Monthly Archives

April 2016

My Belief In Forex Fundamentals Shaken

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Last week was a technical trader’s fantasy and a fundamental trader’s nightmare. Three examples:

  • Oil increased substantially in spite of extremely negative oil news
  • GBP increased significantly in the face of two important UK news misses
  • JPY nosedived on Friday without any noteworthy news out of Japan

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How to Identify and Profit from an Obviously Weak Currency

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On Monday and Tuesday (April 11-12, 2016) the USD weakened. AUD, NZD, CAD, and the GBP all racked up good gains for the week as of Tuesday’s close.
The EUR however, failed to rack up ANY gains and was actually DOWN 15 pips for the week as of Tuesday’s close. EUR weakness was obvious:
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Selling the EUR on Wednesday versus AUD, NZD, CAD or CAD would have worked out well. Identifying the USD strength
on Wednesday and selling the EURUSD pair would have worked out best (the pair was down 110 pips at the close).

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Why buying dips and buying support levels can be a fools game

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The USDCAD pair was the big mover on Friday; driver by a cluster of negativity:

1) Widely bullish CAD employment report

2) a roughly 6% jump in the price of oil

3) the USD being the weakest currency on the day

4) Risk-on environment driven by higher stock and commodity prices

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Buying the pair “blindly” using technical technical analysis exclusively (dips, Fibonacci retracement levels, support etc)
makes no sense to a seasoned Forex professional with one eye on the charts and the other eye on the stuff the charts
don’t know about (fundamentals)