FOREX TRADING STRATEGY OCT 21 - IMPORTANT POINTS
Check out the latest chart analysis of today, October 21.
- Ireland has ordered the closure of all non-essential businesses for six weeks, which is the most powerful, dramatic measure a European government has put in place to control a second wave of infections. The Irish measures will be monitored especially closely for evidence of whether they have succeeded in bending the infection path.
- The Reserve Bank of Australia has shown a willingness to replenish stimulus, with the high likelihood of being in the form of QE packages. This has prompted momentum to sell this coin.
- Pelosi says progress has been made with the White House on the recent stimulus talks and she hopes a deal can be reached by the end of Tuesday (US time). Senate Republican leader Mitch McConnell is said to have advised the White House to give up a deal claiming that Pelosi was not negotiating in good faith, however.
- The dollar was trading near a one-week low early Wednesday as investors were optimistic about the prospect of the US pre-election stimulus and were looking for more risky currencies.
The pair could not approach 106, but was strongly sold around 105.8. Short-term selling pressure is evident on both the daily chart and the H4 chart, so there is a possibility that the price will retest the bottom of the range - around 105. However, this is not a good time to trade USD/JPY. The RR ratio is also not that good. You should patiently wait for a breakout at 105.
As warned the sellers, the price has returned to the zone of 1.183. This is an important short-term transition price zone, also seen as the seller's last stop. Therefore, only trade with clear signals. If it breaks, this will confirm a return to the previous uptrend. Target might be around 1.190. On the contrary, if a bull trap appears and there is an additional bearish signal on the daily chart, then you can consider short-term selling orders.
GBPUSD is still in a state of waiting, fluctuating very little in the past session and is "hovering" in the middle of the sideways price range. Therefore, it is not advisable to add new orders at this time, but only keep available orders. Pay special attention to the two boundary areas 1.31 and 1.285. These are important price zones that determine the next direction of price.
The bet on USDCAD has given you sweet fruit. The price fell sharply to the zone 1.31 as expected. This is the time for you to preserve your advantage. Consider closing some of your orders or moving Stop Loss. In case the price continues to go down and penetrates the 1.31 zone, additional short positions may be considered. The target then will be the bottom for September.
Consider that the price has returned to the 0.70 zone as expected. You should consider exiting short orders or at least moving Stop Loss to reduce your risk. The 0.70 zone is a very remarkable round number, so there may be counter-attacks by the buyers around this area. We should only consider new short positions when it is completely broken.