US Dollar slipped into new lows for the year against many currencies. Euro, Australian Dollar, Swissy and Kiwi all made new annual highs. Markets are not very volatile, most movement seems to done in this persistent, relatively steady pace which is great for long term trend followers. Slightly harder for active traders, like me, to play it, though. Thankfully, shorter time frames, as well as unrelated currency crosses, provide many other trading opportunities.

USD is getting in trouble on the eve of G-20 meeting in Pittsburgh, where it is expected to be high on the agenda. Well, perhaps not the exchange rate of our Dollar, after all people attending this conference are Forex junkies (we hope), but rather  the debt which is denominated in USD. President Obama is expected to face tough questions about our skyrocketing Federal debt, and ways to curb it. His answer? In an interview with CNN, he outlined his “plan” on how countries should manage their deficits. This includes forcing citizens of countries like US to save, while “getting” people in China and Germany to spend more. I’m not good at reading between the line, but isn’t it blaming our debts on other countries, not any “plan”? Perhaps we should start by shrinking our own burden, before developing “plans” for others. With FED meeting tomorrow, next few days should be interesting for USD.

First update needs to be made trades featured in Price action Forex trading. As mentioned before, new category “Price action trade” was created, which will track updates for those trades. New Zealand Dollar made another sharp move last night, that pushed EUR-NZD to new lows. This creates a need for an update to my entry order. It must be moved lower, to just above new latest high.

New buy order is placed 2,0850, adjusted from 2.0932. As a reminder, I’m using 4H chart, so we can expect to be tracking this trade for a long time. recent highs/lows will dictate how long this position will be opened, when it finally gets under way.  There is no change for GBP-JPY order at this time.
Speaking of the Pound, it has finally shown some strength today. Hard to say if it is growing spine or only bouncing, but doesn’t look bad for shorter term trades.

Combined with weakness in Canadian Dollar, GBP-CAD is building a possible short term, common reversal pattern. Price in this short term, hourly chart, is running into considerable resistance around 1.7550. Given relatively wide spread for this cross, my buy order is set at 1.7575. A word about spread. It has narrowed down considerably and during most active hour can be as low as 6-7 pips. Big change from only a year ago when 15, maybe 20 pips was the norm. It will jump to about 10-12 pips during less liquid times, so one must take it into consideration when placing orders. Objective is 150 pips for now. I might change it to higher, if trade develops as expected.

Mike K.