Analysis of supports and resistances on June 7, 2007

So another crazy day with the JPY crosses running up and down like a cat with its tail on fire. But it is this volatility that makes these pairs such a great thing to trade in. Just have a look at the supports and resistances below which i have specified in the morning of the Asian sessions and you can clearly see how well they have worked. As predicted, EURJPY was caught between the support at 163.05 (lowest for the day was 163.04 on my platform) and the resistance at 164.1 (highest was 164.01). The other pairs were also caught between the specified supports and resistances (you can verify those yourself).

So what now? What is going to happen? As said before, i still dont see this as a trend reversal as there is no fundamental reason for it. It is just a correction. How long will the correction last is anybody's guess. Just make sure that you have enough money in your account to overcome the drawdowns and if u like to buy on dips, space out your buys so that you have enough money in your account.

USDJPY seems to be safe for now and it is the other crosses that do not seem to know what they have to do. This in itself clearly shows that this is not a trend reversal. If it was, then all the JPY crosses would fall together. But the fact that USDJPY is holding good and the other two are not, shows that it is cos something is wrong with EUR and GBP and not cos JPY has become stronger. EURJPY and GBPJPY have gone down and are dragging USDJPY with it. Bad news for USDJPY is that the Dow Jones is also negative and that is making the situation worser for all the crosses. Nothing can go on forever. WE just have to wait and watch and just keep collecting the interest.

Sit tight and just enjoy the ride on the roller coaster. For those who dont have enough money for the drawdown and are on the verge of losing their accounts, well, its a tought life. Just be happy that you have learnt a good lesson in money management. A lesson which no one could have taught you better and a lesson which you will not forget easily.

Happy Trading!!