Market Timing Trade Room Sells EUR/USD to Stifle Euro Bulls

Recent forex market conditions have been less than favorable but our Timing the Market Forex Signal continues to find favor with forex traders. I sense the eur/usd could be tipping into a bearish pattern and we still await the next entry.

I am looking for key resistance below 1.4100 in the 4060-80 level and I see bears targeting profits below 1.3990 towards 3949 to 3870’s or better.

The balance of trade this week could find less than normal atmosphere with thrashing or potential whipsaws. We hope to capitalize on the immediate technical structure and I will be open to trading either direction particularly if there is geopolitical or unscheduled financially related fundamental news.

We look forward to running hard the next 48 hours in attempt to capture any potential profits before Thursday night.

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Britt Maras - Senior Currency Strategist

We have a shortened holiday week in most forex markets this week. Volume will fall all week and therefore risks will increase since they are inversely correlated. We continue to use pullbacks in the Dollar as buying opportunities, which continues to work. We are entering into what is sometimes called the summer doldrums and just like the doldrums on the oceans it implies somewhat directionless “wind” and an overall “drifty” environment. Hurst exponent values across most markets are gravitating toward 0.5 which implies more “random” type of movements. So be extra cautious in the weeks ahead.

EUR/USD:

Sells taken in the 1.40’s to 1.41’s should be solid entry points as discussed last week. Look for breaks towards the 1.38 level to take profits or at least lock in gains. We could see a much deeper correction but for now we will just look very near term.

GBP/USD:

This pair has not followed through to the downside yet but has seen a number of nice breaks. We are still looking at shorts above 1.65 this week and looking to cover them in the low 1.60’s. Again during this holiday week be extra cautious, especially in the ladder half of the week.

USD/CHF:

This pair remains a buy close to the 1.08 level. This pair could see a move back into the low teens before this rally stalls. Same comments as the last few weeks and they still stand. They have paid off nicely last week and we see similar movements in the weeks ahead.

USD/JPY:

This pair is now trying to rally a bit after hitting our downside targets. Would rather be a seller of whatever rallies come for the medium term.

AUD/USD:

The support levels from last week have held and we are now seeing another retest of the upper end of the range. We are again sellers near the .8100 level with stops above the recent highs.

USD/CAD:

This pair continues to be dominated by the price of oil. We continue to see oil pulling back over the summer and are therefore having a hard time seeing this pair stage a major breakdown in the near term. So we are looking for harmonic dips to buy into this week.

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When you set a price alert signal on your charts and it rings just before midnight New York, you know you are either going to enjoy your slumber or you are going to put on the pot of coffee. The real problem is you have to go in the office to shut the darn beeper of and of course – the chart is then staring you in the face.

Sometimes forex market conditions goof price patterns in broad daylight when only sane people go to work. Then of course, that leaves the very sane Forex Signal Trader in position to cleanup when nobody else seems to be around. That’s one of the different choices in successful forex trading. It’s sort of like being ‘on-call’ to put in the effort and perform the duty when it’s ripe for the taking.

We had a great forex signal kick-in and made two loops for more than 110 pips and drove the Cable down to the day low upon sunrise in New York. As I mentioned the other day, you strive to effectively manage a bad trade decision but, better yet you are compelled to more effectively manage the good ones.

I’d like to thank all the great members of the program for their dedication and the confidence they place in me. Certainly we always hope for strong net gains and as the old saying goes ‘Rome Was Not Built in a Day”. Stay tuned.

If we have any new readers to my blog please feel free to view my direct interview, it is short or, my live webinar from June 4^th; and let us know if you have any questions.

Kind regards.

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Britt Maras – Senior Currency Strategist

For our last live trade call, we were watching the Canadian Retail Sales report last Friday. I suggested raising the medium trigger to 0.6% and the safe trigger to 1.0% as this release has not had a big impact on the market recently. The actual number came out with a deviation of -0.4%, so it did not meet our raised triggers. The USDCAD did move approximately 25 pips in the right direction, so that is a good sign.

