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Thursday, April 28, 2011

Trend for 28th of April 2011

As I predicted yesterday Federal Open Market Committee Rate Decision created big daily trends in various financial markets. The rates were left unchanged, but the news itself and Bernanke’s comments about US economy sent US dollar down in all currency pairs. Even yen regained its bullish tone and strengthened against the greenback. So, we can state now that US dollar continues its’ downtrend and nobody knows when it is going to end. I have recently read Jim Rogers (famous investor in commodities) statements that this could be the end of US dollar. Maybe, I am not sure about that, but it looks that at the moment US economic problems are too big to solve.

So, you can look at eur/usd and gbp/usd charts to see how the news moved these currency pairs and understand how you could have profited from the move. As always you had to operate with buy stop orders, placing them above the most recent highs just before news hit the market. Then you had to simply sit and wait before exiting or leaving your position for a bigger profit. We have another important piece of news from US today, which is Gross Domestic Product (Annualized) (1Q A). I believe we can expect pretty nice daily trends upon the release of the news. So, be careful around the time it is released as it can have big impact on the financial markets. 

I was very happy to see silver going through the upper part of the range, which I told you about yesterday. Again, the same type of strategy could be used to trade the breakout. Placing a buy stop order above the resistance before the news release would have allowed you to get the entire daily trend in silver. And the profit would have been pretty cool. 

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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.