Friday, January 13, 2012
We started this webinar by providing a brief fundamental overview of market activity for the past two days. Yesterday's trading day was largely positive as the euro gained across multiple crosses due to successful auctions in the shorter term Italian & Spanish bond market. We saw the yields or borrowing costs drop substantially and this led to an improvement in investor sentiment and a risk appetite rally for US equities and currencies.
During today's European Trading Session, we had another Italian bond auction for the longer-dated paper (10yr & 30yr bonds), and after the completion of this bond auction, we saw the EUR/USD fall lower. This was due to investors feeling concerned that the Italian 10 yr- auction didn't match the success of the longer dated Spanish 10yr bond auction. The pair had encountered resistance at 1.2869, which is the 50% fibbonacci retracement level of the recent move down and the R1 level from the daily pivot point calculation.
Prior to the New York Opening Bell, we saw more downside risk in the market as the S&P announced that the credit rating of 15 Eurozone nations would be downgraded.This announcement caused the Euro to weaken across multiple currency pairs and the EUR/USD broke to a new 2012 low.
Tuesday, January 10, 2012
We started today's webinar by discussing the reasons behind the short covering rally in the EUR/USD pair. Since the Euro had been too far extended to the downside and there was an overwhelming number of speculators positioned short for this instrument, this market correction was expected to happen due to technical analysis & simple price behavior. As traders began to cover their shorts & take profit, this drove the market price higher. Some analyst believe that this market correction is necessary ahead of the next trend extension down to the 1.20 level.
In this webinar, we discuss the role of the fibonacci retracement tool and how these levels of support & resistance can be used to identify potential areas of reversal and continuations in a trend. Drawing in your fibonacci retracement can also give you an idea of how much farther price can retrace before you see signs of bullish-bearish continuation or bullish-bearish reversal.
Towards the end of this video, we entered a few live trades in the EUR/USD pair.