Hi readers! So I'm back in the UK and what a period we've had in the markets!! If you are an intra-day trend based trader or a break out trader then you've probably done very well since the beginning of last week; if you are contrarian counter-trend trader then you should have been disciplined and patient whilst the markets broke out and ran. If you do both then well done!
Now the markets have broken out key support and resistance levels, look for re-tests of these levels. EURUSD, USDCHF, EURGBP, Gold Spot are some of the key ones to be looking at. However, this relief rally is more to do with short covering than any improved news. The Commitment of Traders report showed extreme shorts on risk based currencies on extreme longs on the greenback. Therefore, we may just be pulling back due to some profit taking. The obvious news announcements out this week - the informal European summit on Wednesday and the G8 meetings will be key.
It's best to be patient and wait for a strong theme to present itself. Last week we had negative data coming out of just about every single country, the US, EU, China, etc... However, there have been some decent trading opportunities and the trade discussed in my April post http://qitrading.blogspot.co.uk/2012/04/dollar-index-lacking-momentumwheres.html on Sugar is now in play.
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