At the end of each trading day, I will find what I believe is the best looking short term trade setup for the upcoming trading day. If you're a forex newbie, it can be tricky in the beginning trying to figure out how to look at charts and draw lines. My goal is help you understand the psychology of price movements so you can learn to analyze your own charts and trade on your very own. Trades will be posted by 1 am ET, Monday through Thursday evening.
Read First: Trade Rules!!
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Can USD take anymore punishment? Well, in the long term it may have to. As the major central banks look to raise rates in the upcoming year, the Fed is expected to cut rates sometime in 2007, which makes buying into other major currencies much more attractive. In the short term, USD has just taken a nose-dive after Chicago PMI dropped to 49.9 from the previous 53.5. So we may see a range bound day tomorrow up until the US ISM Manufacturing Index number at 10:00 am EST. … More…
Sorry if I seem cynical about last night’s trade in my chart review, but that’s how most of November felt for me. As mentioned in last night’s Pick, I said if the pair can sustain a move above 1.9545 it will move to the R2 at 1.9632. So, the pair shot up… More…
Cable has risen for the ninth day in row against the Greenback, and with the pair touching a monthly high at 1.9549, there may be a great opportunity to short the overbought pair and get into a possible USD correction. If the pair breaks and sustains above the previous monthly high, then we may see the pair rally to the R2 pivot point line. … More…
It looks like I underestimated the correction as the pair rose up to our short entry, but kept on going! The pair finally found resistance around the 116.40 area before dropping as the pair sold off after the quarterly GDP report was released at 2.2%. Looks like a “buy the rumor, sell the fact” trade scenario would explain that event and how the pair rose after a weaker New Home Sales number came out weaker than expected at 1.0M new homes. … More…
The theme in recent weeks has been a declining US economy and all of the weak US data have been supporting that. Today was no different in that we saw terrible US Durable Goods and US Consumer numbers come out lower than expected, but we got a mixed from the USD markets. Is it possible that the USD sell off is overextended? I would say maybe so – in the short term. This mixed reaction maybe a signal of a correction before more USD selling continues. With more potentially negative data coming out tomorrow, mainly in the form of US New Home sales, we may see the pair drift higher before taking a dive. So, we will look to short USD/JPY at 115.95 to hopefully catch a continued down move.… More…
It was another “make-no-sense” day in the market as the US Durable Goods number came out WAY worse than expected. Couple weak US data with oil trading above $60 per barrel (stronger commodities usually correlate to a stronger Canadian Dollar) we should have seen this pair drop! But we didn’t and we watched our short trade trigger and reverse within the matter of minutes. … More…
It looks like the pair is consolidating between 1.1300 and 1.1350 at the moment. Traders are patiently waiting as we will see multiple, major US economic reports tomorrow morning. At 8:30 am EST we have the Durable Goods Orders which is forecasted to come out at -5.0%. Then at 10:00 am EST we will see the Consumer Confidence and Existing Home Sales report, both of which are forecasting weaker than previous months numbers. … More…
We were expecting a short and uninteresting week with the lack of any major fundamental reports and the holidays which kept traders in the US and Japan from their trading stations. For the most part it was pretty uneventful until that surprise USD selloff right before Turkey Day. This cause our only open trade for the week to stop out! Dohh!!!!… More…
Man, did anyone see that US Dollar sell off coming?!? Traders everywhere, including myself, were expecting a muted trading session due to the US and Japanese holidays. We had a range strategy in the works for the final pick of the week before the holiday, but it was stopped out as the US Dollar sold off sharply in the low liquidity environment. … More…
This will be the last “Pick of the Day” for the week as I will be taking off tomorrow to be with the family for the holiday weekend. Tonight’s pick will focus on the Loonie and the Canadian Consumer Price Index report, which is to be released tomorrow morning at 7:00 am EST. Recent Canadian economic data has been significantly weak, especially today’s retail sales number which was reported much lower than economists forecasted at -1.2% headline/-0.9% core. … More…
