January 19, 2012 Forex Signals

We’ve been having a great week this week. It is unfortunate that our trade on the GBP/USD got stopped out early, but our current open trades are up almost 500 pips combined.

The Euro Dollar has reached it highest level in two weeks after Spain raised more than its maximum target at a long-term debt sale overnight. Moving from earlier levels around 1.2860 the Euro rallied decisively above 1.2900, also helped along by another bond auction in France, where the recently downgraded country successfully raised almost 9.5 billion euros. Across the pond, the US Dollar weakened against the majority of its major trading partners as risk sentiment improved following the two bond auctions in Europe, as well a drop in unemployment claims in the worlds largest economy. Rallying above 1.2950 the Euro sits this morning at fresh two-week highs of 1.2960 and the Greenback, despite a fall in the Dollar Index, has managed to gain ground against the Japanese Yen where it trades at 77.15.

Now, on to our open positions and new trades. Lets take a look at the specifics:

Open Orders

New Orders

All Pending type orders are only good for the day. Set the pending order to expire within 24 hours.

Use the Lot Size Calculator to determine lot size. In general, never risk more than 2-3% on a single trade, but that also depends on your own personal trading strategy and risk management.

EURUSD:  Another strong move up increasing our gains significantly. The price has moved into a potential danger zone as we may see consolidation or profit taking soon. In addition, it has moved above secondary resistance. This may mean it has new support and even if it consolidates it may not move down significantly. We are moving our stop loss to lock in our current gains while still allowing for a little pullback. If it drops to our stop loss and below, it may see a fall back into its original trading range. We don’t want to lose out on all these gains. No new trade today.

GBPUSD:  The pair moved up again right into secondary resistance range. We see short term indications of a potential pullback, but there is still potential strength in an upward move. We are holding off on any new trades for today until we get a more reliable trading option.

USDJPY:  There was a strong push up yesterday, but it fell almost half the way by closing. While we see short term indications of a continued move up, the price is approaching a new potential resistance level and we may see it bounce back down again. We are holding off on trading this pair for now.

USDCAD:  A nice hammer pattern was formed yesterday near primary support. We have short term indications of a potential bounce back up. There seems to be only a little more than a 1:1 reward/risk ratio, but given the current market conditions we feel this may have good potential to grab some pips on an upswing. If the price breaks over the hammer, we should see it move up enough to get some decent gains. We are not going to risk more than 1-2% of our account balance on this trade however, and we are going to add in a tight 30 pip trailing stop as well.

AUDUSD:  Still following a slow wide upward channel, the price continue to move up. However, yesterday formed a dragonfly doji pattern, which could indicate a slowing of the upward move, or a potential reversal. We are holding off for now to see where the price moves from here.

USDCHF:  We are well into the profit zone on this pair. Still holding a short position Our indications still show a move down so we should continue to see gains increase. But we are right near primary support so could see a bounce back up. We are going to move our stop loss, plus add in a 50 pip trailing stop. We would not open a new position on this pair today.

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