I started delving into spot FX trading a couple of months ago through a friend. Admittedly, learning the ropes can be quite challenging. Being a small player in a very very big pond, I limit my positions to intra-day trading with an hour or two timeframe. My favorite pair: EUR/USD. The volatility in these currencies opens a lot of opportunities for gaining big. Or losing big. Exciting!
In December 2010 and the early part of January, the pair was seen ranging along the 1.3000-1.3300 lines with no clear trend. However, in a turn of events, the EUR has become very bullish ending last week’s run above 1.3600, with a 150-pip gain on Friday (and 250 pips for the whole week).
With the fluctuating momentum of both currencies, the significant effects of the QE2 in speeding the US recovery has yet to be ascertained, and the problems faced by the debt-ridden members of the EU has not been completely eased in investors fears. The big questions right now involve the euro’s capacity to sustain its bullish run and/or if it will soon face a pullback to lower levels. James Chen, chief technical analyst for FX Solutions forecasts a retracement level up around 1.3800 before turning to the downside.
I guess we will have to wait and see.
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