Unstable situation in US
Hi, everyone. Let us do market trend analysis for today. Although everyone is looking at a possible debt default in US, dollar managed to strengthen yesterday and today. It broke support in eur/usd and ran around 60 pips downwards before retracing. I guess this is due to the fact that investors expect that US congress will finally agree on debt ceiling and America will be able to live as it used to before. The former statement will probably come true, the latter will definitely not. I do not think Europe is in a better position than US. So, buying Euro against dollar is not a very smart idea in the long run.
How you could have traded eur/usd breakout today
However, there was an opportunity today to sell a technical breakout downwards when support failed and Euro went down. You would not have got 60 pips, but cashing in around 30 pips was definitely possible. You had to place a sell stop order below 1.4320 level (below the support line that you can see on a chart) and move your stop loss following peaks and valleys principle (on 15 minute chart). This would have got you out around 1.4290 level.
Data from Canada will probably create a lot of volatility tomorrow
Tomorrow might be quite interesting. We have the same piece of data coming from US and Canada (Gross Domestic Product). I think eur/cad and gbp/cad could be very good for trading data from Canada. I noticed that news from Canada creates a lot of volatility in currency markets. So, if you want to trade tomorrow, have it in mind. Markets could become crazy, especially having in mind this US debt thing, you should not be reckless. Be sure to use tight stops and trade what you see, not what you assume.
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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.