SINGAPORE, SINGAPORE — (Marketwired) — 06/03/13 — Going into June 2013 after a rebound in the USD as a safe haven currency, , Director of Trading & Education at – whose views are widely sought after in the Forex industry, looks at the GBPUSD, shorting the Euro, and at ways of predicting market range movement – amongst other topics, in his blog, “.”
Said Mario, “UK economic figures do not bode well for the GBP and I expect the Pound to experience continued selling pressure. Technically, the Weekly GBPUSD chart shows that the price made a recent low of around 1.4900 this past March. If it breaks this low, the next significant support will be at 1.4400.”
On the Euro, Mario said “The Euro Zone is fundamentally weak, and it looks like it might get worse for the second half of this year. Overall, I see further weakness for the EUR for the rest of this year. Technically, the next key support is around 1.2700. If price breaks below this support, we might see a free-fall towards the 1.2100 level.”
According to Mario, the USD is enjoying a resurgence in demand as a safe haven relative to other major currencies. “Overall, I expect the USD to continue strengthening against the JPY, as well as risk currencies EUR and AUD, until the end of May.” said Mario.
On the question of detecting if the market will move into a range, Mario said that there are a few simple ways to tell in advance whether a market will move into a range, but they are not guaranteed. “One way is check if the price starts respecting the previous high or low (basically resistance or support), which might suggest that it is unable to trade with its previous momentum and may start going into a range,” said Mario.
“Another way is using -at least- moving averages,” he said. “I use Exponential Moving Average (EMA) with period 12 (EMA12) and 36 (EMA36). If moving averages start closing towards each other, it might suggest that price momentum weakened and may go into a range,” he explained.
“You can also use Bollinger Bands,” he said. “If the Bands start to narrow, it might suggest that price momentum weakened and may go into a range.”
“Take note that there are no guarantees in trading,” added Mario. “A market that respects a resistance level does not mean it cannot break the level and continue with its previous trending momentum. Thus, the key is being consistent with your trading methods and trading according to your trading plan.”
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