Back To Trading Forex
Although I haven’t placed a trade yet, I’m busy stalking the currency markets again. I’ve been watching the EURUSD, AUDUSD, USDJPY, and EURJPY pairs again and I’m seeing some interesting things happening. I think we’re seeing possibly trend exhaustion in the EURUSD and AUDUSD pair signaling a possibly a top.
Why do you ask? Well I think the rumors of the USD’s demise are greatly exaggerated. While I agree that the USD will remain week in the months or years to come, the collapse of the US empire isn’t going to happen when we’re all watching it. It’s going to be a BSE just when we think everything in the world is peachy keen. On top of this, Bernanke is shifting to an inflation watch so interest rates have no where to go but up. Higher rates means stronger dollar.
Still though, the trends for the Euro and Aussie Dollar remains UP and we shouldn’t fight the tape. We should be very cautious and always place our stops.
Oh Forex, How I Love Thee!
June 16th, 2008 at 2:34 pm
Bernanke moving to an inflation hawk stance? Yeah right! Actions speak more than words. Just like Paulson keeps saying, “We believe in a strong dollar…”
BTW I did some simulations… I am starting to back off my 1.76… My boundaries are 1.6 and 1.4. Thought the tendency more towards 1.60 with some jumps into the boundary between 1.60 and 1.70.
June 16th, 2008 at 4:01 pm
SM: Well there’ll be plenty of jawboning for sure but I can’t rule out a 25 to 50 bps rise toward the end of the year. Yeah the EURUSD trend is still up but I’m beginning to see some signs of trend exhaustion. So who knows, the trick is to be on the right side of the move when it happens.