These 3 Technical Points Should Prove Useful
The Calm Before The Storm?
Unless you were on vacation or sleeping most of
this week, you know the the FX markets have witnessed a tremendous amount of
volatility. With the G7 last weekend, and Greenspan’s speech on Capital Hill,
traders have seen some wild swings. This has naturally lead to a brief respite
as of yesterday. The question going forward is, “Will the trend continue or
will there be some short-term bounce before the next leg down?”
The easiest option is to allows trade with the
wind at your back, in this case, look to re-establish long positions in EUR
and especially GBP and AUD. The last two, from a relative
strength standpoint, look fantastic. Add in the fact that there is a favorable
interest rate differential between the US, Australia and Britain, and you have
the foundation for both a Position Trade as well as Swing Trade.
I am more inclined at this point to keep the
duration of the trade low, hence a Swing Trade set-up is what I am
stalking. Let’s review a couple of technical points that should prove useful
going forward.
The Swiss Franc (CHF) is displaying a
rather messy chart pattern so for now, keep you focus on the above pairs.
HVT
No, I have not forgot about HVT, however, with
the way the trading has been (non-existent) there is simply not much to say.
The one angle that traders have at their disposal is to seek stocks that are
moving, but as I have said, and as many have found it, it can be a
counter-productive way to trade. You either end up finding the stocks after the
fact, or you jump in blindly not really knowing how to judge the price action.
If you have developed good tape reading skills, you can sometimes manage, but
even then it can be difficult.
Yes, there are a few trades that develop each
morning, but you need to be assertive and go for it to take full advantage.
As always, I welcome your
comments and questions. If you would like to have your email address added to
my FX Mailing List for actual trade recommendations ahead of my FX
Service through TM in mid-February; simply send me your name and
email address to: aspendave@yahoo.com.
Dave