Wednesday, July 15, 2009

Failed Fibonacci pattern

I hate these posts because I have to admit I did something not right. Truth to be told this is the first time I'm doing this and I don't like it, one single bit. It's not that disastrous but still it's an error in my calculation. Why am I bringing it up? Of course I want to learn something from my mistakes and one of the first steps is to acknowledge that you made one, and in Forex you can only learn more to elaborate on the mistakes your making in order to prevent further happenings in the future. What am I talking about? The EUR/USD pair (read yesterdays post for a trade analysis), I saw (or at least I think I did) a perfect Fib pattern emerging with my trade. Now I didn't expect the DOW to rise over 200 points(!). The DOW is a pretty good indicator in the currency trading markets. Overall I saw a relationship in the past few months with the DOW up US Dollar down. This happened today as well. However, the sudden high rise in economic confidence that was expressed by a higher closing number on wallstreet dragged the value of the USD down against the EUR. I thought for sure this was going to happen gradually, 50 to a 100 point a day, not 200+ in one day. Question is of course if it's able to sustain this trend. As soon as wallstreet stabilizes and shows actually a 'trend' then this pair is much better directed, in my opinion. The trade I presented was very very short term, so nothing really that major but still worth mentioning.. Overall in the mid-term I still see a decline in the value of the EUR against the US dollar. This is active as of right now with a sell @ 1.42 and profit target @1.38-1.36.

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