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The financial markets continue to reflect the increasing uncertainties related to the Sovereign Debt Crisis in Europe and its ripple effects on the rest of the world. With the precarious nature of the fragile period of stability currently holding the markets together, a brief analysis that captures a worst case scenario and its effect on the currency market would be of tremendous interest to Forex traders. Many of the major currency pairs that were affected by the safe-haven flows during the 2008 Financial Crisis are now moving within similar Consolidation patterns that preceded the sharp breakouts 4 years ago. However, given the much larger size of these patterns today, a major market event that disrupts the fragile period of stability could lead to even stronger breakouts over a longer time period. This analysis will therefore take a look at the potential short-term and long-term effects on the EURO USD, AUD USD & GBP USD of such an event, using the theories behind Consolidation breakouts as the basis for the price forecasts. 2008 FINANCIAL CRISIS In 2008, safe-haven flows that sought the preservation of capital through the US Dollar and the Japanese Yen led to large and …
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SpecialFX avatar

Ah, 2008...what a beautiful year for trading it was, best year ever! :) I sure hope your 2012/13 projections come true!

pawansansanwal avatar

That's amazing article explaining every possible way to happen in future

captain avatar
captain 27 Sep.

Well researched article

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Overview:The past few weeks have seen a total and utter capitulation across the financial markets, the recent elections from France and Greece has lead to the "risk-off" environment that is evidentially being seen. The USD and JPY have been well bid over the past few weeks as investors seek safe haven's where their money will be relatively safe.For example US 10 Yr Government Bonds have risen in price dramatically, and a cause of this has seen the yield fall from well over 2% to 1.72% (at time of composition). Alongside this the VIX - The measure of volatility and predicted Rate of Change of the S&P500 on an annualized basis has risen dramatically.Overall the past few weeks have been very interesting and have provided much opportunity to trade effectively across the asset classes. EUR:Seen worldwide as one of the most liquid, highest volume securities, the EUR has come under tremendous pressure against the USD and JPY. The fall started with a "gap" down after Hollande was elected as president of France sparking fears of political discord between Merkel and Hollande. This fall was exacerbated by increasing fears from Greece.On a technical basis, It seems that a short cover rally is …
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AdrianWS avatar
AdrianWS 18 May

For any Technical traders out there - EURJPY is forming a huge Inverse Weekly H&S formation, Potential target of 1.25 on break of 1.10 - This isn't necessarily a bullish EUR idea just Bearish JPY trade - JPY is way overvalued and Japan are hurting bad and want to do something about it - Most people look at USDJPY but export volume is greater to Eurozone and that may be what BoJ is looking at. Trade well.

RobertBric avatar

The problem with EUR is that everyone expects it to drop based on fundamentals. As not everyone can be short EURUSD, the pair will soon “surprise” everyone (but not the commercial traders) and will go up. The crowd is always wrong at reversals when commercial traders benefit as they have been setting up the trap all along. Of course, only time will tell who is right. It is always a 50:50 proposition (up/down) and 100% correct in hindsight :-) All the very best with your EURUSD trading.

alifari avatar
alifari 19 May

nice overview of multiple markets

AdrianWS avatar
AdrianWS 19 May

Thanks - Robert, I agree entirely, we need a move upwards just to reassert the bearishness, as people already short can't get more short so they need to close those trades out and then re short to gain momentum on their bearish trades. Either way, I'm staying away from the EUR at the moment as if a "grexit" comes about I really couldn't tell you what happens to the EUR, some think down hard, some think up. Who knows. Either way the next few weeks should be interesting.

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Whether we can be more inspire some another currency than Swissy franc this week? Whether prepare the new big currency war among SNB and the rest of the world? Whether we trade this extremely volatile currency like is CHF? And whether is CHF still the safe-haven currency? This is some questions which are about CHF and we still didn’t have clear answer. On 6th September SNB is on their statement said that Swiss National Bank sets minimum exchange rate at CHF 1.20 per Euro. What happened after that ?   The picture says more than thousand words. Maybe I did not have more than 20 years experiences on the market but for my several years of trading on forex I did not seen jump like this above. More than 1.100 pips for less than one hour, because of one sentence from SNB.  Definitely this sentence, statement or action we can declare the event of the week or maybe entire month. Sure that this the last remaining chance for SNB to prevent the further strengthening CHF which blight Switzerland economy. Ok, they managed EUR/CHF to climb above 1.20 and the whole day the pair is above 1.20, but whether the rest of the world remain silent on this action of SNB or will respond? ECB has be…
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dinok85 avatar
dinok85 20 Sep.

Nice article..

Eclipse avatar
Eclipse 20 Sep.

Nice info +1

acp888 avatar
acp888 24 Sep.

good article +1

amerfx86 avatar
amerfx86 30 Sep.

After tree weeks eur/chf is still in range 1.20-1.23. The volatility is less than was month ago. I still recommend to buy below 1.21. Thanks everybody for reading and been interesting for my article. Good luck!

stripedcat07 avatar

Well written article. Good luck with the contest!

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