Currency Currents

Currency Currents

Wed, Apr 2 2008, 13:14 GMT
by Jack Crooks

Black Swan Capital


John Ross wrote about the nasty head fake made by the euro on Monday.  Mr. Market loves that game—and so do the forex dealers.  Clean out those stop-loss orders above the market, then away we go.  Ahh…big advantages there are to seeing all the cards face up, as our illustrious (no commission of course) FX houses do.  Who needs commission when you got “spread” and a look at the hands on the table! Thus it’s just one of the many dangers one encounters trying to play this game on an intraday basis.  And why we continue to try and stretch out our time frames if possible.

And as we stretch out the time frame of our dollar view, we are increasingly warming to the idea that an intermediate-term bottom, at least, may be in place for the dollar, as CRAZY as that may sound too many. And if that is the case, the dollar could bounce, or maybe move enough to call it a rally, higher than now expected.  (Disclaimer needed here:  We warmed in this manner a couple of months ago and got whacked.)

Based on a wave view of the US$ Index below (and not trying to get to cute), a bounce to 7500-7800 could be just a correction in the longer term downtrend.  Of course we never know when what we perceive as a correction will morph into a full-blown major trend change without hindsight—a gift we continue to search for. 

 Dollar

Of course if this proves wrong, the next extension low for the dollar index is near 6800.  But if this proves right, a US$ index move to 7800 (or +7.8% from current levels) equates to a euro-$ of around 14400.  Now that would be quite a head fake indeed! 

Published on  Wed, Apr 2 2008, 13:16 GMT

Archive

Black Swan Capital LLC  | 2161 SW Racquet Club Drive Palm City, Florida 34990
http://www.blackswantrading.com | jcrooks@blackswantrading.com

Legal disclaimer and risk disclosure

Currency Currents is strictly an informational publication and does not provide individual, customized investment advice. The money you allocate to options should be strictly the money you can afford to risk. While every effort is made to evaluate the actual experience of subscribers, all performance figures must be considered hypothetical, and past results are no guarantee of future performance. Detailed disclaimer can be found at http://www.blackswantrading.com/disclaimer.html

Interested in forex trading? forex brokerage firms!


GFT
Contact the broker/FDM
Open a demo account
FOREX.com
Contact the broker/FDM
Open a demo account
Alpari (UK) Limited
Contact the broker/FDM
Open a demo account		GFS Forex & Futures
Contact the broker/FDM
Open a demo account		Deutsche Bank
Contact the broker/FDM
Open a demo account

FXstreet.com will give you a 3 months membership as soon as minimum rebates have been generated (€150 for private trader/ €300 for corporate trader)

[Read Premium full description]


Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer.

Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management.

Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. 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.

©2008 "FXstreet.com. The Forex Market" All Rights Reserved.