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Silver Setting Multi-Year Lows On USD Strength – FX Analysis November 23rd 2015

I was driving to go get my daily Starbucks (I use to hate Starbucks snobs until I became one) and I noticed $1.59 a gallon gas. The USD has been on an absolute terror and at this point doesn’t show much sign of weakening. That US Dollar strength has continued to keep pressure in the heavy metals as well. At this point Silver is sitting at $13.94 and still looking heavy short term. Because it is breaking the largest support level we have we need a convincing daily close below before I would get too excited as it could result in a stop run of the lows. This US Dollar strength also trickles over into tonight’s FX analysis as the EUR/USD and GBP/USD looking to have given a first push to the downside on Friday.

One more side note before we get to today’s Euro and Pound analysis. At this point I believe the CAD could be in for another round of weakening. The COT data showed a very large move in the Asset class which is generally very slow moving. This move was toward further CAD selling. Additionally, the USD strength means further pressure on oil and lower oil prices will continue to cause a weak Canadian Dollar. With a strong Dollar and a weak Canadian Dollar, there is a strong case to be made for going long USD/CAD. Obviously this trade is rather extended but has no reason to turn as of yet from a longer term perspective.

EUR/USD Could Test Yearly Lows Soon

I will be looking only for the second push to the downside today in the EUR/USD. Based on our market cycle criteria, Friday gave a first push down and therefore that limits us to only looking for the second push to the downside today. The Euro is now fast approaching the overall lows on the year and showing no reason to not break through them. Fundamentally the Eurozone is an absolute socialist mess and with their, “lets let everyone in” policy it show be no time before further collapse commences.

EUR/USD Chart - November 23rd 2015

Daily Trendline Down Rejects Pound

Like the with the Euro, I will be looking for the second push down in the GBP/USD I do think the Euro is in a much weaker position fundamentally but from a purely chart based standpoint, I would rather take the second push down on the Pound considering its deeper retracement last week. Especially if I was a long term forex trader, the reward to risk ratio is much higher on the GBP/USD. With that being said my preference is the last thing that the market cares about and I will therefore take whatever pairs provides the valid stop run from our pre-selected manipulation points.

GBP/USD Chart - November 23rd 2015

Forex News For November 23rd 2015

German Manufacturing PMI m/m 3:30 AM Eastern: This has picked up some steam over the last 6 months and we have had 2 releases which spike the market around 15 pips. It is important to note that both spikes were quickly retraced at the price moved through pre-release. This would be a great piece of news to get in the market with. For example, lets say you had a stop run short prior to the news. Obviously we would not carry a trade short into the news but we could enter the short if the news was better than expected. Let the market spike up, wait for spreads to normalize, and then the short could be entered on the previous trade setup. Obviously you would need to still be within the valid candle count of the confirmation entry but this goes without saying. 52 is the expected number this month.


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