Forex Trade Strategies – October 29,2013
It would appear that the U.S Dollar is making its “swing low” here this morning, suggesting that a bottom is close at hand. This one isn’t likely going to be your “usual” bottom in the dollar as it’s now reached extreme oversold levels as well as an area of sizeable support.
As we’ve discussed here many times – when the elastic band gets stretched “too far” the corresponding “snap back” is usually quite fierce, as many inexperienced traders are caught leaning to heavily in the wrong direction.
Wednesday’s Fed meeting/ announcement “should” likely provide the catalyst, and it will be very interesting to see which way a number of asset classes move with respect to whatever is said.
When looking “long USD” here its fair to say that the currency pairs EUR/USD as well GBP/USD should turn downward, as well USD/CHF to the upside – these are pretty much a given, but the commodity currencies will remain “on hold” until we get more clarity.
Both AUD as well NZD have taken “reasonable” turns to the downside as of late “along with” a continually falling US Dollar so……it remains to be see if these will also “continue lower” as the USD carves out this turn.
I plan to trade this quite aggressively as I expect the USD move to be a whopper. Off the top it usually doesn’t bode well for the gold and the metals when we see the Dollar rise….but if this time we see a “rise on flight to safety” it’s not at all hard to imagine both gold and the USD moving higher together.
I will be watching / posting via twitter for real-time moves , as well looking to celebrate my 1st Year Anniversary here at Forex Kong tomorrow!