Friday, May 13, 2011
Trend for 13th of May 2011
Dollar continued its short term uptrend today. We could clearly see how forex pairs can be tossed to and fro by news releases from different countries. Eur/usd was the best example today. We had news from Europe (German Gross Domestic Product) and as the data was good the pair went up around 60 pips. The same happened to eur/gbp. If you try to avoid volatility the pair is very good. It is the least volatile pair in the market. It rallied together with eur/usd and went down when the news from US came.
It is sometimes pretty difficult to trade these news events because the price starts moving before the news release and you can only place orders the last minute before the news comes out. We are chasing a moving target. You should be able to find some sort of a peak if you are placing a long order and a valley if you are placing the short order and when news comes one of those levels are broken.
Today you could also trade eur/usd technically. If you know that eur/usd is in a downtrend, you wait for rallies and reversal patterns to trade from the short side. RSI indicator can help you to do it. If you looked at 1 hour chart you would see a hidden divergence on RSI, which means you should search for some patterns in price or other indicators to go short. You could wait for moving averages crossover on lower time frames to enter a short trade. I will write more on the topic in the nearest future. When you apply some indicator in your trade always look if there is some news scheduled to come out. This can spoil all technical picture. So much for today, see you tomorrow.
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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.