March 15, 2008

Dollar Delicately Poised For Next Week - March 17-21

I've had a very profitable week this last week trading the very weak dollar (see my last post for more details) but it looks like next week the dollar could a lot more volatile and unpredictable.

At the moment the GBP/USD looks like it's poised to go lower in the short term and the dollar may recover slightly as an EMA crossover (5 through 20) is imminent on the 4 hour chart, particularly so if the Supertrend support level of 2.0137 is broken, but the major market mover is the interest rate statement on Tuesday so you have to be very careful about taking any positions on Monday and Tuesday leading up to the announcement.

For that reason I will almost certainly be leaving the dollar pairs alone until after the announcement, and if a good opportunity does present itself in the meantime, I will definitely make sure I exit any positions prior to the statement.

Overall we are still in a very strong uptrend in terms of the GBP/USD and other pairs against the dollar so ideally I will looking to take long positions and will watch EMA crossovers and other indicators for possible entry points.

However as I've already said, I will probably only be trading from Wednesday onwards this week as interest rate statements and other major market moving data releases can often render technical analysis useless with their wild and unpredictable swings.

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