Howdy Folks,

Big day today, equities up another 200 points on the heels of the G20 summit over the weekend. Apparently the markets like the idea of even more cheap investment capital being promised by the G20. GBP/USD, our currency of choice to cover in this blog had a great day as well, up about 150 pips by my daily candle’s range. The resistance at $1.67 has been broken and now we are trading around the key resistance pivot. I personally think a pull back is in the works before the pair moves higher on dollar weakness. I think a test of $1.67 would be appropriate, but nothing is a guarantee. As a bargain hunter today marks a day of in action.

The charts attached to this post are just some rough planing guides as to what might play out over the next few weeks.  Notice that GBP/USD turned higher along the 38.2 percent retracement ratio last week, this may put the 138.2 percent extension ratio in play if the GBP moves higher. If the resistance barrier holds, perhaps a move back to 61.8 percent is in the works. I think onward and upward is the likely path.

Best of luck, more tomorrow.

Ryan

IMPORTANT NOTICE: These comments are for information purposes only. My opinions or other information contained in this post do not constitute investment advice. It should not be understood as a direct recommendation to buy or sell any currency contract or other investment vehicle. Forex trading involves substantial risk of loss and is not suitable for all investors.

Howdy Folks,

Opening gaps do not happen as often in the spot market as they do in exchange based markets but occasionally the Sunday open can hand us a nice trading opportunity. I think the best presentation I’ve seen on trading gaps in the spot market was done by Sam Seiden at FXStreet.com titled Professional Gaps vs. Novice Gaps in the Forex Market. If you would like to know the difference between a “novice” gap and a “professional” gap I encourage you to watch Sam’s presentation:

http://transcripts.fxstreet.com/2009/02/professional-gaps-vs-novice-gaps-in-the-forex-markets.html

This novice gap has offered approximately 100 pips since it formed one hour after the Sunday open.

Best of luck this week,

Ryan

owdy Folks,

I have finally finished my book! I’m going to take advantage of my new free time and get back to blogging! I have really enjoyed our webinar chats and I’m looking forward to blogging here regularly again. Today being Sunday I’d like to share some planning thoughts on GBP/USD before the week gets started. Last week the story was consolidation after the breakout following the Fed’s statement. $1.6100 held resistance while $1.5800 held support throughout the week. If we measure Fibonacci extensions using the high / low preceding the breakout we find the market turned at the 50% ratio and reached the correlated 150% extension last week. This leads me to suspect some upside potential for GBP/USD over the short term assuming the selling is over with for now. The BoE has a rate statement scheduled for Thursday. If I had to guess, I’d say the pair is bid up early in the week and sent lower later in the week of course I could be totally wrong. If $1.58 falls early it appears the ride down to $1.53 could be swift. The fundamental calendar for dollar is light this week with only ISM, Unemployment and Trade Balance data expected. Regardless of direction, price action will ultimately lead the way.

Monday’s Webinar Link

I’m looking forward to the webinar tomorrow. I did a special webinar last Friday and we had a huge crowd of folks in the room! I hope you can join us tomorrow for our regular chat about support and resistance, “bargain days” and trading around your day job. The webinar starts at 12:00pm Pacific / 19:00 GMT. You can register via this link:

http://www.fxstreet.com/live/sessions/session.aspx?id=5261c7d5-80f6-4f06-9b99-6539c8505cb2

Click on “Register for this Session”.

Best of luck this week, more tomorrow.

Ryan

IMPORTANT NOTICE: These comments are for information purposes only. My opinions or other information contained in this post do not constitute investment advice. It should not be understood as a direct recommendation to buy or sell any currency contract or other investment vehicle. Forex trading involves substantial risk of loss and is not suitable for all investors.

Howdy Folks,

Another day, another high. The GBP/USD rallied again today closing strongly above $1.66. The contrarian in me screams “pull back’s a coming” but the bottom line is we really don’t know what tomorrow will bring. The next major supply level isn’t until $1.6950 but there could be some minor resistance in the $1.67 area. On the long side, I expect $1.66 to be tested from above but there may be enough momentum to pop GBP higher before that happens. I think $1.66 or $1.67 is definitely in play for a potential bounce during the upcoming session, I’d watch those rounds closely. On the bargain day front, nothing much to speak of. This quick rally offered a good deal on Monday but left anyone who missed that in the dust.

Best of luck,

Ryan

Howdy Folks,

Please tell me you caught some pips off Tuesday morning’s breakout!

OK, so GBP/USD has paused below $1.66 and along a minor trend line which begs the question, is a breakout coming or will the pair go lower from here? It’s worth noting the COT data remains net short on this currency and CCI is definitely in “overbought” territory. I may be a price action fanatic but I do have a weakness for the CCI indicator, I just like it for some reason. It’s a decent trend tool but as always, price action is king in my opinion.  Tomorrow the fundamental calender may help get this pair moving. We’ll start off with the Halifax HPI data which showed improvement last month followed by the BoE rate statement. Should be an interesting day to watch but I need this pair to convince me on a direction before I take any further action.

How about that AUD/USD? End of the road for now? What do you think?

