Good day traders!
With risk aversion hogging the lime lights right now, we see major currencies now testing their support and bottom of their trendlines. Looking at the chart above, a break below the trendline in the pound dollar can send the pair lowerto the 1.56 region. A bounce up could at least send the pair to the 21ema blue line around 1.5990.
With Irish debt problems being blamed for the recent selloff in risk currecies, we now have to look at how the eurozone is going to deal with this niggling issue. Most analyst are now saying that the euro problem might just lead us into the next global turn downwards. We know the reasons for the all that is happening and can always conjure some reason for it.With all these risk aversion and the fall in equities yesterday, its making most traders feel that risk appetite will never come back. However, if you take a look at the daily time frames in the majors and in commodities and stocks, the up trend is still intact and that this could just be a correction before a bigger rally ensues. Nevertheless, we trade with the big boys, they want to go down, we follow them as best we can. But don’t forget to actually look up your charts for the inevitable breaks that might just shift the gears to the upside on a dime.
For me, what is important is how the price behaveand we continue to look at the best strategies to deploy in any market environment. We have to identify the market environment first before deploying the strategies to trade and thereafter the tools to utilise. When I look at the charts, I can see that there are trends on the intraday time frames and one thing that I use nearing the end of the year is shorter ter, intra-day time frames to trade as not only is the turnover lesser during these times, there seems to be more volatility that seems unorganised and would give problems to you when you see that there is little follow through from what would have been a great pattern to trade in more normal times.
As such, I would remind myself to be more nimble when my trade goes wrong and always to remind myself to refrain from listening to the devil’s advocate in me that always try to prevent me from doing the right things when trading.
To your trading success!
Singapore Forex Trading Blog