ForexSpirit

Another month becomes history. Let’s take a look at how my trading went in April.

I had seven trades close out, all of which were positive. All these trades were initially opened in Q3 or Q4 (i.e. in the top half of my grid) which meant that I used lower gearing when placing the relevant orders with my broker. There was a grid shift in the third week of April after price had stablised above my previous grid high of 1.35 in EUR-USD.

My account change was 3.05%.

I have been relatively cautious about how many entries I place in the top half of the grid. I think that there is far more chance of a sustained move to 1.37 and above then any chance of a move down. In the meantime price seems quite content to meander around 1.36 or even briefly dip to 1.35 or 1.34, thereby allowing everyone to get used to the current lofty heights.

Once traders become more comfortable with price being close to the all-time highs in the upper 1.36s then we should see a continuation of the dollar bearishness. It’s been a long time since the euro was at this level against the dollar. This time around the fundamentals are truely in favour of the euro and against the dollar so while resistance might be pronounced at this level, they are certainly not insurmountable. The strength of the euro and the weakness in the dollar this time around is much more dominant than what existed in late 2004.

Saying that, some dollar strength seems to have seeped into the market this week. Not altogether surprising given the May day holidays in Europe, holidays in Japan and the slightly US positive economic news this week.

There’s also the US non-farm payroll bonanza tomorrow which is always a big deal (for market volatility if nothing else). The estimated consensus for the NFP employment change has been slowly creeping up all week, seemingly in response to the generally better than expected ISM manufacturing, ISM non-manufacturing and factory orders data. The expected reading of 107k is still way below the required 150k number that is really needed to signify that the US economy is chugging along merrily.

While the massaging that can be done on US data releases can never be under-estimated, things aren’t looking too good for a really positive outcome for the dollar tomorrow.

What I am looking for is price to slowly meander down to 1.35 levels overnight, providing an excellent buying opportunity in advance of the NFP release.

It should make for a pretty interesting Friday morning if nothing else!