Good luck,

Ryan

IMPORTANT NOTICE: These comments are for information purposes only. My opinions or other information contained in this post do not constitute investment advice. It should not be understood as a direct recommendation to buy or sell any currency contract or other investment vehicle. Forex trading involves substantial risk of loss and is not suitable for all investors.

Howdy Folks,

I hope you had a great trading week! Just a reminder, Monday I will host another webinar focused on support and resistance techniques you can trade around a busy schedule or day job. If you would like to attend you can register via this link:

http://www.fxstreet.com/live/sessions/session.aspx?id=69dbc41f-0165-46f8-94a8-78987afa5095

Last week we had some great questions and it was a lot of fun. I hope to see you on Monday! Have a great weekend!

Ryan

Howdy Folks,

I didn’t post a New York preview this morning because I was busy selling USD/CAD this morning. I wish I had paid more attention to GBP/USD though because it had a great run up to the 61.8% ratio after $1.62 broke long. If you were around, I hope you made some pips on that run. Anyway on to this evening’s GBP/USD chart. There is some fun stuff going on GBP/USD’s daily chart. I talk about “bargain days” often in my weekly webinar and tonight we have what I would call a “bargain day” live, and in living color to study. There is a plethora of nifty stuff happening around this bargain day including the bottom of a larger ascending channel which has broken to the downside, a minor channel trend line and of course the round number of $1.63 just above today’s high. In my opinion $1.63 will probably be challenged overnight so I’m looking for a sell north of $1.63.

Here’s to hoping you U.K. traders gun $1.63, hint hint….

Best of luck,

Ryan

IMPORTANT NOTICE: These comments are for information purposes only. My opinions or other information contained in this post do not constitute investment advice. It should not be understood as a direct recommendation to buy or sell any currency contract or other investment vehicle. Forex trading involves substantial risk of loss and is not suitable for all investors.

Howdy Folks,

Nothing in the way of “bargain days” to speak of tonight so on that front I’m awaiting a decent opportunity to talk about. This morning I posted some thoughts on GBP/USD ahead of the New York session and I’d like to follow up on that. First, I received a few emails and people seem to like the idea so I’ll do more as the days roll along.  Second, believe it or not I actually took a long GBP/USD trade for a short period this morning that booked some profit so I thought I’d go over that one in tonight’s post.

When planning trades before the New York session I like to see the market trading near support or resistance from the previous day with a decent support / resistance or Fibonacci based profit target. Trading during an active session is a little more dynamic and things happen quickly but with a little practice you can use entry or market orders as your headed out the door. One thing is for sure though, sometimes trading on support and resistance is like running into a burning building when everybody else is running out.

As I wrote this morning I liked the support along $1.62 from yesterday and I anticipated a bit of a bounce on this level which we got. I closed my long near resistance at $1.62451 for 54.6 pips. In my opinion round number bounces are only good for 30 - 50 pips in most cases plus it was up against a nice inter-day resistance line. I really should have sold short again when the 15 minute candle closed with that gravestone / doji / “yo fool I’m reversing again” candle, but I didn’t. I hope you did!

See you tomorrow!

Ryan

Howdy Folks,

Well it’s a new month and another great morning to trade. I thought I’d add a new feature to the blog today by posting a morning New York session thought on GBP/USD whenever I see something interesting to talk about. If you like this idea, let me know and we will do more of them. Last night I talked about $1.62 potentially holding support and this morning we see the round number and it’s demand level getting quite a test. The big GBP/USD sell off overnight was apparently triggered by PMI data that missed the market, at least that is what the financial press wants to attribute it to. Perhaps, but one thing I’ve noticed about fundamental shocks is the price action is usually not sustainable unless the data is a huge game changer. So the question is, will $1.62 hold or not? I have an angle on this I’ll share as the day unfolds but this is definitely a demand level worth watching in my opinion.

Best of luck today!

Ryan

Howdy Folks,

We had a great webinar this afternoon full of really good questions. I had a lot of fun and I hope you can make it next week! There have been a few comments about the time scheduled for this webinar. I realize that 12:00PM / 19:00GMT isn’t that convenient for folks who work full time. Originally I thought these would be recorded so you could watch them on your own time but as it turns out they are not. I will chat with the FX Street folks about adding another time slot that is more convenient or moving the one we currently have.

On to tonight’s GBP/USD chart. I decided to accommodate last week’s price action by drawing the channel slightly lower. Although technically today’s daily candle closed in bargain day territory it is really a questionable sell in my opinion. Just reading the chart we see a hammer on the daily, rising support through the channel and the round number $1.62 in play here. On the four hour chart we see a possible 1-2-3 reversal pattern. However on the sell side the fundamentals may play a factor. Tomorrow there are three reports due out for the U.K. including the Halifax House Price Index. The Right Move HPI report missed the numbers by a long shot and helped fuel a GBP/USD sell off although the Nationwide HPI last week showed improvement. Even with the bullish technical picture the fundamentals may end up crushing this currency. Either way, yesterday was a bank holiday in the U.K. so I expect some fun as traders return to work tomorrow.

It will be interesting to see if today’s demand level around $1.62 holds any assault as London comes online tomorrow morning but for now, I’m patiently waiting for this currency to do something interesting…

Best of luck,

Ryan