TA & Market's Reaction to News

Discussion in 'Forex' started by hcour, Sep 6, 2006.

  1. hcour

    hcour Guest


    I'm trying to understand currency economic fundamentals as part of my strategy, not as economic forecasts so much, but rather as part of a technical pov that includes the influence of fundamental data on the market participants, both professional and amateur, and how that impacts the technical (short-term) and internal (long-term) position.

    Looking at the GBP daily from a strictly technical pov, from C to D to E there is sharp rally back to the previous high at A on climactic vol, a possible upthrust, then a very shallow reaction to F, then a test of F at G on unimpressive vol. So far pv-wise this shallow test is very nice and suggests re-accumulation taking place in the trading-range.

    From G to H almost every close is in the upper-half of the bar and price rallies higher from bar-to-bar, again, seeming to suggest accumulation. But let's look a little deeper: 8/25 & 8/28 are on contracting, low vol, then 8/29 is on the highest vol in a month and the 3rd highest vol since June, yet there is very little commensurate price gain that day. In fact price has really only been creeping up this entire little rally. And here's where fundamentals give one an extra clue at a possibly important turning-point, 8/29 occurred on the most significant good economic news in a week, doing little.

    The break above A is at important s/r but the fact that price can't immediately follow-thru after such a struggle to get there, and the inability to get beyond E, suggests supply at least in the short-term. Looking for a reaction to around 8550-ish.