View the video for this trade below:

OUR NEXT LIVE ON THE NEWS TRADE CALL

Tomorrow we will have an opportunity for a trade when the US Durable Goods report is released at 8:30 am EDT. We will be focusing on the US Core Durable Goods figure, which is expected to be -0.2%. We will be looking for a deviation of 2.0% on this report to trigger a safe trade. A higher than expected number will trigger a buy on the USDJPY and EURJPY.

We will likely prefer a sell trigger on this release as the USDJPY and EURJPY are currently in a down trend. We should still be able to trade a buy trigger, but we will likely look to close out quickly once we see 15-20 pips if it triggers a buy. We will need to be careful tomorrow as this release has not had a very strong impact on the market lately. In addition, the FOMC rate decision will be coming out tomorrow afternoon so there might be some higher volatility on the USD crosses tomorrow morning in anticipation of that release.

This report last met our safe trigger in March, and we had traders report profits up to 10-15 pips on the trade. The chart below shows the movement of the USDJPY at the time of this release. At the time of March’s release, the EURJPY moved approximately 35 pips.

To see the video of March’s trade, click on the link below:

This is our current outlook for this trade; however, it is subject to change as market conditions may change by tomorrow. Be sure to log in to the Live Trade Room 15 minutes prior to the release to get my commentary on this potential trade.

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Then visit: http://www.forextradersdaily.com/forex2.php ]]> http://forextradersdaily.com/blog/news-trade-calls/2062/feed/ http://forextradersdaily.com/blog/forex-market-updates/forex-traders-experience-misplaced-market-chaos-dollar-bulls-get-crushed/ http://forextradersdaily.com/blog/forex-market-updates/forex-traders-experience-misplaced-market-chaos-dollar-bulls-get-crushed/#comments Tue, 23 Jun 2009 16:04:33 +0000 Britt Maras http://forextradersdaily.com/blog/forex-market-updates/forex-traders-experience-misplaced-market-chaos-dollar-bulls-get-crushed/ EUR/USD Outpaces Liquidity in Suspect Bull March against Worldwide Risk Aversion

Today I issued two different bear Trade Alerts each stopped out for a combined net loss of 49 pips. Last week I mentioned that a losing trade (s) is nowhere near as fun as the positive 22.1% return delivered in my Forex Signal Market Timing Trade Room last week (based on trading 5% margin or less). Today is rather fascinating in terms of price action but more apparent is the bull march to some destination that I am certain not even the liquidity providers recognize with any reasoning whatsoever.

Certainly I must be wrong! Even a very good technician is wrong but he continually strives to make sure his profit-to-loss ratio remains near or above 2:1; thus the very tight stops in a rather suspicious market environment. Of course, there is always another trade and it must be traded and the setup must be trusted. That’s the reality required for success in the Forex Market.

Now, let’s get a few things straight! I could care less about liquidity providers and, as to why and how movements like this occur; that’s not as important as preparing for the next trade. Today’s activity in the FX arena is surely suspect but that’s the part of the movie we talk about when exiting the theater and indeed – that’s what makes a good movie.

It’s not the performance we get consumed with it’s the ending and then the next scene. The past 5 summers I don’t exactly recall 1hr chart patterns as we have witnessed the past few weeks but I do recall that in summer trade often we have plenty of tsunami type trades and plenty of whipsawing; and plenty of profit available – as seen last week. All is good in Love and War!

Sometimes market activity like today is followed by some strange news event, some fundamental news or some sleeping/ticking/time-bomb that when we learn about it – we think, okay, someone knew something! Right? Not really! Okay, Back-to-the-Future. Let’s get ready to make a bunch of pips.

