Quote of the day: “Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is past the ocean is flat again.” - John Maynard Keynes
Good morning. The sun is up and so is the euro and a basket of other currencies, including the shinning metals, against the mighty dollar which is, once again, terribly hit by its main “defender” Ben Bernanke. Perhaps there are people out there who still believe that the economy is in great shape, that QE3 is unlikely and they’ll probably refuse to admit that it is inevitable even 1 month after it will start. Just a quick hint here: if it walks like a duck, looks like a duck and quacks like a duck, guess what! it must be a duck! …bad weather ahead for the dollar. As for the euro, Fitch just downgraded Greece to CCC which is like a duck default, but EURUSD didn’t react to the news retreating from the highs. Although I didn’t bought it on yesterday’s rally, I’m happy that I closed my previous short at breakeven, while the pair was still quietly testing resistance.
Trading strategy: looking to buy on potential pullback to 1.4100, initial stop at 1.4050 (0.5% risk), target open
Support: 1.4200, 1.4150 and 1.4100/30
Resistance: 1.4250/80, 1.4300 and 1.4480/00
Market sentiment: long term – mixed, medium term – bullish, short term – bearish, intraday – bullish
EURUSD daily chart 7-14-2011
Anyway, the Cable setup was indeed nice and managed to close the trade a bit earlier for almost 200-pip gain (nearly 2%), because I think that a retracement is likely after the 4 big figures recovery in the last two days. In case we see one, 1.6050 is the 1st level to keep an eye on, as support should limit losses before reaching next barrier at 1.5950.
GBPUSD daily chart 7-14-2011
Gold is again trading at record levels against dollar, EUR and GBP and Silver is currently testing resistance formed by the previous two corrections, following the huge decline (see chart below). This break above 38.50 is a decent buying setup on Silver – no doubt.
Silver daily chart 7-14-2011
Gold daily chart 7-14-2011
Have a great day!
Regarding cable, I was similarly lucky yesterday. Today it's looking aimless atm but may liven up with the US data later on.
Congrats
I'm planning to buy into the 1.6020/50 zone if it gets there, just in case it stays above the weekly and monthly opening levels
Pingback: Bernanke’s QE3 On/Off Commentary Locking EURUSD in Range | FX Trading Blog - innerfx.com