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One of those days for the Intra-day trader to stand aside. Here’s why…
By Sean Hyman | May 6, 2009
Today, the biggest gainer on the day is AUD/USD up only 0.80%. So the biggest gainer on the day isn’t even up a full percentage point.
The largest loser on the day is EUR/AUD which is down 1%. That’s nothing for that volatile pair. So while there is mild Aussie strength on the day, there is no “big momentum” on the day.
Intra-day traders need “momentum” aka “movement” because they have to be “right” and essentially “right now”!
Therefore, on “dull days”, it’s best to stand aside. You will generally find that you preserve profits gained from previous days when you do this.
Note: Since the U.S. Dollar Index recently broke its uptrend, look for the EUR/USD and AUD/USD to have sizable upside days in the near future, relative to its “down days” overall.
The euro is the biggest component (over 57%) in the U.S. Dollar index, so it stands a huge chance at being a huge beneficiary. Also, the euro is the next most liquid currency outside of the dollar. Therefore, it’s the next logical place to go and why it gets the nickname of “the anti-dollar”.
The Aussie dollar has a huge advantage too because its fundamental data has held up much better than other countries…and it also has the highest interest rate out there…of any industrialized nation. Therefore, that gives it a huge “leg up” going forward too.
So once the momentum does come back (probably after tomorrow’s interest rate decision on the euro and pound), you will want to look to these two currency pairs to see how they are faring.
Also, remember that NFP (Non-Farm Payroll) report, comes out on Friday. Get started with a demo account today: http://www.fxedu.com/practice-forex-account
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Tags: AUD, Aussie, blog, currency, currency pairs, dollar, dow, EUR, Euro, forex, forextrading, fundamental, index, interest, interest rate, momentum, movement, nfp, pair, pound, Sean Hyman, ssi, trade, trader, trend, U.S., uptrend, USD
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