EUR/USD Levels to focus on:

Resistances: immediate at 1.4120, 4155-63, 1.4184, 1.4240, 4284 and then 1.4310

Supports: immediate at 1.4068, 4049, 1.4007, 1.3986, 3966 and then 1.3904

The pair is pining for exhaustion but not likely before rising further to some key resistance. There remains potential for a bull entry and it may take more time to pass before a solid bear entry appears. Needless to say, stay tuned and we will remain focused and prepared to attempt another entry balanced with risk versus reward.

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Britt Maras – Senior Currency Strategist

This week we are already seeing what I talked about in last week’s newsletter. I will say it again…The short squeeze of the decade has begun! Selling Dollars now is like buying Pets.com in 1999.  Remember I am very bearish Dollars longer term, but near term the stage is more than set for yet another “surprise”…lol.  The only one’s who are surprised are those not reading this newsletter.  I was lucky enough to be mentored by one of the most successful traders ever and he taught me a very valuable saying, one that I recall daily.  It is nothing short of both mathematically correct and psychologically correct.  It simply says: “Markets almost always move in the direction that HURTS the most people”.

And since we all know that the majority of investors lose, not just in FX by the way, but in ALL markets, stocks, bonds, commodities, Forex, you name it.  In all of them the losers out number the winners.  Always have and frankly always will.  And that is great news for those of us who win so do not be bothered by that reality.

My point is this.  If the entire world thinks Dollars are going lower and we already know that markets do in fact move in the direction that hurts the most people, then how can a sane person want to go short Dollars here given that logic?  If most people are now short who is long?  Remember there is always someone on the other side.  The crowd is almost always wrong.  So even from that overly simplistic view, I hope you can begin to see why I am calling this the short squeeze of the decade.

EUR/USD:

We got the entries we looked for last week and did well with them.  I am looking for this week being a bit more mixed.  We do not have as clear a picture as we did last week, but the overall picture and story remains the same.  We want to be buying Dollars on dips but at least in the first half of this week we want to be patient.  We see a two sided market this week with increasing range so extra caution is advised.  Any rallies back near the 1.40 levels should be solid medium term entry points for shorts.

GBP/USD:

This pair has also respected the resistance levels we forecasted in past issues.  We are looking to sell rallies near the 1.64 level or higher this week while targeting a move back to the mid 1.50’s at least.

USD/CHF:

This pair remains a buy close to the 1.08 level.  This pair could see a move back into the low teens before this rally stalls.

USD/JPY:

This pair is another that played out almost exactly as we forecasted in past issues…and please don’t take my word for it go back and look at the comments that were posted and when they were posted and you can clearly see the accuracy.  At current levels, however I have little desire to trade this pair.  If we see rallies back near or above the 97 level I would again become an interested seller.

AUD/USD:

Another one that has played out as forecasted.  I am not trying to brag or boast but simply point out that none of these moves should be a “surprise” to readers of this newsletter.  Anyway this pair is very dangerous right now and I am advising anyone that is still short to protect as much of the gains as they are comfortable doing.  We are seeing ever increasing possibility that we still see another spike to retest and possibly break the recent highs above 82 so again be warned.  Strong support lies near the .7850 level and is likely to hold at least on the first test.

USD/CAD:

Last week I forecasted that Oil would hit 55 before it hit 75 while it was trading at 72.  Many of you commented that I was krazy…well who’s crying now?!  Oil will continue to fall but the path down is not going to be quick or easy.  We expect to see at least 70 retested once more before a real move into the lower 60’s.  So that will bread volatility in the Canadian but we are comfortable shorting above 1.15 and holding for most of the week.

Currently the pair is entrenched within a week old consolidation range but that should change soon.

EUR/USD Forecast:

Resistances: immediate at 1.3867, 3886, 1.3903 3951, 3979 and then 1.4029-79

Supports: immediate at 1.3852, 3803, 1.3791 and then the door is open to 1.3700 to 1.3640 to 1.3510

I have a bearish slant BUT the pair is heavily congested waiting for fresh market impetus and price action. I hope to issue a Trade Alert soon and a Market Timing Alert.

