Phew, I almost got caught up in a serious fake out! After gapping up to start the week and rising to as high as 1.3096, it almost looked as if the moving averages were going to make a crossover to the top. It’s a good thing it didn’t because I would have gotten stopped and lost!
I’m kinda concerned that I might not get in on another move for a while. The EURUSD just keeps dropping like Obama’s ratings. In fact, my recent EURUSD long isn’t looking too good right now! Boo!!
In any case, unlike the one-directional moves from last week, this week’s price action was a bit more topsy-turvy. Risk appetite made a few attempts to come back as the global economy’s biggest concerns lately, namely the euro zone debt situation and the UK political stalemate, seemed to fade.
Both the euro and the pound enjoyed a few gains during the first half of the week, after the European Union unveiled its massive rescue plan while the UK witnessed the formation of a new coalition government. However, these rallies were short-lived as investors remained unconvinced that these new developments could put an end to their fiscal problems.
An interesting phenomenon this week, as Forex Gump pointed out in his recent entry, was the simultaneous rise of the US dollar and gold prices. At first, I couldn’t figure out why investors were buying up both assets like crazy since they usually had an inverse relationship. But, considering the recent threats to global fiscal stability, I realized that this suggests that risk aversion is at an all-time high.
Now let’s move on to more important things… like my social life! Due to be released this week is Robin Hood, which I plan to watch with a certain someone. I do hope our little date ends up better-than-expected, or else I’m going to get stopped out. Haha, this is what happens when I think about forex too much!