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Market Updates Two days of USD strength, close out FX Traders week**
Market Updates Two days of USD strength, close out FX Traders week**
| Two days of USD strength, close out FX Traders week** |
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This is the second day of USD strength and it looks like it may continue for a few more days. There were a few key points broken  Overnight that I pointed out yesterday. Let’s take a really good look at the majors on a few different time frames. EUR/USD: Breaks lower, consolidation still the game GBP/USD: Short positions gain a little ground USD/JPY: I would love a rise before the fall, still short the pair USD/CHF: Breaks higher, but hits resistance EUR/USD It’s clear that the pair has a bit more Consolidation to do. In the chart below, I have drawn a Bollinger Band and calculated the average weekly spread on the pair since the inception of the Euro. That average spread is 1689 points. Currently the spread is 2500 [points form the top line at 1.4444 to the low line at 1.1944. The Bollinger band can and does contract as price moves in one particular direction, as shown by some action through March and early april of 2007. ** Looing at the potential bars in green below, we could see price move towrd the bottom thin black line with out creating a widening of the BB on the weekly chart. I believe this is infact going to happen and dumped my long position this morning for a a small profit on the trade and some interest. I have a small target from 04/07/09 that wasn’t filled yet and will look for another entry on the hourly charts to get long again. **  GBP/USD The GBPUSD never recovered as much of the late 08 fall as the rest of the European currencies did. This may well be the reason for the gains on the GBP as of late. Even through all this I am still short the pair. My major concern now is that the rising trend line on the dailies is above my target for the short.**  The chart below illustrates my concern. Not only does the pair have to get past the red ascending trend line. It will have to punch through the 38.2% fibo line to reach my target. That fibo is from the low on 03/11/09 to the high of 04/16/09. If I didn’t know te figures on black candle completion I would dump the trade and wait for another entry. However I am making progress on the pair and will continue to hold the trade. **  USD/JPY This is the same chart I have been looking at for several days now. I am still short the pair and am looking for the pair to fall to at least 97.21, if not the bottom red line., currently around 96.82. I only see one troublesome development on the charts, and that is the three days of higher lows with todays low at 98.72. **  I fully expect, would even love to see price retrace against the top red line below. Why, this often happens before a strong push to the lead in line. This would give me the opportunity to enter another position at a higher level for a stronger (higher) averaged entry on the trade. The days that it would take to get up to that line and back down would also bring the lead in line and my target closer together, eliminating my desire to hold the position just a little bit longer. With both target areas so close the temptation is gone. **  USD/CHF Here I have shown two charts on the pair to illustrate the point that though the pair has broken out it is at another point where it may find some considerable Resistance before moving on. In the first chart you can definitely see the breakout of the bump and run set up that I had drawn previously to illustrate a possible break out. In the email dated two days ago I drew these exact lines. I now expect the pair to rise to the top red line. ** My only concern at this point though is the same chart with the lines drawn in red below. This line, though broken in late afternoon trade, is acting as some pretty good resistance to any further top side gains. The two charts aren’t as combative as they appear to be. If price settles against the shorter line from the chart above, as happens quite often on a break, then they could both be accurate and a top side break will come next week as the USD takes to new highs against most currency pairs. ** 
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