Asian, European & US Sessions

Market Reversal . . .

Written by JS T. Alexander | 17 March 2010

Or a corrective Mode 2

The technical divergences on the majors held true to its outlook as the fundamental reports on the UK jobless claims falls since 1997 that led the GBP/USD to rally prompting a recovery back to the 1.5380 high from the 1.4975, 1.4870 and 1.4780 during the start of March.

And the mix reports on the USD justified it had lost its momentum as a result moving lower for the week towards its end of the 1st quarter of the year. It is just logical to see that the GBP/USD as the lead currency would benefit more since it has been battered down the most as compared with the EUR/USD and the cross rate had been used to manage the risk aversion between the pair. this also led the EUR/GBP to move back to where it has to fill in its previous gap as it is working at the 0.8952 low for the week as of this writing. It has been anticipated based on our market view report dated the 15Th of March during the Asian opening sessions. As long as there would be no significant economic changes for now ; the USD lower to move back lower on a gradual pace making some up swings will be the theme for the rest of the week and eventually towards the end of the closing month and quarter ending.

Meanwhile, the Aussie and the Kiwi had gradually been a more postitive choice for a continuation as some analyst have predicted a probable parity attempt between the Australian dollar versus the US Dollar. However, the New Zealand Dollar has been seen at pace with the AUD/USD as the rate hikes and the GDP increase has been the main resaon for the steadier economy in the Asian region. The best performing asset currency for the past few months as some carry trades has been seen to improve and held after the much anticipated rate hike by the RBA.

The USD/JPY and the USD/CHF are in the same case scenario has both currencies have been more predictable even whenever they have two opposite directional movements. As a whole, the long term outlook for the USD/JPY is till towards the higher levels of 92.00 and 1.0670 respectively within the latter part of the 2nd quarter. But the probability of seeing a low for the USD/CHF around the range of 1.0380 - 1.0440 from these current levels should not be discounted as the downward extensions are wide open in the mid-term outlook. If and when this so happens the probability to move back up is greater only after making the new lows for the week ending March.

An earlier move contrary to the present downturn may only occur depending on the interest and the build up of fresh positions by Asian and European traders when they sense that interest rates may head higher within the designated period anticipated.

Some may disagree on this analysis and there is nothing certain of course. However, we have been correct so far from our over all target objectives. Although, the steadier growth to these levels will be seen in the near term. As one of the key indicator is to know more the USDX behavioral movements in correlation with the foreign currencies as how the proper distribution of basis and percentage weight with one another in terms of price changes.

Speculating and having to plan out a trading strategy for this long may well be not suitable for some traders and investors. A waiting game for others may not be to their liking. but as a reminder that there will always be trading opportunities in between.

However, as Megatrade101 only tries its best to anticipate and plan worthwhile trades that may result in a substantial gain from a major trend. As we have done from December 22 to the current time period when we have been modest enough to have called the USD trend from it pivotal point.

There are three months in a quarter. Within these period there will always be a few distinct opportunities to make some serious investments. And these past few months were one of those times to watch for. By now our viewers could already judge that our strategies are based on hedging, spread trading between major pairs and cross rates. But more importantly, net positioning and percentage trading the foreign exchange market is one of the better trading techniques that has led us to outlive some major market conditions for so many years in a volatile market. There are still no guarantees that the same results will happen.

So pls. choose wisely!