I wrote in my last piece on 16th May that despite the long-term bearish trend and the price still not far off that long-term low, we were seeing an important bullish sign – a first higher low at $1.2226.
I thought the best approach would be to stand aside and wait for the price to get established below $1.2226 (bearish sign) or above $1.2277 (bullish sign). It seemed quite possible that the price would basically hold within this range until the end of today’s London session.
This was a good call, as waiting for the breakout above $1.2277 at the end of the day would have produced profit over the next day, and close to 300 pips of profit if that long trade was held open until now.
We have seen a quite strong reversal in the US Dollar over the past week or so, after the greenback rose firmly for several consecutive weeks and reached new 1 year+ highs. The move against the Dollar is universal and is benefiting almost every other currency, and the British Pound is no exception. Of course, this may just be a retracement in the long-term bullish trend in the US Dollar, which could reassert itself.
My feeling is that the Dollar decline will continue at least until the FOMC Meeting Minutes are released on Wednesday. It is hard to see what other news could change sentiment before then, there is nothing of high importance scheduled before then.
I will be happy to take a long trade today from a bullish bounce at $1.2500.
I thought the best approach would be to stand aside and wait for the price to get established below $1.2226 (bearish sign) or above $1.2277 (bullish sign). It seemed quite possible that the price would basically hold within this range until the end of today’s London session.
This was a good call, as waiting for the breakout above $1.2277 at the end of the day would have produced profit over the next day, and close to 300 pips of profit if that long trade was held open until now.
We have seen a quite strong reversal in the US Dollar over the past week or so, after the greenback rose firmly for several consecutive weeks and reached new 1 year+ highs. The move against the Dollar is universal and is benefiting almost every other currency, and the British Pound is no exception. Of course, this may just be a retracement in the long-term bullish trend in the US Dollar, which could reassert itself.
My feeling is that the Dollar decline will continue at least until the FOMC Meeting Minutes are released on Wednesday. It is hard to see what other news could change sentiment before then, there is nothing of high importance scheduled before then.
I will be happy to take a long trade today from a bullish bounce at $1.2500.