Britt Maras – Senior Currency Strategist

Our Forex Signal offered our exclusive Trade Room another good day of productive trading. I was fortunate, along with all the traders – to be patient enough and wait for our Trade Alert Entry order to be swept in for a rapid 70 pip gain.

Recently my EUR/USD Forecast has assisted us to make strong decisions amongst rather chaotic and imbalanced markets. Currently the FX Market is lost in confusion but I sense some directional decisions are imminent and I will strive to capitalize when ready.

At this time this evening, trend resumption is in the cards. I anticipate extreme volatility overnight and into the early New York session.

Unfortunately, I cannot issue a forecast as yet because I need to get to rest. I will assess the market later and hope to share my thoughts then.

Britt Maras – Senior Currency Strategist

The past few trading days we saw the market as rather confused and a bit imbalanced. My last forecast suggested I was focused on a bear cycle of which one of our Trade Alerts offered at least 35 pips before settling for a 10 pip stop.

Subsequently, today’s early afternoon Market Timing Alert precisely coincided with a bull entry at 3881 with a defined target at 3979; it’s not always as clearly defined as that but all of us experienced a handsome thrust. It’s no fun to be wrong, even for a stop loss under 20 pips or less but it surely is delightful to reverse my focus and capture a great opportunity.

Current EUR/USD Structure Still Carries A Blush Bullish Intent

Resistances: immediate at 1.3969-97, 1.4037, 4079, 1.4126 and 1.4213

Supports: immediate at 1.3928-18, 1.3909-01, 1.3894-84, 1.3877-65

We still have T2 bull target at .14037’ish, and then 1.4126 for a mid-term T2 and a final T3 at 1.4200+ should it exhaust itself that far. I would be satisfied with T2.

Currently I can envision hitting resistance at or below 3997, a slight pull back to 3970 levels – then a head tap at 1.4017’ish, a slight pullback to 1.4000 (if not a straight burst north) within the attempt onto T2 or beyond. I feel like exhaustion can set in upon near T2 or beyond; or even shy of T2. Caution is advised.

I hope to issue a Trade Alert soon BUT I prefer to see a test of support versus entering a breakout. Stay tuned for MTA’s and potential.

Britt Maras – Senior Currency Strategist

If Forex Traders followed my commentary (Dollar Index Delivers Volatility to FX) and considered the preferred ‘boomerang’ resistance for a bear entry you may be pleased. We issued a real-time trade entry after the mid 3900’s was rejected and have banked and lock-in at least 40 pips per lot.

Currently I maintain a bullish outlook for the U.S. Dollar Index with a bearish forecast for the EUR/USD. I plan to issue an additional bear Trade Alert for the pair but I need to see some price action develop.

Resistances: immediate at 1.3845-57, 1.3881-97, 1.3917-25 and then 1.3970 levels

Supports: immediate at 1.3823-17, 1.3801-1.3791 to 1.3774/49, 1.3683, 1.3660 and then 1.3569 or lower to 1.3333

As suggested in last evening’s commentary – I hoped for the ‘boomerang’ trade opportunity to enter short the single pair. The only problem is this morning the business media at-large could not shout louder about some kind-of-head-and-shoulders setup in the eur/usd. In any event, again this evening and overnight – I will remain vigilant and be equally willing to take a bull position above key resistances listed above.

Conversely – I maintain the bearish outlook to sell a rise to key resistances with reasonably tight stops and/or make a bear entry at my T1 listed in Friday’s commentary at 1.3774 levels. Let’s get some rest and hope we don’t miss any fireworks; my guess is we need to do a looped d’ loop.

If we can make a rapid break of immediate support listed above for our current open short position that is locked in — and THEN set new resistance at 1.3797 level (+/- 13 pips) – then the door may be open for the big bear move. Let the lock-in protection run as is! I will issue Market Timing Alerts later.

Britt Maras – Senior Currency Strategist