How do you compensate for losses when you ought be profitting? If you were trading off some currency other than the EUR/USD then i beg to say that you just missed some cool 200 pips plus last friday. Events from the past week had indicated that the EUR/USD was on the verge of a major bullish breakout, with price pushing aggressively above trend defining resistance line 1.4215 set from record high in mid july 2008. A breakout above this line further exposed the upsides at 1.4400. The pair broke above 1.4290 on friday soaring high to a one year high closing the move at the end of the day at 1.4480.
EUR/USD posted the highest weekly close since December 2009 raising for the second week in a row and posted a gain of more than 200 pips.
Trading forex is fun most especially when you know what to do when trading and keeping in touch with the spate of events globally.
For some weeks now, the Eurozone has been engulfed with the bail out issue initially from Greece, then Ireland and now Portugal. These bail outs when considered has its root in corruption by Government officials running these countries like private entreprises. The question is who gets to bear the effects of these bail outs?
If you are trading the pair you need understand how such major issues will impact on the pair, then consider the fiscal policies of the Eurozone.
About the time the Portugese Government made the appeal for the bail out the Euro rate hike impacted positively on the pair driving the Euro higher.
In the coming weeks ahead if quality fiscal policies merged with good fundamentals are employed, the Euro may just be gearing up for a move towards the 1.50 boundary.
You definitely dont want be hedging in the wrong pair.
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