Will the Euro Collapse?
Trading a true currency collapse is a rare opportunity. Most
market participants are familiar with the story of George Soros
and his ride to prominence on the back of the collapse of the
British Pound. Is it possible that a similar opportunity may
Forex traders trade with the trend, that’s a fact. Trends are the strongest indicators of how well the currency pair are doing over the last couple months or years. Trading the trend may sound simple and many traders are taking it as a “de facto” of their overall trading strategy, if so … you really need to reconsider your Forex strategy.
(GRHU, MCGC, CPHC, FXEN) Stock Updates by PennyToBuck.com
Retail positioning is staying pretty constant the last few days, GBPUSD has been seeing a strong shift in sentiment however, with increasing numbers of retail traders becoming long the pair throughout the sell off. Although still in the neutral if this retail buying continues we may take a dip into the short zone. GBP Current Account data released at 4:30am EST may tip the balance.
Current positioning is remaining firm, we're seeing the expected pullback in EURUSD, but the pair remains in the strong long zone overall. With the release of the Annual Budget in the UK at 8:30 am EST we expect some volatility with GBP crosses, this could have an impact on retail positioning.
EURUSD and GBPUSD continue to make parabolic up moves whilst retail traders increase short positions. We would advise caution in the short term as strong moves like this do not tend to last, so we may see a pullback in the short term. We remain very much in the strong short zone as have for a long while with the USDCHF and USDJPY.
Intervention. For the first time in a decade we're seeing multi-nation intervention to help weaken the Yen, as a beleaguered Japan works to recover from a multi-faceted disaster. Weakening of the Yen eases some of the strain on Japanese exporters, many of whom are being forced to keep factories closed due to power shortages and structural damage after the earthquake.
Some dramatic JPY strength overnight is pushing JPY crosses into in the short zone. USDJPY remains in the strong short zone as it has been for the last few months. GBPJPY has edged its way into the short zone, and although still in the neutral zone, EURJPY is not far behind. Developments with the Fukushima Nuclear plant could have a major impact on overall JPY positioning
In yesterdays session we saw some very 2 sided action especially in the Euro, we initially saw a EURUSD sell off as a flight to the safety took hold due to a sell of in far eastern equities. In the early part of the NY session this fear reversed and strong buying took us back the levels at which we started the day.