Sir Pipsalot's Wednesday Market Update 03-31-2010

Sir Pipsalot

Former FPA Special Consultant
Hey folks,

The EUR/USD did manage to hold up for another good momentum buy yesterday before finally topping out around 1.3540 (around where I thought it might on Sunday night's signal). Anyhow, it looks like medium term we may be in for a 1-2-3 type retracement pattern, which means the reversal lower could stop and head higher anywhere from here (near 1.3400), or as low as the mid 1.3200's... so buying a dip seems a bit problematic from a SL perspective. Also, the long term trend is clearly down, so there's always the risk that the trend resumes sooner or harder than you expect. So my advice is to continue to play off of the 1hr and 15m chart momentum by selling around the 10 EMA when we're trending down (like now) and buying around the 10 EMA if we clearly reverse higher later today. Price seems to be zooming up, then zooming down, sometimes holding trends for several sessions at a time.

Once we get to a more lucrative spot or setup for a long term trade, I'll let you know what I see. Suffice to say that EUR/USD is pretty doomed long term (maybe 1.0000 is possible in the next year), but we're a bit oversold right now and due for retracement, so it's not the best time to jump in on that.

In stocks we had another lackluster sideways day without any downside momentum, so I'm going to close my shorts for a small 6 point loss here at 1168 and wait for a decent break below 1159 before reentering. This is in accordance with my recommendations yesterday to bail if we failed to mount a selloff today.

In news today, UK GDP and US Consumer Confidence both came out close to expectations, so there were no trades on either. But AU Retail Sales came out VERY low and forced the AUD/USD down over 60 pips (it's still down almost an hour later as I type). In news Wednesday:

0815 US ADP Employment Change (40K expected) - We have not seen a surprise on this indicator for quite some time, so it's hard to say for sure whether it will be a blockbuster or a dud if it comes out way off again. I tend to think it will perform decently and even give a bit of extra time to get in early at a good price, so I'd watch this one just in case.
If it comes out at 90K or higher, USD/JPY should rally 30 pips.
If it comes out at -10K or lower, USD/JPY should fall 30 pips.

That's all for today's update. If you'd like to learn more about trading or trade along with myself and my collegues, come join us at Profit Mongers. Our subscription is very reasonable at $179 per month, and right now you can sign up for a 2 week trial to get started for only $29. This offer is for new customers only. If you have any questions, you can also email me at

To our success!
Sir Pipsalot