This is a video summary of the Live Forex Trading Room session on October 23, 2007.

Today’s Summary, by Sunil Mangwani:

No trades today, just observing the markets after the large moves of Monday’s open, and waiting for the currencies to recover and gain some technicals to let us enter into new trades.

Looking at the GBP/USD, the pair recovered - and the recovery was quite amazing, to say the least. After the large drop on Monday, it recovered almost the entire move, and while we were expecting a recovery, we did not expect quite so much of it.

On the AUD/USD we were waiting for the recovery to push the price upwards into the resistance of the Fibonacci Fan levels where it found resistance.

Since Monday was a huge day, we generally looked at the daily bars to see what the technicals were giving us. Monday’s bar was a large Bearish Engulfing Bar, and opened with a gap, which is a bearish indication. Today was also an inside day. This is the kind of pullbacks that we were expecting on a long term basis.

An interesting day should be tomorrow, Wednesday the 24th of October. When price breaks out of the inside bar ranges, that should give us the moves for the day. Inside bars are usually indecisive bars. After a long range day, prices generally pause a little bit, and these inside bars give clues for the next day.

On the GBP/USD on the daily, we have another inside bar, but this one is quite huge. This somewhat distorts the technicals, and we are just waiting for a breakout from either direction.

On the USD/JPY, the large drop in this pair during the last week was kept by the technicals. We plotted Fibonacci Fans from a previous swing low to a swing high. Price found support exactly at the fan levels, and recovered from there. Yesterday we went over the gaps, which price has gone to fill. It seems the trend is still somewhat bullish on this pair, though it seems to be losing a bit of strength.

We are technical traders, so we look for technical triggers. We don’t assume things. Not much intraday activity today, so hopefully we’ll have some exciting breakouts tomorrow.

Enjoy the video!

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