Wednesday, April 13, 2011
Trend for 13th of April 2011
In terms of trend trading today was a pretty boring day again. Gbp/jpy failed to make significant advancements and stayed within a very narrow range. It was pretty difficult to trade it today, unless you do some scalping. Eur/usd pair reversed from an uptrend and is approaching to a short term support at 1.4400 level. This could be an opportunity to go up, but I am always waiting for confirmations, whether it is support or resistance. What I want to see is some sort of a double bottom on 15 minute chart with 123 technical pattern. Then I would place a buy stop order above the pattern.
There was some pretty important forex news from a few regions, basically Britain Jobless Claims, US Advanced Retail Sales and Canada Monetary Policy Report. All of the data could create significant daily trends in currency markets. However, they did not create any moves today and you would not have made good cash if you traded the events. I also do not see any important news releases on Thursday (tomorrow), so if you are a news trader, you will have to wait till Friday and see what data from US will bring.
However, there was a pretty good move in eur/cad pair. It was purely a technical breakout. It formed a double top (the first top was made on the 8th of April, the second on the 12th of April). One may assume that in these kind of situations you should take a reverse trade. It is possible, but in my opinion a support level at 1.3779 had to be taken for the bearish momentum to set in. It did not happen and the pair came back to double top today and took it away at the end of European session. So, you simply had to place half a position of buy stop order and wait for the level to be broken. Then you would have taken the position when the news from Canada was released, or better before the release.
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Trading financial markets carries a high level of risk, and may not be suitable for all investors. All information on the blog is of educational nature and cannot be considered as advice, recommendation or signals to trade in any financial markets.