Article originally published on innerfx.com and republished here with permission
“Never stand begging for that which you have the power to earn.” ~ Miguel de Cervantes
Good morning. The dollar is pulling back as risk trade returns – both AUDUSD and AUDJPY recovering some of last week’s losses. The euro is following but the gains remain modest so far. Here’s a bunch of charts to start the week:
A recovery is underway as optimism is driving the market higher at the moment. Well, I have a strong feeling that it’s the bears who are enjoying a recovery more than the bulls – since that would mean better levels to sell the euro. 1.3450 is the first level to look for new selling opportunities, followed by a stronger barrier higher, at 1.3650
Aussie’s correction is stronger than euro’s but the cross is still trading far below key resistance levels – such as former support level around 77.50. Near term sentiment remains bearish as long as 80 is at a safe distance.
Regular readers know I’ve been keeping an eye on recent support around 1.4250 – looking to sell on the breakdown. But, as said in my previous report, I was rather cautions because the CHF pairs were almost “screaming” for a new intervention or a new statement, hence SNB’s comments came at no surprise. New traders fascinated by the amount of
computer numbers money exchanged every day in FX markets are often asking how much money does it take to move the markets. The answer is none…. all it takes is the right statement or rumors, coming from the right persons or institutions, at the right time. Knowing how sensitive to rumors and (more or less official) statements this market is should help you on the long run. But, speaking of GBPCHF – selling it is not a good idea right now, as resistance is under pressure, so I’m putting the bearish plan on-hold. Perhaps buying on the break higher is the best bet.
1.0500 has been reached and a correction occurred. The pullback is rather normal, so I think it’s best to buy dips – perhaps a bit lower than current 1.0400: 1.0300-1.0350
It looks that it’s time for a new large swing towards support zone around 1.32.
Have a great week and good luck trading!