Tuesday, June 16, 2009

Yes YOU could've earned some pips

Anyone that would've followed my trading recommendation that I mentioned in the post Sunday would've had 200+ pip profit right now. Is it a reason to keep following my advice? Absolutely not! Is it a reason to keep reading this blog? I think so, because it not the first time I've correctly analyzed the EUR/USD currency pair. So what's next? Well, currently the pair is moving still in a sideways market. I honestly expected it to be much lower then 1.3840, a sign the Euro is still holding on tight despite all the negative news coming from Europe and Russia's remark to keep the USD as the main currency. However I think this is also a result of higher oil prices, speculators are doing a great job at the moment driving the price upwards. We've seen this troubling trend in the past not that long ago (last year). Higher oil prices most likely translate automatically into higher gas prices.

Oil prices from April until today so far;

Now let's take a closer look at the currency pair at the moment;

What does this have to do with the EUR/USD pair. You might think that rather a commodity currency would be more relevant. However, there is a correlation here. The strength of the USD is being tested from both sides, from the commodity standpoint as well as the overall market. Both factors are currently pushing the EUR sideways against the USD, making it hard to predict where this is going to go. I think the value of the EUR will be pushed further down but it will take some more time. A few weeks at least. At the moment I'm still bearish when it comes to this pair. If it breaks support the ride downwards is on, all aboard!

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