Hope you guys have had a great trading week.
Before we continue further, do remember to read the disclaimer.
It has been a volatile week last week with US dollar tanking before reversing on Friday. Nonetheless we are still seeing a bearish structure setup for DXY (Lower Low and Lower High).
From our last post, we can see the current set up still valid unless US Dollar Index breaks up strongly. Looking at the chart below, we saw and caught a similar set up on bullish US dollar previously from Feb 2018 to April 2018 when most traders are bearish on DXY. For the current set up to remain valid, it has to fulfill 2 conditions, LL LH structure (Lower Low and Lower High) and breaks 93.45 strongly. If 93.45 isn’t broken, it only means that the current set up is purely a retracement for USD to further strengthen.
Having said so, we do see similar setup for both EURUSD and NZDUSD.
EURUSD, as per mentioned in the previous post, is one of the most commonly traded fx pair. We are currently seeing EU (in short) showing a HH HL (Higher High and Higher Low) structure. So long as the low isn’t taken out, we can see EU move higher. Should it break 1.15, it is likely to open door for more downside to 1.135. Vice versa is true. Should it break 1.18, it can open door for more upside to 1.19. So until then, we can trade the range and be vigilant. InvestWhizz currently has 2 holding positions for EU and will continue to hold unless the trade setup is invalid.
NZDUSD, can be seen as a major or minor pair. Whatever it is, we can also see a similar setup of a HL (Higher Low) structure, camping for more up move should the neckline breaks. With a position in hand now, we are looking at possible TP at 0.69 and 0.696. Any higher is a bonus.
As you guys can see from these posts, we do not enter and exit our positions randomly unless the setup is invalid. Using weekly and daily charts to trade, it can eliminate any noise along the way. Using proper risk management with appropriate lot sizing, we can survive the market slaughter longer and better.
RISKS ASSOCIATED WITH FOREX TRADING
Trading foreign currencies can be a challenging and potentially profitable opportunity for investors. However, before deciding to participate in the Forex market, you should carefully consider your investment objectives, level of experience, and risk appetite. Most importantly, do not invest money you cannot afford to lose.
There is considerable exposure to risk in any foreign exchange transaction. Any transaction involving currencies involves risks including, but not limited to, the potential for changing political and/or economic conditions that may substantially affect the price or liquidity of a currency. Investments in foreign exchange speculation may also be susceptible to sharp rises and falls as the relevant market values fluctuate. The leveraged nature of Forex trading means that any market movement will have an equally proportional effect on your deposited funds. This may work against you as well as for you. Not only may investors get back less than they invested, but in the case of higher risk strategies, investors may lose the entirety of their investment. It is for this reason that when speculating in such markets it is advisable to use only risk capital.
Risk Disclaimer for Forex Trading
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.