Wednesday, August 3, 2011
Market trend analysis for 3rd of August 2011
Hello everyone. Let us do a short market trend analysis for today. It seems now that US was able to avoid a fast bankruptcy and has another chance to make necessary amendments to avoid it completely. However, if a country has been going in the wrong direction for about one hundred years, it is difficult to believe that it will change the direction now. All things are possible, but one has to make right choices. You cannot solve debt with more debt. You need to start cutting it, limit spending and etc. Market trends today show that investors will probably be getting out of US dollar and putting it elsewhere.
Bank of Switzerland tried to scare all investors out of Swiss Franc by cutting interest rates close to zero level. This will make it very attractive to borrow Swiss Francs and put them elsewhere, where interest rates are much higher. Swiss Franc has been doing very well for a long time and this trend can continue further, but one never knows if big dogs will be happy to buy Swissie at such high levels. Be on guard and closely watch what happens.
GBP/USD formed a nice reversal pattern yesterday and today after fulfilling head and shoulders pattern on Monday. You can see an inverted head and shoulders pattern on 1 hour chart and one could have traded it by simply placing a long order above 1.6330 level (resistance) and exiting at an even number of 1.6400. This would have been a typical technical reversal trade.
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