It looks like I over estimated the range that the pair traded in today as the pair never came close to our short entry and came within 5 pips of our long entry. So, no trade on a very boring trading day. No Trade Entered.… More…
We’re back to another wonderful week of forex trading, but unfortunately, it’s going to be a short and possibly boring one. We have a light economic release schedule this week, and with the US markets on vacation from Thursday on, we will probably see low volatility and maybe a spike here or there…pretty Much tough trading conditions. Don’t worry though, I’ve managed to come up with any idea or two this week, and for tonight we will be taking a look at EUR/JPY. … More…
As I have said in my trade review, it's been a frustrating month of November. Actually, even though we have come out positive in October and September, it's been a frustrating few months. The forex market has been in a period of low volatility it hasn't seen in a few years, making it a difficult trading environment for my methods. I am going to take an early weekend to clear my mind and reevaluate my perception of the current market environment. … More…
Okay, for those who have been following my trades for a while, you know that November has been a frustrating month for my "Picks" and last night was no different. As expected, the market drifted lower during the morning Euro trading session and our short entry at 1.8875 was triggered.… More…
For tonight’s pick, we’re gonna hop on this wild ride called “Cable” and ride it down as the Greenback has been gaining ground against it as of late. We have a couple of big data reports coming up today with GBP Retail Sales number and US CPI data. … More…
The classic scenario of “buy the rumor, sell the fact” played out early this morning as GBP/USD dropped as soon as the Bank of England announced that they raised rates to 5.00%. Unfortunately for us, the pair was about 100 pips away from our entry order right before the statement release.… More…
November seems like “déjà vu” as we have a rocky week of three consecutive losses like in the beginning of October. I think it’s time to take a step back, clear our heads, and be fresh and ready for next weeks trades. So, no “Pick of the Day” this evening. Well, just accept the losses as a part of this wonderful business we call trading and go have an early weekend! … More…
Apparently, the markets took the Democratic win of the House as a good sign as the USD, among other markets, was bid up as soon as the US markets opened up for trading. We were expecting a down US Dollar if the Democrats took control of either the House of Representatives or the Senate, but of course, the market surprised us and went against our trade...… More…
Now that the Democrats have taken the House and may tie with the GOP for Senate control, we can get back to economic data. I think a lot of traders have stayed on the sidelines to avoid the choppy markets that the mid-term elections and lack of data have produced. We have a couple of significant events coming up with the Bank of England rate decision and the US Trade Balance report. … More…
We’ve seen a huge USD sell off, US economy is slowing to a possible recession, and we have Non-Farm Payrolls expected tomorrow to report 125K new jobs were added. So, what’s a trader to do you ask? I say nothing. Everybody and their mama is waiting for this report, and once it’s released we’re going to see very, very dangerous trading conditions. If you are able to put in limit entry orders before the release or try to jump in at the market price after the report, you’ll probably experience slippage and get killed.… More…
Traders are waiting for the NFP report on Friday to make a move, so very little action to speak of today. No trade triggered as the market never came anywhere near our support and resistance trades. With that said, let’s get ready for Non-Farm Payrolls!… More…
We have one more trading day before the release of the Non-Farm Payrolls report on Friday, which means we will probably see more consolidation ahead of the report. We do have US economic reports starting at 8:30 am EST, but nothing significant enough to move the markets. The European Central Bank will be making an interest rate statement tomorrow at 7:45 am EST, and ECB Pres. Trichet will comment afterwards, but the markets are expecting no change.… More…
Well, my contrarian ideas on the current market sentiment proved to be wrong this trading day, but I still think we will see a USD correction sometime soon. First, I had hoped for a market reaction to the ADP Non-Farm Payroll, but got none as the number was released close to expectations at 128K new jobs. ISM Manufacturing came in lower as expected, but the move was rather limited as the pair spiked up briefly before coming back to pre-news release levels. This tells me two things: … More…
