International Trading


Eur/$ has indeed continued higher, breaking above the July 20th high at 1.3030 and on way toward the long held 1.3120/35 resistance area next (38% retracement from the Nov high at 1.5140). However, the market is nearing overbought after the gains from the Nov low at 1.1880, is potentially within the final upleg from that low (wave 5, see numbering on daily chart below), lots of other currencies are reaching longer term $ support areas (cable at 1.5630/50, 50% retracement from the Aug 2009 high at 1.7040, $/index at 81.40/55, 50% from Nov low at 74.25, etc.), and the short term eur/$ chart may be nearing a high. These all suggest that risk is rising for at least a few weeks/month of consolidating lower and "ideally" would do so in this area. I use the word "ideally" as there are no signs of such a high "pattern-wise" (at least so far). In general from a position standpoint, don't want to make the mistake of just running in and shorting in these types of situations, as there is often a big difference between "ideal" and what actually occurs. I prefer to be a little more patient, managing the risk (if in a position) or waiting for signs of a short term pattern/reversal before going against the larger trend. Though this will usually mean not getting at the exact reversal point, the risk by waiting, will most times be quite less (remember its all about risk/reward). In the case of eur/$, rebought on July 23rd at 1.2840 and given the potential increase in risk in the position, would use a very aggressive close below the week long bullish trendline (currently at 1.2975/85) as a sign to stop. Further support below there is seen at the bullish trendline from late June (currently at 1.2920/30), while resistance above the 1.3120/35 area is at the rising trendline since June (currently at 1.3260/75).

Longer term no change in the bullish view on way toward 1.3120/35 (almost there), with potential for 1.3940/55 (50% from the Nov 2009 high at 1.5140) and even the bearish trendline from that high (currently at 1.4725/50) still favored over the next number of months. However as mentioned above, risk is rising for a month (or more) of consolidating on the way higher (see "ideal" scenario on weekly chart/2nd chart below). Switched the longer term bias to neutral on May 25th at 1.2260, from bearish which was put in place last Nov 2nd at 1.4825. Though further upside is favored in the bigger picture, just too much near term risk to switch the longer term bias here, and instead would wait for a better opportunity to switch (expected to be to the bullish side and at lower levels ahead).

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International Trading

International Trading

Euro Forecast To Gain Versus US Dollar

British Pound Turnaround May Be On The Horizon

Japanese Yen Positioning Remains At Extreme Levels

Swiss Franc May Continue To Strengthen Against The Dollar

Canadian Dollar Forecast To Break Below Narrow Range

British Pound Forecast To Advance Against Yen

Weekly Overview

International Trading

Ed Ponsi

“It’s important to enforce discipline; if the market isn’t giving you a good chance to turn a profit, you have to sit tight or walk away […] Also, beware of rumors in the summer.” [Read all Ed's answers]

Phil Newton

“There is only one thing to do: trade your plan. […] Assuming you have taken a break you should ease yourself back into you're trading routine.”[Read all Phil's answers]

Dr Sivaraman

“If one wants to do trades while enjoying holidays then do 1 lot position trade identifying the extreme levels ( limitations) and keep lower level buy or higher level sell orders - whichever is filled you may keep a stop and limit of 50-60 pips.” [Read all Dr Sivaraman's answers]

Marco Mayer

“I’ve seen both, summers where literally nothing happened and summers where the markets were completely crazy. You have to be prepared for both, when things slow down, so do I.” [Read all Marco's answers]

John Jagerson

“If the market does slow this summer - I think it is the perfect time to start creating conditional plans not just for inflation but for a variety of potential market conditions that may emerge through the end of 2010 and 2011.”[Read all John's answers]

Gonçalo Moreira

“I wouldn't take a slow price action during August for granted - instead I prefer to be prepared for possible cascades in price due to thinner market conditions.” [Read all Gonçalo's answers]

Rob Booker

“I'll be focusing my time and attention on the GBP mostly - the crosses and against the USD - and I expect to see some significant moves.” [Read all Rob's answers]

Wayne McDonell

“Preparation needs to be made for a return from holiday, not before the holiday. Traders need to anticipate what the "investors" intend to do when they return.” [Read all Wayne's answers]

Valeria Bednarik

“My recommendations will be to reduce your leverage, use a tight stop and be patient! Use cyclic indicators to support your trading, like stochastic, or CCI.” [Read all Valeria's answers]

James Chen

"When it gets slow (which it never really does for me), I would definitely say that people should keep trying to learn and practice as much as humanly possible." [Read James' full answers]

Ilian Yotov

“The carry trade has made a comeback. If this continues [...] in August, the higher-yielding currencies could remain well bid [...]. Traders should watch throughout the month of August if the current market environment remains the same.” [Read all Ilian's answers]