British pound on the move
Today is another nice day for some currency pairs. One of the currencies that have seen the biggest moves is British pound. It saw a very big collapse through the night and continuation of it after data for Industrial production came out. It was very bad and sent pound down in all currency pairs. It has already regained some of its’ strength and is higher now than it was before the news was released. It is at the first resistance now and the next is at 1.6350 level.
My expectations towards Canadian dollar do not change
Yen, contrary to my expectations strengthened through the night, but is losing strength now. As I said yesterday I expect Canadian dollar to strengthen today. Much depends on the news that is coming from Canada at 11:00 GMT. I am concentrating on eur/cad and cad/jpy at the moment. If cad strengthens I will be shorting eur/cad and going long in cad/jpy. Since euro and yen were the leaders in previous swing, they might be biggest losers this week and the coming one. Eur/cad reversed at a very important resistance level and looks very bearish now.
So, if the data is more or less positive for Canadian dollar I will buy it. I have one short order opened in eur/cad with a small stop and be ready to add to my position if the market goes down after news. US dollar might also strengthen and reign together with Canadian dollar for those two were the biggest losers last week.
Trade very carefully on Fridays
However, as nothing is certain if forex I am pretty careful now. You remember what manipulative actions we saw yesterday after news from Europe came out. The same can happen today, so I am trying to check the best points for my entries and the best places for my stops. It would definitely be breakout trades, if they happen at all. Occasionally, on Fridays, I place half of the position that I usually use for my news trades. It is better to make a larger stop and take fewer units to trade. If you succeed your profit will be smaller, but if you fail your loss will be very small too.
I am leaving in a few hours, so my post is pretty short today. I will try to write on some technical aspect of trading tomorrow evening. Fridays are usually very wild, so be very careful while trading and control your risk. It might also consider a possibility of not trading at all but just standing by watching and analyzing what you see happening. You will learn to trade news events better this way than just by jumping on any available news trade. I wish you profitable trading. See you tomorrow.
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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.