.g. moving averages

Around the 32:30 mark in the video I also discuss a solid summer reading list for those of you looking for that. In fact, I’d love to hear what some of YOUR favorite trading books are and even books that may not be strictly trading related, but have made an impact on your trading.

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