Monthly Market Updates on Exotic Crosses (August 2012)

“If there is one vital lesson I’ve learned in my own trading career that has served me better than any others, it is to keep things as simple as possible in trading as this is really nothing more than a game of probabilities and mental fortitude… Now, while we are happy to look for those rewards in the market, we often let the excitement of making money overpower the reality of losing money… Just because you are a trader, it does not mean that you have to trade all the time.” – Sam Evans

Last month, the currency markets experienced great volatility and trend-based pressures. The instruments that went up did so without moderation, and so also were the instruments that went down. Speculating on seriously falling markets remains one of the most agreeable trading methods. Extremely falling markets would soon offer traders excellent opportunities to enter the markets long at very cheap prices. Even position traders would like to speculate on low prices and anticipate them to rise in value. When a trend goes down for a long-period of time, timing the accurate turning point for a bullish market is the knowledge that victorious traders ought to have. There are many ways to speculate on the markets that seem to have gone too far. 

In July, 2012, there were gaps that occurred at the beginning of the markets. A gap that opened lower in a downtrend showed that the bears were dying to get their hands filled. This could not have been interpreted in other way, except to mean mere southward pushes. The bulls’ aspiration was overwhelmed with bearish pressure, till the bears were satisfied. The markets were then forced to drop further. What was the outcome of this? The bears have subjugated the bulls. The bulls were really in a pitiful condition as the markets tended to go against them.

Below is the summary of some of my trading forecasts this month:

AUDUSD

Primary trend: Bullish

The AUDUSD rose by over 280 pips last month – something that could have been gained as returns provided profits were allowed to run. On the chart, we see a bullish Confirmation Pattern that is still early enough. The ADX line is trudging upwards (now at the level 27), while +DI is above -DI. The MACD signal line and histogram are now above the zero line. The bullish trend is still valid.

AUDJPY

Primary trend: Bullish

This cross did not trend that much in the month of July 2012, but the bias is still to the upside. The perpetual strength in the JPY could end anytime soon and the cross might garner enough stamina to assume a significant bullish stance. On the chart, we have a Convergence Pattern; which mean that the bears are getting tired in their desperate battle against the bulls. If their strength is exhausted, the cross might rise.

EURNZD

Primary trend: Bearish

Early last month, I said this cross was in a bearish mode. The cross fell by well over 500 pips in the month of July. The bias is still down. On the chart, we have a conspicuous Divergence Pattern, showing sellers’ supremacy. The fact remains that the EUR is weaker than the NZD. The next support level is 1.5100, and if it is successfully broken, the price might trend lower to 1.5000.

EURCAD

Primary trend: Bearish

This cross also nosedived by far more than 500 pips in the month of July 2012. The present Divergence Pattern on the chart stands for a confirmation of the present southbound bias. Both the signal line and the histogram of the MACD are clearly below the zero line, while the ADX line is far above the level 40. This shows potent bearish pressure. The price may be corrected up a little before it moves down further.

AUDNZD

Primary trend: Bullish

This exotic instrument had a significant rally last month, but it is currently having a serious correction. It was corrected lower by more than 100 pips as the price in the month of July 2012 ended at a low of 1.2928. This potentially gives us a great opportunity to buy cheaper in the context of an uptrend. However, there are obstacles to overcome in the distribution zones at1.3000 and 1.3050.

Monthly Market Updates on Exotic Crosses (August 2012)
Monthly Market Updates on Exotic Crosses (August 2012)

GBPCHF

Primary trend: Bullish

This market is currently around 200-pip bearish correction after it moved up by 500 pips last month. The ADX line went up above the level at 40 – hence the present bearish correction. I still maintain a bullish scenario on this market, assuming that the current price action would afford me the opportunity to buy cheaper. There are demand zones at the levels 1.52000and 1.5015.

Conclusion: Next week, you would have the privilege to see some trading signals that were taken with the kind of analyses used here. Being a market speculator, you show know your level, be faithful to your trading rules, and be brave about the trading convictions you have. If you do what you need to do to be a permanently triumphant trader – some may not like you, but your success in trading might endear you to many who crave trading success. Sure, you can try to be just like every other trader moving downwards rather than upwards. But that’s so boring! Being a permanently successful trader makes you stand out in a good way. It doesn’t make you weird. It makes you likable.

It’s part of the FXEmpire.com’s mission to make you thrive as a trader – to metamorphous into a market wizard, and flourish as a market speculator.

The article is concluded with the quotes below:

“However, it is true that trading is difficult. Of the many who try, few realize lasting success…. While the risks and sacrifices can be many, you don’t have to give up your whole life to become a trader. Initially you might not be able to spend as much time with your family as you would like, but that is a choice you make, not one that is put upon you. You might have to work extra jobs to build up capital needed for trading or to pay for trading expenses… I don’t believe it’s necessary to focus exclusively on trading. You want and need to have a life.” – Joe Ross

 “The KISS approach’ –‘keep it simple & stupid’ and is more important than ever for today’s trading world. With thousands of systems, indicators, markets and brokers, it is easy to fall into the trap of information overload. Media also brings most moves into the limelight in which the contrarian should mostly tend to look the other way. Any market can only move in the directions; up or down (and of course sideways). With this in mind, primarily you can flick a coin and the outcome of up or down will have a 50.50 chance. Why make the process more difficult by suffocating these probabilities with a hundred indicators or a thousand possible news outcomes?  “Simplicity” is key” – James King

 

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