Washington Wrangles

Whilst the Euro still looks vulnerable to a sell off, I am reminded of the old adage, Buy the Rumour, Sell the Fact.

The big rescue plan is now mired in negotiaitions and, supposing is eventually passed and approved, there could be a flurry of bullishness for the US economy and so the $ would strengthen. Alternatively, the markets could react once the 'good' news is out and the opposite would play out for the US$.

Marking time

Will they or won't they is the question on everyones lips as we await the US Congress decision on the bank rescue plan. Consequently the US$ is in a dither with false breaks one way then the other.

An ideal market for scalpers who take these 15-40 pip pops in their stride and make a good living doing these several times throughout the day without caring which way the big trend is going.

Still Blue

Cable has been charging ahead but then paused. The Colour Charts are still blue, add to that the currect 240min candle that is engulfing the previous one. Supposing this Candle doesn't reverse, it tells us the up move is not over yet.

Colour Chart Trade

On a morning when the FX market can't quite make up its mind, the Colour Charts managed a useful 45 pips or so . There were two entry points and one clear exit that just needed the trader to spot the change in colour.

The next FX workshop will fully explain how to apply the charts and find these morning trades.

http://www.clickevents.co.uk/forex-trading-seminar.htm

First trade of the day

Overnight, the majors made some big moves as the US$ gained from some semblance of stability returning.

The Euro bounced up nicely from a support zone for a very useful 60+ pip run.

Marking Time

After the excitement comes the pause. The Euro and the other majors, are in consolidation mode today and, whilst they have given us some useful scalping trades, the next trend has yet to show itself.

Above the blue line, or below this range, then I am getting interested but not before.

In praise of the Euro and Yen

There is nothing like a little volatility now and again and we have certainly had plenty in the last few days. Whilst Cable is pausing and correcting from its big move on Friday, one of my favorite pairs is the EURJPY.

This one has a typical daily move of 150-200+ pips, as the chart shows it moves in trends with useful rallies and corrections that enable the careful trader to jump aboard. Some traders prefer slow and steady movers but this pair, whilst needing wider stops, can generate the pips quickly.

Attempting a base

The Swissy correction soon ran out of steam and both the Euro and Swiss made new lows against the US$ that shows no real sign of stopping its bull run just yet.

However, right now, Cable is attempting a base at this 1.75 long term support level ahead of the MPC this morning. Others to look at include the EURGBP (down) and possible basing action with the EURCHF.

Swissy, what next?

Cable popped down through the lows later yesterday but is now right back up at levels from yesterday morning. Has the US$ gone far enough for now? If so, there are plenty of snap back candidates with the Aussie Dollar high on the list.

The USDCHF (Swissy) has been pushed back from an area of major resistance at 1.14 and the chart shows a possible reversal in the making. It is supported at the red line showing a double touch bottom, if that goes, then a correction could be well worth trading.

Quite a night

Following the NFP last Friday, Cable then completed a clear 'Cup & Handle' pattern on the 15 min chart than ran for an hour or so and it followed with an a-b-c correction and another saucer bottom.

The Fx market got it all wrong with the first reaction to the US Fannie and Fredie bail out that gave a 300 pip run this morning from an MPR top. So should we keep selling Cable today? The answer is in weighing up the odds of a break down through the Friday low as opposed to a potential bounce back.

Given that Cable has run through more than it's average daily range so far the odds favour at least a pause here.

Non Farm Payrolls today

Traditionally, NFP day is one to avoid as this monthly announcement can cause dramatic swings. Trading in the early morning and after the figures at 1.30pm is considered safer!

The EURCHF trade from earlier this week became a break out trade as the range broke and from yesterday Cable popped down to within a whisker of the 1.75 level at 3.00 am this morning as expected.

Right now it is setting up a very tidy saucer bottom that just might uoside potential - but watch out for NFP suprises.

Cable ranges

Whilst the EUECHF pair is flirting with the lows of the range at am all important round number, attention was on Cable on the interest rate day.

The morning trade moved up from a good base that followed all the multi point reversal rules. The chart then shows the pullback with a continuation candle and the it was all over with the final Shooting Star.

Today's expected rate statement and US figures has done nothing except to bring cable back to almost where to started today. However, there still seems to be more for the Dollar to do and students of the Bat pattern will have seen the target area on the weekly charts, not to far from 1.75.

Potential Range Play

The Swiss France has continued its run this morning and sooner or later we will get a reversal but there is no strong signal yet from the major currencies - with the possible exception of the Yen that is partially matching Dollar strength.

However, there are other crosses. For 5 months the EURCHF has been in a trading range that could of course break out. But equally, when price has reached the extremities it has bounced back. This is one to watch for clear signs of a bounce or break down.

Swiss Franc Weakens

The USDCHF daily chart shows just ho far it has moved as the US$ has strengthened against the major currencies.

Resistance lines showed the consolidation area as an intial target that is now below current levels. Price action has been positive throughout this area and there seems to be more to come.

USDCAD follows through

10540 was taken out cleanly and the rally gave us well over 100 pips. What next? Today is Labor Day in the US so trading in general is likely to be thin.

The USDCAD pair is now flirting with previous highs and several resistance factors here including Fib's, pattern prediction reached and so on could limit further upside today or set up a retracement. For now, we have seen a very acceptable profit for the taking.

The latest correlation video has now been re-uploaded and is ready for TC members here.