Thursday, March 22, 2012
During today's webinar, we discussed how investors have shifted away from being influenced by the European Debt story for the immediate term, and have now been concerned about a possible slowdown in global economic growth. There is concern over the rate of change in China's GDP forecasts and how this slowdown in China will effect global growth, and in particular the US recovery. Despite the news & fears surrounding economic slowdown, we are still seeing US equities fairly hold up and extend its rally higher, which is contrary to other global equity markets. This has led some analyst to believe that the good macro-data from the US economy has kept US equities insulated from any risk coming out of Europe and China. In the currency market, we've seen a brief change in the USD risk-off to risk-on correlation and there have been times when good US data has caused the greenback to rally.
EUR/USD slumped after seeing disappointing manufacturing PMI numbers from the Eurozone, which caused investors to scurry towards USD safety.
Tuesday, March 20, 2012
We begin today's webinar with a brief explanation of the current price action for the EUR/USD pair and why it is important to understand the characteristics of a true trend in the market. Most trends and price movements are characterized by impulsive & corrective waves in price (extenstions & pull-backs) and without this understanding of price movement, you will have difficulty placing successful trades in any market.
We also discuss why it is important for short-term traders or scalpers to understand the overall market picture when trading the shorter time frame. You should not only be able to comprehend the long-term market bias within your trading instrument. But, there are also trendlines, moving averages, and areas of support & resistance that can only be identified on your larger time frame. Without a higher time frame analysis, you will never be able to determine which part of the market cycle the asset is currently trading in.