Cashing In While Waiting For Carney and Draghi to Raise Hell Later Today
Skerdian Meta • 2 min read
If you followed our forex signals yesterday, you must have noticed the short term buy forex signal we opened in EUR/GBP when the price was around 88.90, since this area has been turning into a support level in the last few days. The price got close to our original take profit level overnight but it retraced lower this morning.
So, we left it to follow its course and concentrated on other forex pairs. Earlier today, we spotted two good trading opportunities; AUD/USD was getting close to the 100 simple moving average (SMA) and NZD/USD was getting close to the 100 SMA as well. We decided to wait until the stochastic indicator reached overbought levels and when it did, we decided to pull the trigger on both of them, but at an hour difference between them.
The trend in these two forex pairs has been down since yesterday evening, which is another strong element in our favour. If you are wondering, half of the time we base our trading signals on this sort of trading strategy.
GBP/USD felt enticing when the price was about 150 pips higher, but we would have too many signals open at the same time so we decided to leave it alone. That signal would have hit and taken profit a long time ago, but we can't complain because we already got around 70 pips from the other three signals.
I don't exactly know what was the catalyst for this, but the Pound plunged, perhaps due to position squaring or maybe just because of fear. The BOE (Bank of England) chairman Carney is coming up in about an hour. Whatever the reason, the GBP dragged down with it other major currencies and it eventually turned into a broad USD buying. One pip led to another and we ended up with three winning forex signals.
Speaking of central bankers, Carney and the ECB Draghi are about to appear live soon. The forex market is expecting some dovish talk from them regarding the monetary policy. The Eurozone economy has improved but not enough to start a tapering talk. So, Draghi might acknowledge the recent pickup in the economic activity, but don't get too distracted by the noise. The comments about the monetary policy will spur all the action. The same goes for Carney. If we get a hint from either of them about further monetary easing, particularly QE, then expect the respective currency to dive hard.
Anyway, we'll be here to guide you through the process. Just remember to keep the risk limited and to have a backup plan in case things don't go as expected.