Hi,
the Gbp/$ short gained a further 100+ pips last week. I showed in the
previous Sundays analysis how I intended to manage the trade &
thankfully the anticipated pull back did not close the trade and price
kept falling. Fridays positive USA jobs news then pushed it below the
MAJOR support and psychological area of 1.5000. I show at the start of
todays video how I intend to continue to manage the trade.My concern is that major moves like the current Gbp/$ one usually see a fairly substantial pull back and yet since the beginning of 2013 its has not materialised. A further point to note is that despite negative Euro news and positive NFp & a downgrade of the Italian credit rating, the Euro still failed to break and close below 1.300. This increases my suspicion that central banks are trying to keep major pairs within a range. Only time will tell, but it makes me wary for the week ahead. Best practise is only be in one trade at a time, until you have stops to entry as a $ weakness/pullback is likely to hit all pairs and metals.
Similarly the Yens broke yet higher. Standard theory is to look for a pullback to catch a continuation move. Again only take one yen trade at a time. A bigger than expected pull back the week before was a good reminder of why you should always follow this rule. Pairs like the Aud/Yen, Gbp/Yen etc are what is known as “cross pairs.” Their price is arrive at by multiplying the price of the $/Yen with the relevant currency versus the $USA.
For example the current Aud/yen price of 98.20 is arrived at by multiplying the $/Yen price of 95.98 X the Aud/$ price of 1.0231. Therefore you are exposed to both pairs as well as other cross pairs.
The Forex Week Ahead
Monday is a fairly light scheduled news day. It is however the first chance Asian traders have to trade the Nfp news so potential fireworks at the market open. I showed in last weeks video potential ways to trade “gaps” at the market open, I will be sat waiting at the open. Often its possible to make a weeks profit in just a few hours, so worth staying up late for me.
I will mainly trade from daily candle closes this week to try avoid “fake outs” the only forward order I will place is to short the Aud at 1.0330
Gbp/$:Only interested to short. I show in the video how I continue to manage the longer term short that many of you caught last month. This is currently + 800 pips which is awesome, the concern is that if we do see a big pull back I want to give the trade room to breathe BUT not risk losing 100′s of pips profit. If you missed the trade or are looking for an entry then 1.5000 is a logical place. A more conservative option is a pull back to 1.5240.
Aud: I still prefer a pull back to 1.0340 to short but as I explained last week a break and close below 1.0200 on a DAILY candle will also interest me. Watch the othe rmajors carefully. If the $US rebounds it should do so against all currencies and metals
As ever also watch gold and silver.
Euro/$:I suspect manipulation by central banks and therefore prefer the Chf once more. From weekly analysis I will be interested to short below 1.02880 also watch 1.3200 for a short if it does bounce up. Intraday there are multiple (too many) options which I show in the video.
Chf: Worked perfectly the week before at a break and close above 0.9350 which is the ideal place once more, but a more aggressive long will be at 0.9400.
Euro/Gbp: Still messy. Stuck at a major upper trend line so look for clues to short there. More conservative entries are break and close above the trend line at 0.8800 which I will take from daily candle close or a pull back to 0.8500
Euro/Yen: Yens broke upwards once more. I need a pull back on this pair (I prefer the Aud/Yen this week) but if this pair gets back to 120.75 I will long IF I am not in another Yen trade first
Aud/Yen:97.40 was major resistance, standard theory is a pull back there to long.
$/Yen: I need a bigger pullback and 0.9300 is the spot for me. A more aggressive intra day entry would be at 94.50
Cad: Price has broken and closed above a long term trend line and I am now interested to long at 1.0200. This is NOT a pair that I would recommend to inexperienced traders.
New members please note: If I am looking to take a trade long, at for example 1.6000 , I place my order 10 pips above & 10 pips below for a short. This is because price often does not quite reach a major line and you need to allow for spreads.
We are NOT a “tipping service” our aim is to teach you how to trade for yourself. For more up to the minute updates do not forget to drop by the forum
To view the video click on http://youtu.be/ZcOb9b0R0Cg