In previous articles we have spoken about our preference for combining technical analysis with macro factors and the benefits of keeping up-to-date with economic data, central bank speak and interest rate decisions.
In our view this is one of the best ways to create winning trading strategies. But recently it is easy to get extremely frustrated with the wave of fundamental factors that have caused havoc in the financial markets and had the potential to wipe out positions in an instant.
That can be extremely frustrating to a technical trader. We will look at a few examples here and try and give some tips on how to dodge those macro curve balls.
The first example is the US dollar and the Federal Reserve’s quantitative easing policy. The downtrend in the dollar, which began in mid-2010, was interrupted when the Federal Reserve began their second round of quantitative easing last November. Prior to this, the dollar index looked like it may be heading towards the 2009 lows of 74.50.
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