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Currency markets, where now?

Forex Trading - what's happening?

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hello my friends,

With the long Easter weekend coinciding with the Non Farm Payroll announcement, trading has been pretty tough for those of us who stayed behind trading. However, as we had all sorts of events planned in and around home I took some trades and covered the weekend nicely. The NFP figures were good and equities reacted favorably to the news. In a deviation from the usual sell the USD on good news, the beleaguered Euro took a nice tumble making me a solid 60 pips with almost no risk whatsoever.

Helped by the fact that the Euro is on a serious bend with SNB intervening as best it can to steady the Swissie against it (see the charts for some extremely unusual spikes - see on 04/01 at 15:45 GMT a spike on Euro/Chf from 1.4141 to 1.4404 closing at 1.4326). It is not easy to get these spikes, unless you are glued to your news provider and act mega fast.

My personal view is that the Euro is way past it's sell by date and I wouldn't be surprised to see it moving to parity and below with the USD. Let's face it, Europe is still in the doldrums, the PIIGS cannot fly contrary to popular belief, so with the Euro, it's simply a case of selling it every time it retraces and rears it's tired head. The Euro does tend to recover during the US session for some reason (old love maybe), so I tend to set limit sell orders during the Asian session, when of late it has been getting a good kicking. Always nice to wake up to 50-100 pips profit. With these trades I only risk 20 pips, or 0.5% of my account and set the 1st target at 40 pips and move the stop to breakeven, these have been pretty good trades in the last few weeks.

The GBP is also in a bit of pickle, with elections due in a month and the polls showing a potential for a hung parliament (i.e. no overall majority requiring the parties to form a coalition by doing some horse trading, and compromising their promises, lol). Overall the GBP is way oversold in my opinion, yes, the UK has had banking crises, bad management and a pseudo socialist government, but the bottom line is that banking will continue in the UK, and the UK will continue to act as bridge between the US and Europe. In any event, I am trading the GBP technically and around news events only, as it is 'the beast' and can jump around like a cat on a hot tin roof.

The Aussie is a currency I do like and with the Aussie economy doing reasonably well and interest rates on the rise, it's often a good buy with the general trend and following benign or good news. Taking a long Aussie against the Euro can be pretty useful too.

US ISM figures have also been favorable, resulting in positive moves for equities and once again a buying of the USD, particularly against the weak Euro, Risk and Euro seem to be having a relationship crisis, and as Traders, we offer the best possible counseling... lol.

Just heard that many Greek investors are pulling their money out of Greek banks in fear of IMF imposed conditions and a generally unstable environment,  I know I would and this can certainly not be good for the good old Euro.

As far as scalping is concerned, I have now limited it to around news events as the markets tend to consolidate and chop around and I have better things to do than keep an eye on a small position. Retracement scalps off news events (CPI, housing, GDP etc) have been pretty easy and with momentum it is possible to enter a bigger position, pick up a few points and head off, more rewarding and less tedious.

That me for today, feel free to comment or drop me an email.

Have a good day, be good boys and girls and check the video I put on my meditation blog, it's pretty cool ==> Cool Video

PS - I've had some problems with my RSS feeds and some articles made their way into this blog, that shouldn't have. Problem is now fixed.

I have joined the Yournight social network as it pays you and looks pretty cool, you can join too and make some money by clicking on the banner below:

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