Today is Labor Day all across Europe including Russia and even in China and across South America, in all of which it is celebrated as a national holiday. The salient exception are traditionally protestant countries like the United States, Australia, Canada, etc. where Labor Day is recognized at different times of the year. As it’s scheduled in mid-spring it’s a great day to head out and enjoy the sunny weather.
And strangely enough I cannot remember a 1st of May when the weather wasn’t picture perfect, including today despite the fact that weather reports were showing a rainy day earlier this week. So you can guess what I’ll be doing right after finishing this post.
So today we’re going to look at what’s happening on the forex side, and more specifically with the U.S. Dollar, let’s do a quick update on our open campaigns.
What a difference a session can make. Three days of slow progress wiped out in just a few hours and it looks like there may be more to come. I am sure you have noticed that this keeps on happening – sudden wipe outs out of the blue and it’s quite possible that we are looking at continued distribution here.
And why am I saying that? Well, for one these sudden drops after slow drives higher are becoming a pattern. Plus the signature on the Zero panel shows us a large spike higher at the open after which everyone seems to have left and taken the day off.
That is not normal and if nothing else it is not what ought to be happening at this very stage. For the nth time now – the onus is on the bulls to drive the tape > the 100-day SMA but they seem either unwilling or incapable of doing so.
The ZB campaign continues to look positive and I am now advancing my stop to break/even after 1R MFE had been reached yesterday.
Okay, so let’s talk money, folks. The ongoing Dollar campaign may turn out to be one of the most profitable entries of this year. It’s already racked up 8R in ill-gotten gains and I’m now trailing near the 7R mark.
It’s well remembering that short squeezes in the forex markets can and will extend way beyond anyone’s imagination. Just two weeks ago everyone hated the Dollar and now it seems like there isn’t enough of it to cover all open short positions.
The USD/JPY is rising steadily and has now arrived at it’s 100-week SMA which will be its first major hurdle. I think we may already have already completed an obligatory retest on the daily panel, which would speak to the vehemence of this short squeeze.
Cable is doing a Wile E. Coyote and although there is a theoretical support line on the weekly panel I wouldn’t bet any money on it being observed unless price action is showing signs of a bounce. Unless that happens a drop to 1.32 is a possibility.
More forex perspectives as well as an update on precious metals below the fold. Which means now would be a great time to join the team as a full member:
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