Author Bio

For some traders December 18^th, 2008 may have been their best trading day ever.  For others it could have been their worst.  If you remember this day you know exactly what I mean.  In case you don’t recall last December was fairly wild.  EURUSD opened the month at 1.26 and it peaked on Thursday, December 18^th.  In one of the more volatile days of the last few years EURUSD would open Dec. 18^th at 1.4417 before topping out at 1.4717.  It wasn’t done though as by day’s end EURUSD would go ahead and collapse and close at 1.4248.  The ultimate swing in a currency pair.

Why do I bring this up?  It’s not to reflect on the events of that day but the pattern that led into that day and the potential for history to repeat itself again.  The chart below compares EURUSD in December in 2008 to the inverse of EURUSD in December in 2009.  Thus far it is quite a match.

Why the resemblance?  Are we witnessing just another December that is dominated by position squaring?  Or is the Dollar recouping some losses because risk-taking is being pared on the 2010 economic outlook and/or the reduction of the USD carry trade?  It may be too early to answer those questions but certainly one cannot dismiss the resemblance of the EURUSD moves this year versus last year.

Back to December 18^th of last year.  Will we see a repeat of that day?  I do not know if we’re going to see the same volatility or price action but if it does I hope that you are on the correct side of that trade.  History, as I’ve stated once or twice, does tend to repeat itself.

We have had some volatility this December but nothing in comparison to last year.  Still the price action on an inverse basis looks quite similar to last year.  Even if we don’t have a repeat of December 18^th, 2008 again where might we expect EURUSD to head?  Taking a look at the Community Historical Volatility widget on Currensee the first level of support is at 1.4311.  Per Currensee this “widget helps to identify specific price points that historically have been proven to be key contention points…as well as the average entry points for traders”.  That is still a 2 cent move from the time of writing thus using 1.4311 as a target would still offer significant dollar gains ahead.

On the flip side, it just so happens that the first resistance area in the Community Historical Volatility widget is at 1.4721 in EURUSD (4 pips higher than the high from last Dec. 18).

As we move into next week and close in on the New Year  expectations will be for lower volatility and trading volumes.  Ranges may narrow and trends will slow.  We saw this last year and in many years prior.  Post Dec. 18^th last year the market settled in between 1.39 and 1.4360, most days EURUSD traded in a tight 2 cent range.

Just for curiosity sake let’s consider if we continue to replicate last year’s inverse price action in EURUSD for the remainder of the month.  What should we expect in January?  Of course we certainly cannot promise anything but at the very least January should be a favorable month for trends to renew in the forex market.  This past January saw just over an 11 cent move, which equates to about 2 days worth of Dec. 18^th, 2008.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.

Author Bio

All that glitters is not gold.  Although gold has been pretty glittery against the dollar lately, there’s been some interesting discussion on Currensee about the Australian Dollar, too.  It started with Craig noting that the AUD looks strong against the US Dollar and asking for comments.

Barak jumped in with some good technical notes on the overnight interest rate and observed that “0.9000 is a psychological level as well as a technical resistance level” which made me check the Community Historical Volatility widget…

…that shows us some entry and support points on the AUD/USD pair based on the Currensee community’s actions, which we can also see in the Market Watch:

Which shows that the community is split 50/50 long and short on the AUD/USD pair, but there’s more volume long and at least for the moment, the short money is winning.

Log in to Currensee to add your thoughts to the discussion and check the social indicators.

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Be sure to read the full risk disclosure before trading Forex.  Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.

Author Bio

This is the first installment in an occasional series we’re calling, “Diary of a Forex Newbie” in which traders new to Forex and Currensee talk about what they’ve learned about trading and how they’re using Currensee.

With my background in product management, I was as excited as I was unprepared to launch into the world of Forex trading when I joined Currensee.  Since I have exposure to some of the great tools already offered on the site, I decided to try my luck on a few small trades.

I opened up a position in USD/JPY as my first trade.  I’m not sure why it caught my eye that day, but you have to start somewhere.  I ended up holding the position for a couple of weeks, determined not to have a loss on my first trade.  Typical newbie behavior, I suspect.

USD/JPY is my favorite pair, the first one I traded.  I’ve begun to get a real feel for the price changes in this currency pair.  When Currensee released the Community Volatility Indicator, I was armed with information most traders don’t have about the entry and exit prices of other, more experienced traders.  I made some money – enough for lunch – on my next several trades.

Friends and relatives watched me trade dollars and yen on a daily basis, about half an hour a day.  They pretended to be interested in my small wins, which I couldn’t seem to stop discussing.  How long will my streak hold out?  Join my team on Currensee and find out…

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Be sure to read the full risk disclosure before trading Forex.  Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.

Author Bio

Today in Currensee’s community, there’s a good discussion on the USD/JPY.  Marcie wrote that she may have gotten in at the wrong time and asked the community what to do.  So far over 60% say “get out now, it’s only going to get worse” but the discussion is still going.  Read the whole thread and vote in the poll at Currensee.com

As of this morning, 68% of the Currensee Forex community was long in this pair and losing.  I wonder if that’s the same group telling Marcie to get out now?  Will made an observation about Support and Resistance points.  The community volatility widget shows support points a bit below the current USD/JPY price so maybe there’s still hope for the long side.  Only time will tell.

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Be sure to read the full risk disclosure before trading Forex.  Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.