Markets are continuing their short term and long term trends today. There was pretty important data from Europe today and it came out very bad. However, this did not prevent eur/usd to go higher and reach new highs today. So, eur/usd is in a long term trend and it is still intact. In an uptrend you wait for bad news to come out to add to your existing position and go back in the direction of a trend. That’s what you could have done with eur/usd today. Other pairs, such aud/usd or nzd/usd are recovering from a blow that came to commodities after the news of Bin Laden’s death.
If you looked at silver today, you would see the same scenario that you saw yesterday, which means that you could have traded the same technical pattern that you had yesterday. The pair came to yesterday’s support at 42.30 today (it was resistance today) and formed a 123 technical pattern at the level. You can see it on 15 minute chart below. So, when you have information that some security is in a down trend, you wait for it to rally and form this pattern at previous support (now resistance) and reverse there. The selling point is at support of 123 pattern (number 2). In case of silver it was 41.85 level.
There is still some fundamental news (important) scheduled today, but I have no intensions to trade it. It is USD ISM Non-Manufacturing Composite. It could create some commotion in the market, but I am sure that everybody is waiting for tomorrow for big news from Great Britain (Bank of England Rate Decision) at 11:00 GMT and from Europe (European Central Bank Rate Decision) at 11:45 GMT. This should set markets on fire. So, I am waiting for that news to see if they would force markets to continue their course or make some short term reversals. I am going to use limit orders to trade the news placing them above most recent resistance (for going long) and below the most recent support (for going short).
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Disclaimer
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.