Like the title of this blog suggests, making pips in the Forex is easier said than done. This "reality blog" will allow you to follow my life as a Forex trader. I'll not only discuss trades, but also my emotions during these trades. You'll see my ups and downs, my highs and lows, and my smiles and tears.
This is the true story of one man, picked to live in front of his computer screen and find ways to make money off the Foreign Exchange. See what happens when markets stop being polite, and start being real! The Dollar Falls with weak New Home Sales numbers
Recapping the Majors
EUR/USD- After 2 days of falling, the Euro rallied higher once again to almost 3350 and finally settled down at 3327. The move was most likely a result of the lower New Home Sales number today which caused the Dollar to drop against the majors.
Result: The Euro opens the week strong and had a decisive victory against the Dollar today.
GBP/USD- Following in the Euro's footsteps, the Sterling once again rallied to around 9700 but was unable to push through that resistance level. Although the pair rallied over 100 pips today, 9700 has proven to be a pretty strong resistance area and you should proceed with caution around this level.
Result: The Sterlings rally today erased the gains the Dollar had made last Thursday and Friday. It is now at a critical resistance level.
USD/CHF- The Dollar initially started rallying against the Swissy but ended up falling after today's poor Home Sales numbers. The pair fell as low as 2116 but ended up rallying back to around 2155. The Dollar closed about 30 pips lower than its open.
Result: Although the Dollar fell to the Swissy the loss was minimal and has not really shown any directional bias.
USD/JPY- This pair ranged between its 50 EMA and 200 SMA on the daily chart. The price action showed extreme highs and lows but at the end of the day the Dollar only pulled a slight victory and closed just above 118.07.
Result: It was pretty much a draw between the Dollar and Yen as the Dollar only closed 12 pips higher than its open.
Chart Analysis: What's going to happen next?
EUR/USD
Today's Euro rally kind of concerns me because I feel as if the pair is still going to drop. 3400 is a good resistance level as it has not been past that level since 2005. 4hr stochastics are trending up which indicates a short term bullish movement while daily stochastics are just beginning to trend down. I think the most likely scenario for this pair is that it will once again rally to around 3400 and then bounce back down to new lows. If the pair makes a good break of 3400 then I will be convinced that my bearish bias is wrong and will have to re-assess my thinking. For now, I am bullish in the near term and bearish in the medium term.
GBP/USD
Like the Euro, the Cable is hanging right around a major resistance level. The Cable is currently just under 9700 and daily stochastics are in overbought territory. However, 4hr stochastics are still trending up and are not in overbought territory yet. I think we could see more of a rally in this pair compared to the Euro because although the daily stochastics are in overbought territory the fast line has crossed above the slow line. We could see this pair spike to around 9800 before it cools off again. I would be very cautious right now because 9700 is a pretty major resistance level and anything could happen.
USD/CHF
The Swissy didn't quite make it to its 38% Fib line and it ended up falling back down to around 2150. 4hr stochastics are trending down while daily stochastics are trending up. I think we'll see this pair continue to fall in the short term to around 2100 followed by a bounce back to 2200 or even its 38% Fib line. The 38% Fib line looks like it will be a good resistance level in the future as it looks like it is in the path of the 50 EMA.
USD/JPY
The USD/JPY is once again showing indecision as we've seen 2 days of spinning tops. Right now the upper and lower range bounds seem to be the 50 EMA and 200 SMA. Daily stochastics are in overbought territory and 4hr stochastics are trending down which gives me a bearish bias. If the pair can break its 200 SMA, I would expect it to continue down to around 117.00.
