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Tuesday, May 3, 2011

Trend for 3rd of May 2011

As I expected markets saw bigger moves today. Again, much of what we see is connected to fundamentals, some of which was of medium importance. Market also saw some technical moves today. Let me start with silver. If you looked at 1 hour chart of silver you will see that on the 28th of April the price formed a support at 47.23 level. Yesterday, most probably due to the news about Bin Laden death the price collapsed. Later in the day, the commodity came back to previous support (47.23), now resistance (classical technical analysis thing) and collapsed from the level. Now, it is in a short term down trend. Good opportunities to go long again will be discussed in my future posts. 

I hope you remember me mentioning about importance of news from Australia. It did cause a significant move in aud/jpy pair. The pair moved from the range before the news came though. However, it made a minor retracement before the news, which gave us an opportunity to place a sell stop order below 88.22 the level (look at the chart of aud/jpy below). It could be that the move is just a day trend and would reverse tomorrow. We have to see yet.

The last piece of news that moved the markets was from Great Britain. In this case the data was of medium importance (GBP Purchasing Manager Index Manufacturing), but was able to send pound down across the board. Whatever pair you take, pound collapsed. We could have traded gbp/usd very easily by placing sell stop order below 1.6542 area with a small stop above 1.6566. News came and the order was opened. In my opinion the best way to close the order would have been around even number at 1.6500. In this way you would have increased your risk reward ratio to 1:2, meaning possible profit two times bigger than a possible loss. 

Read my previous post: 

Short term silver collapse


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.