Forex Year End Review: A brief review of what was a historic year
CLICK HERE FOR THE YEAR IN REVIEW SUMMARY
Dear FXDD Customers,
2008 was indeed historic. At no other time in history other than the Great Depression has there been such a year. Massive monetary and fiscal policy stimulus were initiated in an attempt to prevent a global meltdown in the global financial system. Along the way, bubbles in what seemed like everything from oil, to food, to stocks to bonds, to currencies to housing were formed or broken. The year ended with a Ponzi scheme that defrauded the most wealthy of the world of 50 billion dollars and the US Big 3 pleading for funds to prevent bankruptcy. Could there have been a more worse year?
Currencies had a roller coaster ride but relatively speaking weathered the storm of a meltdown. Prices and liquidity remained relatively stable throughout, with the exception of the year end period when volatility and liquidity suffered in some less liquid currency pairs. We at FXDD are hopeful that come the New Year, markets become more normal, but time will only tell.
I, and my other blogging colleagues, would like to thank you for your words of thanks and support. We do hope that in 2009 we advance our efforts in a way the makes you more aware of some of things that are happening in the market that may effect your trading P/L. We would also still implore you all to spend independent time studying the markets and coming up with a trading style that is congruent with your life style and risk tolerance.
Thank you all for your business and we all wish you a happy and healthy 2009.
Greg Michalowski and the staff at FXDD.
Forex Trading EURGBP moving back down again
The EURGBP is moving back below the 200 hour moving at the 0.9525 level after spiking higher on the GBPUSD roller coaster drive. A close below this level today should solicit additional corrective action into the New Year. A target would be the 38.2% retracement of the last move higher comes in at the 0.9203 level.
Forex Trading Markets have quieted down a bit after a wild ride
There definitely was some end of year action in the GBPUSD that ran into a void. The price action took the pair down from a high of 1.4696 at 10:20 NYT to a low of 1.4350 at 11:00 AM. The 100 hour moving average comes in at the 1.4596 level. The price has just moved back above that level now.
Forex Trading Illiquid year end trades send GBPUSD down sharply
The GBPUSD fell out of bed, briefly making new multi year lows (and new lows for the year) at the the 1.4350 level. The pair came down from 1.4698 in the same hour bar. The pair has since moved back above 1.4500 in what is just insane trading conditions.
The move is being exagerrated by the illiquid conditions and could persist for the next hour before the market begins to die down.
FXDD will be closing today at 2:00 PM NYT and will reopen at 12:00 AM on January 2nd.
Forex Trade: Markets to get volatile as 11:00- 12:00 hour approaches
We are starting to experience some addtional volatility in the market as the end of year squaring up in London and Europe occurs. This will continue to 11:00 AM New York time when the fixing for the day occurs and should continue to noon NYT when London and Europe head home. Be aware of the strong potential for added volatility and illiquid conditions.
Forex Trading GBPUSD breaks thorugh 100 hour moving average
The GBPUSD has been able to break above the 100 hour moving average (see previous post)and have a close above the level (the current level is 1.4603). The market should find support against this level now. As long as the price remains above this level, the pair should continue the correction to the upside.
What may help the GBPUSD move is if the EURGBP can move below the 200 hour moving average. The pair has been below this level on two separate hourly bars but each time the price has not been able to close the hour below the key level. If the pair can move back below and solicit some momentum (i.e. close below the level), it should lead to further declines. This in turn may help the GBPUSD move higher.
Forex Trading USDCHF moves toward support
As per the previous post, the USDCHF has moved back down toward the support against the 100 hour moving average. The level is currently at the 1.0633 level. The low so far has been 1.0646. Watch this level. A break may lead to some stop sellling.
Forex Trading Key level for the USDCHF looms overhead
The USDCHF moved higher today, gaining momentum as the pair broke through the 100 hour moving average at the 1.0641 level. The pair moved up toward overhead resistance that comes in at the 1.0750 area where the 50% retracement of the recent move down from the Dec 19th high and the 200 hour moving average (grren line in the chart above) are located. The high for the day reached 1.0742. A break of the 1.0750 level will be needed to push further to the upside.
On the downside, the 100 hour moving average currently at the 1.0635 level will be needed to hold in order to keep the momentum to the upside intact.
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