Gold and silver reverse
Hi, everyone. Let us do market trend analysis for today. I do not know what caused huge move in precious metals today, but silver and gold did collapse. This did not affect oil market, probably because Canadian dollar rose after positive reaction of the market to news from Canada. One thing is sure; if you are a technical day trader you could have predicted the reversal in silver and gold by watching price action in those commodities.
A clear head and shoulder pattern in both securities on 1 hour chart could have given you enough stimuli to sell the commodities below the neck line. However, I do not trust head and shoulders patterns on 1 hour charts very much, because there are a lot of false signals on the time frames, especially when securities and trending in the way silver and gold do now. Unfortunately, silver slipped below its previous resistance and you can never know whether it will continue raging now or will come back to its multiyear trend soon. Gold looks a little bit stronger than silver now. I believe this phenomenon will change soon and silver will reign supreme.
Possibility to trade eur/cad during news from Canada
News from Canada had big impact for currency and oil markets. Although the rates were left unchanged big dogs bought loonie pushing it higher against other currencies and causing oil to rise. I enjoy analyzing volatile pairs. These provide you with the best opportunities for they can walk the biggest distance when news is released. So, I will look how one could have traded eur/cad pair and you can analyze yourself how usd/cad or cad/jpy could have been traded during today�s news.
I really think I won�t need it to do it quite soon for if you read my post you will probably are able to do it on your own. Anyway, news was scheduled at 13:00 GMT. It means you should have placed your stop orders a few minutes before the time. As the market was not very volatile before news release you can boldly place a buy stop above 1.3551 level and a sell stop below 1.3505 level. News came and the pair moved downwards. This would have opened your short order. When this happened you had to remove your long stop order and go down with your short order. You could have exited your first position at the first support of 1.3450 (previous support level) and left the other one to continue going. I think the second position would not have given you that much profit as the first one had because the market started retracing and your profit in the second position would have been lost.
That�s how you could have traded Canadian news in eur/cad pair. Hope the market trend analysis was useful.
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Disclaimer
Trading financial markets carries a high level of risk, and may not be suitable for all investors. All information on the blog is of educational nature and cannot be considered as advice, recommendation or signals to trade in any financial markets.
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