ForexBasicStep.com

The U.S. Dollar stepped back off a 6-month peak versus the single currency Euro following U.S. President Barack Obama’s State of the Union Address last night in Washington.

So if you avid tennis fans in the FX-world can take your eyes off the ball for a moment with all the excitement of the Australian open, you might want to pay closer attention to the Australian dollar.

Another very popular Forex Strategy is Trend Retracements which has one major advantage, among others, that when using it you are actually trading with the trend. However, how can you determine whether a price is performing a retracement or undergoing a major reversal. This distinction is very important because you need to determine if a price decline is of a long term nature or just a mere relief dip.

The trend of risk aversion continues in Asian trading today, with investors opting instead for the safe-haven Japanese Yen, which saw broad gains. As reported at 1:24 p.m. (JST) in Tokyo, the Japanese Yen rose .5% versus the U.S. Dollar, to trade at 89.15 Yen, the highest level in nearly 6 weeks.

Reports of central bank buying interest lined up at 1.4040 down to 1.4000. Stops below 1.4030 with option protection at 1.4000 and more stops below. Good bids again at 1.3970 and stops below 1.3950 on the EUR/USD. The higher CPI data from Australia helped propel the AUD/USD to a high of .9045, majority of retail traders are already long on this pair.

Here are a number of concepts that you should consider when designing your exit strategy. First, you must always know where to place your initial protective stop. This action is essential to order to prevent you from suffering severe losses should the trade go against you early on. In addition, your stop size must be well calculated in order to minimize your potential loss yet provide your new trade room to breathe.

As widely expected, the UK formally ended its longest recession since record keeping began in 1955 in the last quarter of 2009, figures just released reveal. The UK had languished in recession for six consecutive quarters, but managed to grow by just 0.1% in the fourth quarter of 2009 which perhaps serves to underline the fragility of the recovery in the UK.

Today the Bollinger Bands are even wider, ready for more movement. Each of the other three indicator windows, Full Stochastic, StochRSI and RSI is ready for the EUR/USD pair see some upward movement.

In a classic example of shutting the stable door once the horse has bolted (and possibly the wrong stable door at that) President Obama has announced his plans to change the banking sector to avert a future potential financial crisis such as the one we have been living through.

Each of the hottest news items for the Euro and U.S. Dollar on the 26th are forecast to favor their respective currency. That will cancel any benefits that these news items might have had for their respective currencies for the day. Bollinger bands on the EUR/USD's daily chart are spread wide and foretell of potential volatility. That volatility, if the Full Stochastic, StochRSI and RSI have their wishes granted will be come in the form of upward movement.