Is Recession Imminent Or Is All Ok? July 24th 2015 Fx Commentary
I don’t have a great deal to rant about today other than an article I read with a very interesting chart attached to it. The past is often a great indicator of what will occur in the future. We have all heard that those who fail to learn from history are bound to repeat history’s mistakes and this almost always holds true. Check out this article entitled US Recession Imminent – World Trade Slumps By Most Since Financial Crisis.
One of the greatest parts about being a trader is that when the world is doing well or collapsing, it is of no real consequence to you. Cycles will come and go and if you want to strip off the fear that the economy puts on most in the world you cannot be a slave to the system. When I was first learning to trade people in my family always expressed how risky and uncertain trading is. To me spending the best years of my life slaving for someone else is by far the biggest risk. To me no risk is as great as looking back at your life and realizing you wasted your best years. If your goal is to learn to trade forex then dedicated yourself to it and make it happen! A year, 2 years, 3 years goes by in no time. Where are you going to be when that time comes. One thing that is certain is if you take no action you will be in the same location. You are never guaranteed of success, but I can guarantee you will not succeed by taking zero action. Take action and make what you want happen. On to the market!
Euro Continues Push To The Upside
During our live trading room today the Euro did provide a nice stop run reversal to go long off of the backside of the breakout point to the upside. This trade produced a beautiful confirmation candle but never made enough of a pullback for us to enter with the proper reward to risk ratio. Our trading centers around our ability to enter with at least a 2 to 1 reward to risk ratio for any day trade setup. Therefore a great entry can be invalidated if no pullback towards the initial stop run is ever given. Unfortunately that was the case today during the New York session.
Today the Euro contained the push up, making a possible second push up. With that being said I’m not going to limit myself on direction today by only looking for the third push up. The reason why I’m not going to limit myself on direction today is due to the fact that half of the push up came on Wednesday and then the second half came today to form a possible second push. I prefer to see one push during one day, not spread over 2 days. Therefore I would rather remain open on direction and like always let the manipulation from a high probability point answer the question as to market direction.
GBP/USD Finally Breaks 7 Day Trading Range
The Pound has finally made a clear break down out of the 7 day range bound market. Today I will be looking for the second push to the downside. When you get this type of push that is much larger than the moves around it you can see a larger retrace before the second push begins. Its not a certainty, but as long as we don’t pullback past the 61.8% retrace of the move down then we will likely see more downside. Its not that the fib is some magic number, it simply provides a good point of reference to determine whether or not a cycle is still holding.
Forex News For July 24th 2015
EUR German Flash Manufacturing PMI M/M 3:30 AM Eastern: Out of the last 6 months it only spike the market more than 15 pips one time so keep that in mind if your in a trade when this is coming out. It is expected at 51.9 which is the same as last month. This also comes out with services PMI at the same time and with a big enough deviation on both news events is can produce a nice move. In general for the Euro to see much movement you will need to see a full 1 point deviation from the expected number. For the move not to be muted Services PMI will need to agree with the deviation either positive or negative.
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