US Equities Get Hammered To Start The Week – September 29th 2015 FX Commentary
If you go back and read the last week or two of forex commentaries you will see they have done exactly what we were looking for. The market came compressed to a peak and then broke out to the downside. As I mentioned in previous commentaries the retest of the breakout point will be the key. If we retest the breakout point and then continue down we are in for further downside which is exactly what we have seen. I’m going to painfully honest…even though I called it perfect I have actually lost money trading equities over the last week. It’s been a very frustrating last two weeks of trading for me personally. I have made a lot of stupid decisions and failed to execute my trade plan.
To me it has really reiterated the importance of having a plan before every single trade and then following that plan regardless of what happens. Another mistake I have made is over trading from low probability areas, another way to say that is I have been chasing the market. Having a plan before you enter every trade eliminates the risk of making some of the stupid decision I have made recently. I think it also illustrates that regardless of experience mistakes can still be made. Time to move on to tomorrow where I think the great possibilities in equities will continue yet again.
Euro Rallies Against Pound
Yesterday I talked about the EUR/GBP and the major resistance level that had been holding it back. This level was still holding prior to the EUR/USD short that setup during the NY Session. Unfortunately the EUR/GBP began to break though that daily resistance and thus the EUR/USD stopped me out for a -20 pip loss. For those of you who are members make sure to check out tonight’s video preview for a full breakdown of this forex trade setup and other analysis around the confirmation candle.
Today my directional bias remains open. Obviously the EUR/USD has shown some strength but the possibility of risk aversion could drag the EUR/USD down. For that reason keeping directional bias open is the best option in my opinion. We have some strong manipulation points today as well and any valid stop run of a pre-selected manipulation point will be a valid trade setup for me.
GBP/USD Remains Extremely Heavy
The Pound has closed below major daily support and is sitting right on the lows. Additionally the GBP/USD is sitting at the lows continuing to look heavy through the entire day and into the close. In this type of situation it is important to look for the backside of the breakout point. In a heavy market we will often see a breakout without any initial stop run. The safest way to catch a breakout and in fact the only way I will ever catch a breakout is if we see a stop run of the backside of the breakout point.
At this point I do not have any lower manipulation points from which I would look to go long. It is possible that a lower level forms but at this point I would need to see the market rally from the lows in order to use it as a stop run point. Because I only have upper manipulation points listed I’m essentially only looking for a trade setup short. The only way this would change is if the lower level forms as previously mentioned.
Forex News For September 29th 2015
US Consumer Confidence 10:00 AM Eastern: This month 97 is the expected number. Consumer Confidence is capable of spiking the market more than 15 pips and therefore I would not carry a trade into this economic release. Generally it takes a sizeable deviation to move the market as most small deviation are shaken off quickly with only a small blip in price.
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