US Data stinks, but will it cause the Dollar to drop lower?

EUR/USD

Ok so finally the Euro let up, but its still not moving down as much as I thought. I still think we’re going to see a much bigger drop very soon. Daily stochastics are still in overbought territory (of course) and 4hr stochastics are trending down. You can also see that the bearish divergence is very clear now on the 4hr chart which fuels my bearish bias. Look for the Euro to drop down to at least 1.4100, and I wouldn’t be surprised to see it fall to its 50 EMA on the 4hr chart at around 1.4030.

GBP/USD

Ok so the Cable was finally able to break away from that 2.0200 level it’s been sticking to the past several days as it dropped down to 2.0150 and is hanging on support at its 50 EMA on the daily chart. Both 4hr and daily stochastics were trending up but now seem to be crossing down which could mean more bearish movement for the pair. Currently the pair is trading around 2.0150 and I would expect it to fall down to around 2.0100.

USD/CHF

Well the Swissy bounced up from 1650 like I said yesterday and is now treading just above 1700. Things still look bullish at the moment as 4hr stochastics are trending up and daily stochastics are still in oversold territory. I would look for the Swissy to continue moving up to its 50 EMA on the 4hr chart at around 1750.

USD/JPY

Like clockwork, the Yen rose back up and my bullish bias yesterday paid off. The pair is now trading around 115.50 and we may see it drop again. Daily stochastics are trending down and 4hr stochastics are in overbought territory. We may also be seeing the formation of a bearish hidden divergence on the 4hr chart, but it’s still a little early to be sure. Overall I’m bearish in the short term for this pair, but I’m not really comfortable making a trade yet.

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:
  • Housing Data will be extra important with the 50 BPS rate cute:
    • Let’s not blow off the housing data… After a 50 BPS rate cut last week, and the dollar’s fall VS the euro, I think the housing data will be very important.
  • The Chinese Yuan and what it could mean for the Dollar’s future:
    • And of course, if the Chinese do finally allow a much faster increase in the value of their currency, their need for holding US dollar reserves will likely shrink (i.e. much of the reserve build comes from the pegging process). And dollar for dollar they can buy more oil with a stronger currency (and every other major raw material they input—including pigs). At minimum, if this plays out, it could be yet another sentiment hit to the dollar.

 

  • VonSmeid

    Haloha. Let me first say I realy enjoy your blog and I read it every day. I like it because I understand you completely and I also think I would many times predict the same price movement as you are. Anyway I am just a beginner at Forex. Now if you or sbdy else tell me:

    1.On which bases do you decide when to enter the trade.
    2. When do you get out of the trade because of negative result of your trade.
    3. What is the average time between entering a position and closing it. I belive if you look in 4h or day charts than average time should more than at least 1 day or more?

    I hope you understand what I am asking. I am not native english speaker and dont know the forex terminology yet.

    :) Ambroz, Slovenia, EU ;)

  • VonSmeid

    One more. For how long have you been piping now? Thanks :)

  • VonSmeid

    Haloha. Let me first say I realy enjoy your blog and I read it every day. I like it because I understand you completely and I also think I would many times predict the same price movement as you are. Anyway I am just a beginner at Forex. Now if you or sbdy else tell me:

    1.On which bases do you decide when to enter the trade.
    2. When do you get out of the trade because of negative result of your trade.
    3. What is the average time between entering a position and closing it. I belive if you look in 4h or day charts than average time should more than at least 1 day or more?

    I hope you understand what I am asking. I am not native english speaker and dont know the forex terminology yet.

    :) Ambroz, Slovenia, EU ;)

  • VonSmeid

    One more. For how long have you been piping now? Thanks :)

  • BigPippin

    Hi VonSmeid,

    Thanks for reading my posts! I usually enter based on momentum and support or resistance. If I see a good bounce off of a support/resistance level, I’ll usually enter and find my target. I usually put my stop loss behind a different support/resistance level, and I try to make my target at least 1:1 reward/risk ratio. My trades, can last anywhere from 15 minutes to a couple of days..it all depends on how big my target and stop is. And finally…I’ve been pipping for waaayyy to long but it never gets old :) Happy trading friend.

    -BP

  • BigPippin

    Hi VonSmeid,

    Thanks for reading my posts! I usually enter based on momentum and support or resistance. If I see a good bounce off of a support/resistance level, I’ll usually enter and find my target. I usually put my stop loss behind a different support/resistance level, and I try to make my target at least 1:1 reward/risk ratio. My trades, can last anywhere from 15 minutes to a couple of days..it all depends on how big my target and stop is. And finally…I’ve been pipping for waaayyy to long but it never gets old :) Happy trading friend.

    -BP