In Forex and Futures Commentary

….for the US dollar, who else? This USD uptrend doesn’t want to give up, and I’ve been playing dollar longs and short term countertrend shorts all week mainly on EUR/USD, GBP/USD and USD/CHF. Pips have been coming pretty easily trading with the trend, and these short term bounces have been hard in some cases, particularly on GBP/USD. USD buying got extra nasty tonight, yet again.

Breakouts:

Breakouts have been heavy lately and playing them has paid off. When we have these major levels get taken out like on a day like today, there are usually tons of sell stops buried underneath them, which naturally accelerate price hard and fast. Tonight EUR/USD blasted through 1.2880 and took out everything in its path, with ECB interest rate cut speculation going around and just about every trader on the planet latching onto the heavy, prevailing trend.

Tonight Asia is picking up where Europe and the US left off, and USD longs remain in play for the time being, though I have a good feeling this move will get a decent retracement, just based on the fact that we’re trading on sell stops here; but its not over yet. 350 pip daily range on EUR seems to be an everyday occurrence lately. Volatility is fierce tonight and I’m basically waiting for things to cool off before considering USD shorts again (or I think any trades for that matter!), unless we’re discussing USD/JPY.

Other Markets This Morning:

The equity markets are taking a slide once again and SPX looking to the downside as I write. I still have an eye out for a retest of these lows. Other world markets generally consolidated, bearing to the downside. Japan selling off as the dollar gets stronger.
Crude falling as well; looking for the 66.00 target to get hit.
Gold declining and still looking for the eventual push into the 600’s.
Dollar index easily to touch 85.20, our target listed yesterday, with the next target on local highs made back in 2006 up at 87.08.

Bottom Line:

We’re coming to some big junctures in terms of levels. Technical closes are pointing to longer term new lows/highs (eg GBP 1.6000, EUR 1.2500, etc.) The deliberate point was well taken. Tonight looking for a retracement of these sinks in price with further trend following as part of the bigger gameplan. Any other fades in new highs/lows look for round numbers – not a lot of clarity in these ranges on EUR and GBP below current price….either way on drops its going to be extremely difficult to buy – safer sells until consolidation arrives.

Levels:

(anyone not familiar with how to use these please read through the materials in our trading strategy section)

CHF has buys at 1.1560, 1.1500, 1.1470, 1.1375 sells at 1.1785, 1.1893
EUR has sells at 1.3000, 1.3080. 1.3140, buys at 1.2680, 1.2460
GBP has sells at 1.6385, 1.6500, 1.6650, 1.6725, buys at 1.5850 (50% of monthly wave), 1.5610
JPY has buys at 99.25, 98.60, 97.90, sells at 100.85, 101.33, 102.15

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Showing 3 comments
  • Improvedliving
    Reply

    nice blog indeed

    Free Music

  • Graeme Lightfoot
    Reply

    Hi NBT,

    I thank you for your efforts to educate the stubborn & ignorant ( I possibley fall into both camps).

    Keep up the good work.

    regards,

    hedge.

  • Victor
    Reply

    Do you ever use sell or buy stops to play breakouts? How about sell limits and buy limits?

    Thanks

    Victor

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