Hey folks, how do you fare from the recent DXY range? Hope you guys are doing well.
Before we continue further, do remember to read the disclaimer.
We came out from all our positions at Break Even (BE) after Dollar rallied past the 95.50 zone. So what’s next?
Well it is simply telling us to still follow the trend and there is nothing wrong with it as the market is always right.
Thus let’s go straight to the US Dollar Index
After breaking up, it was met with resistance on friday. So the likelihood of it coming down is high. However since it has broken up with sheer force, we shall look for a long usd only trade. As such, we have identified 2 potential major pairs to trade.
USDCHF – one of the most expensive swaps around in the market
The idea here is to exploit the trade and come out asap before the swaps get too high and erase bulk of our trading profits. Thus we have decided to do a sell limit and take profit (80% of our position) at the nearest support (0.981). Should the support breaks, it is likely to go down a lot lower (0.9685 zone). Until then, this is our plan.
AUDUSD – Utter disappointment given that it ranged for almost 7 weeks and we thought some form of reversal was on the card but it took us out at Break Even (BE). Holy Molly… Nonetheless life still moves on and we are moving on as well to sell this to the critical multi year sticky zone (the infamous 0.717-0.72 zone). Since it has broken the support, a retest will give us a very low risk entry for a short to the sticky zone.
Last but not least, a cross pair for you guys to consider.
GBPCAD – It reversed on friday with a nice daily pinbar. While the overall trend is still down, we however see a possible reversal and will look to long it to the nearest resistance before changing to short if it is resisted again.
Good luck with your trades and always stay safe by putting your stop loss to break even to protect your capital.
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.