Tuesday, June 23, 2009

Anyone recovered from the heart attack? Read on..

I promised a second update today since nothing really was clear this early morning when the USD plummeted against the EUR, which turned out to be a pure fundamental incident that only insiders could've known. (This is one of the downfalls of Forex, delayed fundamental data)

Now what wtf happened?!

Existing US home sales figures came in and were at 4.77 million, less than the 4.82 million most analysts were expecting, but still a little jump from 4.68 million the prior month. Still less though. Also the European PMI (Purchasing Managers Index) numbers were released today. A somewhat important indicator I think. The more companies spend, the more money they are expecting to make. Those numbers were 45.5 (compared with 43.3 the prior month) so if you would've had this information no wonder you would've been dumping the USD. Thankfully I bailed out at 1.3911 and actually had a profit already. For those that were shorting the EUR/USD you'd be out some money. Hey I didn't see this coming either.

OK WHAT'S NEXT >>>

I hear other analysts saying about key levels (critical support levels) and whether or not the Eur will maintain those levels. If it breaks through one sell, if it breaks through the other, buy.
To tell you the truth, I have no idea how they come up with that and what technical indicator they use to come to that conclusion. All I know it's a fundamental game from now on and all eyes are now on the FOMC (Federal Open Market Committee) rate decision . Currently at 0.25% and is expected to remain the same (expected throughout the whole year) , although things can happen quickly if it's changed. For this, I'd like to refer to DailyFX's article Trading Ideas to find out more about how to trade this event.

The "chart that gave anyone a heart attack that was short this pair" shown above. Although every technical indicator shows to buy. Caution is advised. I'd stay away from any trade at the moment until the FOMC decision is released. After that it may have a better direction whether that's up or down.

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