I’m opening this thread because i would like to understand a bit better, and see what you think on today’s EURUSD rally. From the one hand, the Michigan PMI didn’t meet the forecast and even suppressed it. From the other hand, the pending home sale surpassed the forecast, and at the end, the USD lowered and opened EURUSD rally. What i would like to understand is - how come that happened? Is the Michigan PMI index got stronger from the pending home sale index?
Tell me what you think…
[ul]
[li]Pull up a D1 chart
[/li][li]Drop a horizontal line @ 1.3665
[/li][li]Zoom out to about 10/2012- identify the importance of this price (major swing high 2/2013, relevant 10/11 2013, and bounces since).
[/li][li]Pull up an H1 chart
[/li][li]Apply a 20EMA- identify the ascending triangle pattern (bullish breakout pattern), and how price was carried to the breakout
[/li][/ul]
Here’s my chart- I was waiting to get short @ 1.37
Clearly, there are underlying reasons why price did what it did, but to keep it simple I used commonly-employed terminology above. A bullish breakout structure isn’t just lines on a chart- this pattern is a very specific representation of order-flow, which is a key reason why it is reliable and commonly utilized. I always try to sell into rallies and buy into sell-offs (also known as “fading” moves).
To be honest, i had my technical point of you regarding what is happening in the recent time. I’m working on short term analysis and an ascending triangle was formed during the end of last week. So a breakout, of some kind had to come. But, i wanted to understand the fundamental reason of this rally. It didn’t add up while it happened. At some point i had two positions opened (buy\ sell), which doesn’t make sense. I opened them just to see what happens…
Fundamentals alone don’t always have a clear-cut black-and-white relationship to any market.
The only reason why price moves is because of supply/demand and one over-whelming the other.
I use technical analysis solely to try and interpret the imbalance between the two.
The only fundamental data I pay attention to is NFP (primarily just to trade it), and I’ve yet to find a reason why to expand.
Price is boss in the spot market, it’s all you’ll need and all you’ll ever need.
well, I tend to agree with you. But, I’m a newbi ;), and as for now, I see both of them working together, at some point of the day, and only in some of the days, not always.
Anyhow, thanks for the inputs!!!
we stick only on charts and trade what we see, not the -probable*- interpretations of news releases/ speeches etc.
we just need to know the exact release time of possible hi-volatility events/news and that’s that; we don’t care what will be said/announced.
even if we get the news at the moment the institutions get them we can never be sure of how they will be interpreted in price action; it’ s got nothing to do with us (we are all informed and experienced and…and…) it is that even scientists of finance analyse such news to conclude in contradictory consequences on economies.[I]Assuming the majority of traders are not of such science related.[/I]
Also,
the biggest joke is to read various analysts’ articles after the news affect the price, struggling to apply causes in price movement based on fundamentals analysis so that the effect will appear to be rational…that’s the real laugh, yep.
:), well , you’re absolutely right about the approach but, from the other point, i don’t think we can ignore the fundamental results. This is correct the it’s all about the supply\demand, but also this is triggered sometimes by some kind of economic event that can trigger some volatility in a certain day…
Don’t you think?
In my opinion EUR/USD is rising on hopes that ECB is not going to start QE and Eurozone economy is recovering (e.g improved unemployment). If Mario Draghi doesn’t change his current policy, expect EUR to move even higher. Although, fundamentally, we do expect it to go down at some point.
