Start of a New Year....

Welcome to 2010, let's hope the financial world gets itself back in some sort of order and we can move on to better times. (Well, sometimes it's better to travel in hope than arrive.)

When I look back over the last few weeks, I remind myself of just why I hate trading during the run up to Christmas and the New Year. Even in normal times the market doesn't always follow a consistent pattern and although there are always opportunities to make money whatever the market is doing I do find it hard to get a handle on things.

While all the talk was of Dollar strength, a quick look at the charts shows some inconsistency in the level of sentiment.


For example, here's the AUDUSD since mid-December. Does that show Dollar strength? I appreciate that the difference in each Nation's Interest Rates offers an element of carry-trade incentive for holding Australian Dollars, but true US$ strength would offset this to some extent and I would expect to see this pair trading in a range more like the EURUSD as shown below.

Here's another of the EURUSD; same thing. The Euro is stuck in a range, admittedly, but after the drop to mid-December you would hardly say we have much in the way of Dollar strength showing here.

I must be honest and say I missed several opportunities on the Aussie as I started to look for buying signals on the Euro and, as I prefer to trade only one pair at a time, found myself locked into Euro trades when there were better things on offer on the Aussie. C'est la vie!

Hopefully you can see how the Support levels on both these pairs have proven to be respected and although the Euro hasn't yet broken out of its range, if price can hold above the 1.4300 - 1.4350 area then I would expect the uptrend to be resumed.