EURUSD falling back toward 1.3613 support as Gold spoils the party
Written March 10, 2010 at 12:22 PM EST by Greg Michalowski
The EURUSD is falling back down toward support at the 1.3613 level (100 and 200 hour MA level) as the sharp fall in the Gold price has market participants reversing their positions (Low reached 1.3621). The market has bounced higher as the converged moving averages, do remain a key support level. They also give traders a level to lean against with stop orders on a break below it. On the topside now, the 1.3654 level comes back as resistance as the market remains range bound.
Categories: Forex Trading |
Loading ...
A lot of short term investors are in the markets with huge capital and high risk trades: They are managing risk but taking only short term positions. Holding not for long and realizing profit quicker than usual.Can it be the case? I might be wrong
The market is characterized by what seems to be traders with very limited foresight on market movement. THis is a characteristic of a non trending market. We are getting used to the levels and the market gets used to them as well. We know 1.3654. We know 1.3691. We know 1.3613 We know 1.3585. We know 1.3551. So when the market reaches these levels, the reaction is to get out (with the rest). Eventually, the balance will shift to net buyers or sellers, and those traders will catch the sell high/buy low crowd off guard and push the price through support (or resistance) and continue to push through in a relentless fashion. The traders who are offsides, will provide the fuel for the fire as they scramble to cover and cover and cover. It will come. We just don’t know when.
Step 1: Market trends heavily.
Step 2: ‘Smart’ traders take their profit.
Step 3: Market consolidates the gains. (ie .taking sucker bets, because ‘smart’ money is already out of positions and patiently waiting for a clear sign which can be a technical or fundamental catalyst)
Step 4: Repeat