Post NFP has brought confusion as to the timing of rate hikes and FOMC minutes showed divided opinions which included a few hawks that left the index up on the day.
There is no doubt that the market has changed environment and we are seeing many ranges in the pairs we trade. The ideas that follow are firstly based upon my blog prepared at the beginning of the week, the Forex Chameleon.
Please note as always, they are ideas and not recommendations. They are designed to show how we put together our strategy and how fundamental and technical analysis can combine to create it. Please use for practice only!
We have one live current trade
Short at 1.4426 on a break of the daily trend-line, entry on a 4 hour chart. This trade is at break even after 100 pips due to the volatile and unpredictable nature of the market,
discussed in detail last week. Following the NFP and the minutes of the fed, we are watching the index for clues as to the extent of the USD correction: Todays trading showed an attempt to break above the daily downtrend so we shall review this Thursday. This one is in a wide weekly range. Volumes are thin this week and other factors to watch include the oil market, which rejected the top of the range. That shall be monitored for the rest of the week and this will be on our discussion list next week
This is the daily oil range;
Forex Theory In to Practise:
The USD index confirmation either way is critical to trading decision for this pair. At present we review this daily.
Also for next week, again the USD index and FOMC minutes affect this one.
Preferred pullback to 23rd fib, very strong level 1.1276, 1.10 is also a level to watch. If no pullback, then a break of the daily trendline on a daily candle will be reviewed Thursday morning. There is still a thin weekend ahead so likely to leave this for next week.
On the radar; another range and will watch for a pullback to 131.50
This level is the 200 monthly EMA, and the daily 50 fib
Forex Theory In to Practise
Since our analysis was done this has taken off to the downside and will be on the review list on Monday!
In a market such as this it is essential to watch for news events relevant to your pairs and shifts in the market sentiment. The orthodox Easter Holiday is this coming weekend so we may not see the volumes kick back in until next week
If you have any questions we will be happy to answer them.
Forex Theory into Practise