Just a quick post to record the fact that the Sterling Pound has met its larger objective near 1.4570 last night and bounced sharply. (refer this post that says stay short in sterling for now). It has been a very tough week for most traders and most are licking their wounds. The question many finance managers will ask me when I return to work after the weekend is whether we will get another dip in the Pound to buy! Provided we don’t run away to the upside, we should get a decent move to retest the downside. It is typical of markets to make sure that the bottom is a strong one. We will look at the charts on Monday and determine our next move in the currency markets.
Well folks, you all know that I have been working on the paradigm of a diagonal triangle, and provided for a throw-over at the end of the 5th leg of the pattern. This throw over has happened last night and we should ideally look for a strong close today. Take a look a the chart and you can decide for yourself.
Its been a while since I posted a Yen chart. We have been running into some selling at 96.23. Considering that the low seen earlier today was 94.50, even this is a strong move. Part of the credit for the recovery goes to the Japanese Finance Minister who said that rapid forex moves was undesirable for economy. and there is a need to avoid rapid forex moves at all cost. Now we all know that this market is not going to turn around unless all the G7 central banks show up in concert (and even that will work only if the market is spent on one side). Yet, some knee-jerk reaction is to be expected, and if we break the resistance at 96.23 in New York today, maybe we will get a move to 96.64. When we get there, we should try and sell some dollars with a stop above 96.74. That is a very close stop, and we could see both the sell and stop-loss order done within seconds of each other! But then we do have a resistance at 96.69 and if one wants a really, really close stop, this is it! Enjoy.
By now you would have realized that what this blog is attempting to do is to give you a sense of direction, and also highlighting pressure points. The most recent example of the value of some of the charts I post here is the call on Sterling yesterday. Take a look.
Here is yesterday’s post for easy reference.
The Saudi markets have lost more than half its value since the beginning of the year. How much more pain can they bear? Looks like there is scope to fall by at least another 12%. Check out this chart.