Forex Pairs Ready to Breakout?

Monday, Apr 23, 2012

Good Morning,

As I posted on Friday, be aware of the multitude of data that is to be released this week. Macro events such as European elections, European austerity and the FOMC may take center stage and give us some "guidance".

Technically, the SPX is back at 1360. It has been in a 1360-1390 range and it seems like just a few days ago, we were at 1390. So a 30 point range for 13 trading days is actually a 2.2% trading range. Trading ranges can provide trading opportunities and if you want to learn more about those opportunities, please join me Wednesday evening for the IBFX webinar titled: "Rangebound Trading Opportunities"

Moving into the charts, let's start with forex and a pair showing very much a range, the EUR/USD:

 

Next up is another range bound pair, the USD/CAD. You know that I have been talking about it as it has been oscillating in a 2 penny range for months. We approached the top of the range today as equities and oil traded lower:

Past performance is not indicative of future results

The next chart of the USD/CAD shows the past few days, where it found support at .9900 and moved higher:

Past performance is not indicative of future results

Moving into equities, let's take a look at an ETF that acts as a "leader". The Financials (XLF) are looking to make a lower low (as is the SPX), which would change the "sequence" and could potentially put us in a downtrend:

Past performance is not indicative of future results

Another ETF that has a chart that is hard to decipher, but is getting closer and closer to old support at 3.00 is natural gas (GAZ):

Past performance is not indicative of future results

It should be a volatile week, so make sure you trade appropriate size if trading ranges do in fact pick up. To stay on top of the Federal Reserve, go to www.federalreserve.gov on Wednesday afternoon to read the statement.

Happy Trading and Be Environmentally Cool

Coach Brian

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: 

Brian Kahn

Brian provides regular commentary focusing on the relationships between various financial markets. An experienced trader and portfolio manager with over 15 years in the markets, Brian relies on fundamental and technical analysis to create trading plans for each and every market entry.