Trend: aud/jpy

Tuesday, May 3, 2011

Trend for 3rd of May 2011

As I expected markets saw bigger moves today. Again, much of what we see is connected to fundamentals, some of which was of medium importance. Market also saw some technical moves today. Let me start with silver. If you looked at 1 hour chart of silver you will see that on the 28^th of April the price formed a support at 47.23 level. Yesterday, most probably due to the news about Bin Laden death the price collapsed. Later in the day, the commodity came back to previous support (47.23), now resistance (classical technical analysis thing) and collapsed from the level. Now, it is in a short term down trend. Good opportunities to go long again will be discussed in my future posts.

I hope you remember me mentioning about importance of news from Australia. It did cause a significant move in aud/jpy pair. The pair moved from the range before the news came though. However, it made a minor retracement before the news, which gave us an opportunity to place a sell stop order below 88.22 the level (look at the chart of aud/jpy below). It could be that the move is just a day trend and would reverse tomorrow. We have to see yet.

The last piece of news that moved the markets was from Great Britain. In this case the data was of medium importance (GBP Purchasing Manager Index Manufacturing), but was able to send pound down across the board. Whatever pair you take, pound collapsed. We could have traded gbp/usd very easily by placing sell stop order below 1.6542 area with a small stop above 1.6566. News came and the order was opened. In my opinion the best way to close the order would have been around even number at 1.6500. In this way you would have increased your risk reward ratio to 1:2, meaning possible profit two times bigger than a possible loss.

Read my previous post:

Short term silver collapse

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.

Sunday, March 27, 2011

Trend for 27th of March 2011

Today I just wanted to write a few thoughts of mine regarding aud/jpy pair trend. From its’ most recent low which was established at 74.40 level on the 16^th of March, the pair rose more than 900 pips with minor retracements. When the pair runs up such a distance in a very short period of time you expect it to run out of steam sooner rather than later. When you look at the charts you become even more convinced about a reversal of a trend in the pair.

You have to be very cautious when a pair approaches towards some resistance and support as there are much bigger chances that the pair will reverse there and not continue its trend. As far as I see, the pair is at important resistance now and I am in a selling mood about the pair. 83.70 level was touched quite a few times in the past and the pair reversed from there. A chance for a reversal is much bigger due to the fact that aud/jpy has been climbing to the present height without stopping and the bulls should be pretty tired now.

I do not mean to say that the trend will completely change now, but I do believe there is going to be a correction and the pair will fall to 81.00 level. Of course, this is only my prediction, but as I am following tendencies I state what I state, because there are more chances for the pair to reverse now, rather than continue its’ upward trend.