It’s 08:10am GMT. I just noticed my USD/CHF long position’s stop has been hit. So, that’s a loss of 206 pips right there.
The hourly chart of the Swissy pair as of now:
The US dollar advanced against the euro today at an average pace of about 5-10 pips per hour as US stocks extended losses, failing to get any benefit from the economic data on consumer spending and personal incomes.
Since the credit crisis started, MarketWatch reports, the US dollar has often gained support from weak stocks as investors shift out of riskier assets and into the US currency for its status as a relative safe haven. Falling risk appetite also tends to support the yen. This could explain the strength of both the US dollar and the yen today.
It looks like we are going to close the day in EUR/USD with a strong Bearish Engulfing pattern, which is a good development for my short position in this forex pair. This week is quite rich in economic data culminating, of course, with the NFP at 12:30pm GMT on Friday.
The EUR/USD forex pair ended the week at 1.2733 with a ‘hesitant’ daily candlestick. Friday’s European trading session was extremely boring, but then Mr. Bernanke opened his mouth at 14:00 GMT and rattled the markets, first down to 1.2676 then up to 1.2778, to close at 1.2733. What this means is that either what he said amounts to ‘not much’ at the end of the day, or forex speculators just ‘did their Friday morning roller coaster thing’. Whatever it is, I am holding my EUR/USD short as I think we are right now at the top of the second correction of the downtrend, which started at 1.3332.
Here’s the daily chart:
The Euro is trading above 1.2700 urrently (06:13 am GMT). The forex market got thinner after the release of two worse than expected US economic reports yesterday. Forex speculators may be looking forward to today’s keynote speech by Fed Chairman Ben Shalom Bernanke at the banker’s conference in Jackson Hole, Wyoming.
