Asian, European & US Sessions
Forex Trend Following2
| 04 February 2012
EUR-GBP-USDx SRO 2.06-8
Though the NFP & Jobs numbers were good, the structural fact of real unemployed US workers specially younger graduates as defined by some analyst does not sufficiently support such dramatic moves in the marketplace until the time for a follow-through would occur from hereunto.
After touching a higher at 1.3220 on 01.22 the EURUSD has had difficulty penetrating and serves as the initial resistance for now. A corrective move lower to 1.3025 from the past week have manage to hold its support while directional movements whipped-saw from the high-low to close at 1.3145 for the week ending the 3rd of Feb.The resiliency of the Euro is really supported by the EU leaders working real hard for a deal other than Germany's A Merkel meeting with China for some assistance. Although, a fundamentally bias news would justify that the EURUSD may have some legs technically speaking to move higher well above its initial resistance. Extensions is within a trading range of 1.3360 21Wk-MA and at 1.3480-1.3550 areas for the EURUSD.
Meanwhile, the GBPUSD first resistance levels have been marked at 1.5882 high with a low at 1.5705 support while closing for the week at 1.5815 well within its trading range. A spill over of contrary sentiments by bull players would likewise show in the opening trading days of next week. However, even with a daily up/down swings for the pairs would give way for the true direction near term trend to move higher.
A word of note, the price and behavioral comparisons indicates that there is a current price imbalance and discrepancy between the European pairs vs. the USD. Likewise causing an irregular market movements of price swings which can also been seen with the EURGBP cross rate. Until all three pairs are re-aligned with their corresponding objectives then such divergences in the Moving averages would be realized. Some due diligence is necessary to establish your trade decisions.
Now, in spite of the good report of the Jobs numbers at 243k;the USD slightly manage to move higher within the 77.60-79.57 trading range for the week and ending at the 78.95 just above its support levels. On the technical side, the 4 hourly chart formation of the prices compared with the Stoch/RSI technical combination have indicated an positive divergence resulting the USDx to move higher to 79.25 then closed for the week at 78.95. And the market's reaction for the past week have surely been a pause and a consolidation. The intra-day and week candle bar indicates that this week's price range has been a correction only before it resumes its near term bear direction.
Megatrade101 would likewise maintain our market outlook for the near term, where the USD is to move further south based on our market view report dated the 30th of January. As of this writing, no such indication for a price reversal change would occur for the USDX to go higher except on a daily price & session to session turnovers of the three major markets. Whenever the prices do move otherwise, we stand to be corrected. However, market conditons varies from time to time and whenever it does; alternative plans are in place to correct a speculative outlook by implementing trade decisions that can only prove that percentage trading will be the best strategy to outlive such a volatile market. Managing & controling losses will likewise protect the gains. Thus building equity on top of one's investment capital can and will always be used to pay off the losses and not coming from the principal investment funds.
These choppy behavior we have seen with the EURUSD, GBPUSD and particularly the cross EURGBP is a typical market behavior between the tug of war by the bull and bear players. Although, the candle configuration for both European pairs have been seen by other analysts to be carving out a top as to prep it for a downward direction. True enough to some extent, that we could see a daily consolidation with tight ranges while waiting for some news to trigger a rapid price fluctuation. An update would follow upon opening of the week's trading including graphs that would support this summary, review & outlook (SRO).
Unfortunately, not even the jobs data really moved the Forex market. As investors shifted cash flow investments to the stocks which we saw have moved higher right after the report. Here are some of the issues to consider: inflation, unemployment figures, housing, Iran & Israel Oil, Gold and the stock market / SP500.
