And I’m Back…Too Bad The Dollar Isn’t!

EUR/USD

Well it’s been a while since I’ve posted. I had a nice little vacation in Orlando, Florida. Thankfully, tropical storm Noel did not hit us and I was able to return home safely. The market sure has been busy since my last post. If you followed along, you know that I was an extreme bear on the Euro. The Euro has been the exact opposite. Alas, a good trader never frets in these situations. During times like these, it’s nice to catch the little retracements and the charts are now showing another opportunity to do just that. The 4hr chart shows a very long and extended bearish divergence and both 4hr and daily stochastics are in overbought territory. Currently the pair is trading around 4550 and I would expect the Euro to drop down to 4500 or even to its 50 EMA on the 4hr chart at around 4450.

GBP/USD

The Cable has made an even larger push than its Euro brethren and has been killing the Dollar. However, with such a strong move, a retracement looks like it will happen very soon. The 4hr chart shows flat highs on the price, but lower highs on stochastics which indicates a drop is about to occur. Daily stochastics are also in overbought territory which confirms this bearish viewpoint. I would look for the Cable to drop from its current price around 2.0870 down to 2.0800.

USD/CHF

The Dollar has also been taking a nice butt whoopin against the Swissy since my last post. However, like the Euro and Cable, it looks like a retracement is near. On the 4hr chart we can see the formation of a bullish divergence. Not to mention the fact that 4hr stochastics have crossed up in oversold territory and daily stochastics are also in oversold territory. All the technical signs point to a bullish retracement right now. I would look for the Dollar to run up against the Swissy from its current price around 1460 up to 1500.

USD/JPY

The Yen has moved into range mode as it has been drifting between 114.00 and 115.00 for the past few days now. Right now, the technicals aren’t really giving me a clear picture on this pair so I have decided to stay out for now until a better opportunity opens up.

I’m not really big into fundamentals but I feel that they are important to discuss. In this section I will be posting fundamental tidbits that I find interesting from various sources. If you find an article that you think would benefit everyone, please email me (Big Pippin) with your username, the article, and a link to where members can read the entire article.

Now onto the Fundamentals:
  • "Model Behavior"
    • Super Model Gisele Bundchen has decided that she wants to remain the world’s richest model by insisting that she be paid in almost any currency but the U.S. dollar! OK… Now the dollar has been officially dissed! Sure guys like Rogers, Buffett, Gross, Butler, Wiggin, and Bonner have dissed the dollar because of the fundamentals… But when a super model decides to side with us, well then we’ve got ourselves what I’ll call… "Model Behavior"!\
  • UK September retail sales saw the highest annual growth in 3 years:
    • The Office for National Statistics reported that retail sales in September rose 6.3 pct from a year ago, the highest rise since September 2004 and above analyst expectations for a 5.6 pct increase. In August sales rose 4.8 pct year-on-year, revised down from the earlier estimate of 4.9 pct.
News events to watch for tomorrow :
  • 8:30am EDT- US Non Farm Productivity

For a list of all of tomorrow’s news events, check out our Forex Calendar

14 comments

  1. zakwatt

    I am going long GBP -v- dollar. If it breaks north past that ‘flat’ 2.09 area then I think I will be ‘quids’ in. Hopefully it will break past there within the next 24 hours. My reason is that the pound has been holding steady and even last weeks non-farm payroll, which should have favoured the dollar didnt hold back GBP. Price as I write 2.0866, just 39 pips off 26 year highs.

    Reply
  2. zakwatt

    I am going long GBP -v- dollar. If it breaks north past that ‘flat’ 2.09 area then I think I will be ‘quids’ in. Hopefully it will break past there within the next 24 hours. My reason is that the pound has been holding steady and even last weeks non-farm payroll, which should have favoured the dollar didnt hold back GBP. Price as I write 2.0866, just 39 pips off 26 year highs.

    Reply
  3. dreknar

    Somehow I was reluctant to follow the recomenadtions on the pairs, but I did with small size, just to give it a try (I had that strange feeling, not to do it)…I also noticed there was a triangle forming on the pairs, its not really easy to notice that, but well, the spike ocurred later and the position was closed. Not really high lose, but I recovered fast from it and was able to take advantage, now using big lot, since those spikes cant be real, the value of something cant change like that so fast, that was only a market perception…it had to go back (i thought)..and it worked…got quite some good pips..

    Reply
  4. dreknar

    Somehow I was reluctant to follow the recomenadtions on the pairs, but I did with small size, just to give it a try (I had that strange feeling, not to do it)…I also noticed there was a triangle forming on the pairs, its not really easy to notice that, but well, the spike ocurred later and the position was closed. Not really high lose, but I recovered fast from it and was able to take advantage, now using big lot, since those spikes cant be real, the value of something cant change like that so fast, that was only a market perception…it had to go back (i thought)..and it worked…got quite some good pips..

    Reply
  5. pinetree

    Welcome back Bigpipin. Hope you had some good relaxation. The GBP is really in no(n)sense territory. It actually hit 2.1050 last night. RSI and Stochastics still not pointing down. I am just really lost right now — can it still go higher????? This dam GBP has created a few sleepless nights for me..

    Reply
  6. Big PippinBigPippin

    Thanks for the comments everyone! Yea, so you can see that I was completely wrong on my analysis yesterday. I’m the first one to admit that I’m not always right. The Dollar is just so vulnerable right now and the technicals are really not having much of an effect on the currencies right now. I’m glad to hear that you all are limiting your losses. That’s the best thing you can do to make mucho profits in the long run. Keep up the faith and we’ll get those pips soon! Happy trading everyone!

    -BP

    Reply
  7. zakwatt

    I am happy with my long , approx 200 pips up, however it is never a great thing to brag in this game as you soon get a boot in the backside from the market. However, fundamentals are still against $ in my opinion.

    Reply
  8. pinetree

    Welcome back Bigpipin. Hope you had some good relaxation. The GBP is really in no(n)sense territory. It actually hit 2.1050 last night. RSI and Stochastics still not pointing down. I am just really lost right now — can it still go higher????? This dam GBP has created a few sleepless nights for me..

    Reply
  9. Big PippinBigPippin

    Thanks for the comments everyone! Yea, so you can see that I was completely wrong on my analysis yesterday. I’m the first one to admit that I’m not always right. The Dollar is just so vulnerable right now and the technicals are really not having much of an effect on the currencies right now. I’m glad to hear that you all are limiting your losses. That’s the best thing you can do to make mucho profits in the long run. Keep up the faith and we’ll get those pips soon! Happy trading everyone!

    -BP

    Reply
  10. zakwatt

    I am happy with my long , approx 200 pips up, however it is never a great thing to brag in this game as you soon get a boot in the backside from the market. However, fundamentals are still against $ in my opinion.

    Reply

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