Blame it on record May
unemployment in Europe, blame it on a bleaker Chinese manufacturing figure,
blame it on the ISM Manufacturing PMI and maybe it’s jst profit taking but the
Dow has pulled back from its Friday
surge and while this is no meltdown, risk appetite – for now – is weak.
The U.S. Dollar Index and Dow are both
taking back some of Friday’s move but the correction on both is fairly limited.
The continuation of the downtrend in crude oil is pronounced but there is
near-term strength at the 20DMA.
Past performance is not indicative of
future results
The
daily chart of crude oil is following through to the downside in a classic example
of what I call a corrective entry or swing trade where I wait for a (preferably)
established trend to correct. In this case the bounce to the upside has
corrected into the dynamic resistance of my 34EMA Wave. This in turn identifies
where I would expect exhaustion and a continuation of the dominant trend – which
is down as I have mainly red GRaB candles and a “four to six” o’clock angled
Wave.
The continued crude oil weakness can
certainly be attributed to contraction in U.S. manufacturing but the trend has
been firmly lower so this is simply an acceleration of the current trend.
The EUR/USD flirted with 1.2700 as
selling pressure held the pair to a 1.2691 high. The major psychological level is
still the ceiling that optimistic bulls must overcome; and likely not on the
data that has kicked off July.
Past performance is not indicative of
future results
The
daily EUR/USD is being pulled lower for a number of reasons. Fundamentally,
there is simply too much weak data to support more of Friday’s optimism and
risk appetite. Technically the pair is in congestion and this increases the
likelihood for a move lower off the previous range highs.
Traders looking for bullish resiliency
need to look no further than the Australian and New Zealand dollar which have
both been generally outpacing the majors. The aussie has maintained strength against
the greenback, loonie, euro, and yen. And while the dollar and yen have been
strong, the aussie has (albeit shaky) uptrends developing on the respective
charts of the AUD/USD and AUD/JPY. Today the AUD/JPY is being tested as the
200DMA is under some attack but is holding on to support around the 81.50 major
psychological level.
Past performance is not indicative of
future results
The
AUD/JPY shows that there has been a surge in risk appetite and even with today’s
pullback, the bulls are hanging onto support around the 200DMA and 81.50 level.
A break of the 200DMA however could usher in a swift move lower to test 81.00
especially since the uptrend in the pair in not established, leaving it both
volatile and vulnerable.
As an
active forex trader and Chief Currency Analyst for InterbankFX.com I do write
for a number of sites all over the web and I am happy to say that I will be
posting updates atwww.IBFXconnect.com. MyActivity Boardwill feature the trades from my trading account as well as
intraday commentary.
Start the discussion! Questions?
Comments. Leave it here at the Daily Forex Trading Edge for Raghee to
personally answer. Using the icons at the top of the article to forward this
update to a friend via email, post it on Google or Facebook or simply print it out
for reading later.
Forex trading is one of
the riskiest forms of investment available in the financial markets and
suitable for sophisticated individuals and institutions. The possibility exists
that you could sustain a substantial loss of funds and therefore you should not
invest money that you cannot afford to lose.
Posted By:
Raghee Horner
Raghee Horner, chief currency analyst for IBFX, provides her personal daily trading tips and insights through Dailyforextradingedge.com. An experienced trader with over fifteen years in the markets, Raghee is the co-founder of EZ2Trade Software and has taught her brand of technical analysis and charting strategies to students all over the world. She is an international author and has taught currencies, futures, and equities trading for over a decade.
Blame it on record May unemployment in Europe, blame it on a bleaker Chinese manufacturing figure, blame it on the ISM Manufacturing PMI and maybe it’s jst profit taking but the Dow has pulled back from its Friday surge and while this is no meltdown, risk appetite – for now – is weak.
The U.S. Dollar Index and Dow are both taking back some of Friday’s move but the correction on both is fairly limited. The continuation of the downtrend in crude oil is pronounced but there is near-term strength at the 20DMA.
Past performance is not indicative of future results
The daily chart of crude oil is following through to the downside in a classic example of what I call a corrective entry or swing trade where I wait for a (preferably) established trend to correct. In this case the bounce to the upside has corrected into the dynamic resistance of my 34EMA Wave. This in turn identifies where I would expect exhaustion and a continuation of the dominant trend – which is down as I have mainly red GRaB candles and a “four to six” o’clock angled Wave.
The continued crude oil weakness can certainly be attributed to contraction in U.S. manufacturing but the trend has been firmly lower so this is simply an acceleration of the current trend.
The EUR/USD flirted with 1.2700 as selling pressure held the pair to a 1.2691 high. The major psychological level is still the ceiling that optimistic bulls must overcome; and likely not on the data that has kicked off July.
Past performance is not indicative of future results
The daily EUR/USD is being pulled lower for a number of reasons. Fundamentally, there is simply too much weak data to support more of Friday’s optimism and risk appetite. Technically the pair is in congestion and this increases the likelihood for a move lower off the previous range highs.
Traders looking for bullish resiliency need to look no further than the Australian and New Zealand dollar which have both been generally outpacing the majors. The aussie has maintained strength against the greenback, loonie, euro, and yen. And while the dollar and yen have been strong, the aussie has (albeit shaky) uptrends developing on the respective charts of the AUD/USD and AUD/JPY. Today the AUD/JPY is being tested as the 200DMA is under some attack but is holding on to support around the 81.50 major psychological level.
Past performance is not indicative of future results
The AUD/JPY shows that there has been a surge in risk appetite and even with today’s pullback, the bulls are hanging onto support around the 200DMA and 81.50 level. A break of the 200DMA however could usher in a swift move lower to test 81.00 especially since the uptrend in the pair in not established, leaving it both volatile and vulnerable.
As an active forex trader and Chief Currency Analyst for InterbankFX.com I do write for a number of sites all over the web and I am happy to say that I will be posting updates at www.IBFXconnect.com. My Activity Board will feature the trades from my trading account as well as intraday commentary.
Start the discussion! Questions? Comments. Leave it here at the Daily Forex Trading Edge for Raghee to personally answer. Using the icons at the top of the article to forward this update to a friend via email, post it on Google or Facebook or simply print it out for reading later.
Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.
Raghee Horner