Sunday, August 21, 2011
Trend for 21st of August 2011
Hello market trend followers, independent analysts and day trend traders. Yesterday, I talked about my expectations towards Canadian dollar pairs. Looking at oil price action I made a conclusion that Canadian dollar will rise soon. I also told you that I expect Yen to fall due to the very same fact of rising oil prices. I want to leave a few thoughts on this today.
I see that Yen is in the topping process and might fall very soon. As I said a few times before, I think that currency markets will experience serious turmoil soon and should be very careful in trading forex. However, that does not mean you cannot trade at all. I would encourage you to concentrate more on the long term picture. So, by looking at gbp/jpy and aud/jpy pairs I see that these two have almost bottomed and are ready to go up now.
GBP/JPY revisited the low of 16th (123.00) of March a week ago and has been going up since then. Since I am bullish about oil, I think the path of the least resistance is upwards not downwards. In the same manner aud/jpy came quite close to the low of 16th of March and jumped up. Unless big dogs decide to push oil prices lower, aud/jpy and gbp/jpy will continue going up and up.
Therefore, the best trading strategy for trading the securities is to buy on dips (buy low). Wait for reversal patterns when you see counter trend moves and when they materialize go up together with the market. I believe you should always play in the direction of a dominant market trend and never against it. So, when one or both of the securities fall, one should not panic, it is a normal move against the trend, which creates opportunities for those like trend following.
So much for today. See you tomorrow.
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.