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The Trader Advantage: Overbought Moves May Have To Reverse
Excerpts taken from The Trader Advantage Program
The Trader Advantage Trade Plan and 25 pip Swing Point trades caught the short Usd/Cad reaction to Canadian jobs data that was strong at 20K jobs and a 8.2% Employment read. The major pairs have pushed the Usd to the lows of the week, with questions now raised as to whether the moves can hold ahead of a red-flag calendar from Wall Street. The 4 Hour charts are mainly overbought (reversal), into short-dollar trends.
The strongest two currencies of the last month of trading, the Aud and the Cad failed to initially follow the positive momentum seen by both the euro or and British pound overnight. From the start of the Asian session, the Cad fell 20 pips, the Aussie gained 25, as the euro and the pound moved 100 pips.
The European pairs moved in reaction to the European equity markets moving higher, in what looks like an automated play that caught traction and swept orders up ahead of it. The Usd/Cad move lower was instigated by positive employment data that registered a healthy 20K new jobs and a decrease in the Unemployment rate to 8.2%.
The global markets are all overbought and may struggle to hold these areas going into the last session of the week. Whatever happens, it sets up a solid base to work from next week.
The currency market was able to move higher for the first time in the last few weeks without the aide of any red-flag reports. The newswires were relatively calm during the Asian and the European sessions, but not the same can be said about the upcoming U.S. open, when red-flag releases will test the resolve of the newly formed long-equity, and short-Usd positions will be tested.
Forex Times- 8-9pm, 2-3am, 6-7am EST. Outside of these, look for 25 pip Swing Point trades The Trade Plans house the set and forget numbers, the Swing Points offer intra-day set-ups. Detail is in each Pair Analysis area.
The euro has finally managed to show some bullish momentum, after three months in which it moved almost exclusively lower. With the overnight gains, the euro breaks above a resistance trendline that held the market since Feb 09. To the upside, the next important resistance area lies in the 1.3850 zone. The Eur calendar is clear of any red-flag reports in the near-term, and therefore the tests of upside resistance may need to be banked in stages. Price action is likely to remain volatile.
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