Catching the morning move

Whilst the Euro and Cable look massively oversold against the US$ but keep going down, swing traders need to be alert to a bounce back that could come at any time.

Safer trades are to gather several modest moves during the main morining trading session that can add up to some significant pips. This morning the Euro put in small, false downside breakout, before recovering above the early morning trading range. As you can see from the chart this classic pattern also shows how the colour charts and gravity line managed the trade entry as price bounced off the blue line.

The next Forex trading workshop at the end of the month will cover these techniques in detail, click for info.

I am taking a week off from Saturday to relax and chill on an island off Toulon in France, my wife has insisted I don't look at a screen all week!

Euro

Well, Cable found no friends yesterday after an early morning scalp trade it was all downhill. Whilst Cable tumble, the Euro remained relatively stable and this morning it's showing signs of a recovery, held back by the shooting stars shown on the chart.

Despite markets bouncing around and so often appearing to defy logic, there are always plenty of opportunities and short scalp trades producing 20-40 pips keep presenting themselves. The major trend is less important for these trades when a combination of identifying a consolidation pattern, ideally at a fib retracement area together with evidence of strength or weakness from volume or basic price action is all that is needed. Plus, of course the trader has to be prepared to press the button without delay to both grab the opportunity quickly but also protect profits and avoid losses!

Cable recovering

The Euro gave us a useful intra-day run and now that UK banks are now uderwritten by the state, has given Cable the edge over the other troubled economies.

The chart pattern is developing with this potential base that could give us the start of a bounce back.

What a difference a day makes

The Euro is bouncing back this am forming a 'Cup and Handle' that just has the Sunday night gap in it's sights.

The Australian rate cut overnight has now set the marker for the UK to follow suit with a substantial rate cut.

And that's it for the Euro...

The Swissy bounced down through support and is now pushing against resistance as the Euro tanked overnight. The chart shows Cable and the Euro with Cable steadying as it bounces around the lower end of this major support zone. Short term charts are throwing in confusing signals in this very oversold area.

The bigger political picture has now revealed the fragility of the European accord with Germany looking after it's own interests at the expense of other members of the community. This weekend could prove to have been one of historical note for the future of the Euro.

In limbo

It's Non Farm day again that causes excitement on the first Friday of every month, figures due at 1.30pm UK time. Add to this the continuing uncertainty over the US bail out package,and it's no suprise that currency markets are going nowhere this morning.

The Swiss Franc shows how it tried to make a new high yesterday and resistance kicked in as it formed a double top on the daily chart. A break, either above resistance or below support, is needed.

Jappy Strengthens

This could be time for the USDJPY pair to move down. This morning it has gone nowhere, sitting within a plateau formation.

If it can move below the low of the day so far - 105.70, we could see some good downside moves.