There is a confluence of supports here at this moment for the Cable. Besides a throwback to the previous resistance trendline, there is an addition of 55ma on the 4-hour chart as well as monthly and weekly pivot M2. If the 1.9600 to 2.0024 move were to qualify as a bullish wave1, the current down (potential wave2) may retrace to 1.9762 region to make a 61.8% retracement.

The current low of USDJPY has made an extended move of 161.8% of wave 1. It waits to be seen now whether we have a reversal or a revision of the wave count.

To handle the volatility and ranging behaviour of many pairs in the forex market, the trader should be prepared to enter at a point of strength or have a very wide stop.

Most day traders would probably not be prepared to have stops of 50 pips or more. Having a nice small stop would prevent excessive losses but get us knocked out by knee jerks or ‘wash and rinse’ pretty often.

Pivot points help us to cope with this. There is alot of information about the use of pivot points and how to set them up so I won’t go into them. The simple way is to look at pivot points as magnets in the charts. Due to the extensive use of pivots by institutions, much action of buying and selling therefore take place at these levels.

As a result of this activity, pivots act as good resistance and support levels. It means also when a level is finally cleared, price can move to the next level. In the meantime, everyone is contented to play pinball.

By watching the price action near to pivots, the trader can wait for the technical picture to unfold. When an irresistable setup presents itself, entry can be made with a small stop on the other side of the pivot for a low risk bet.

Interest rate decisions affect currencies in a big way. The Bank of England or BOE is the central bank of the United Kingdom. Its interest rates decisions naturally reflect the Sterling. On April 10, 2008, the BOE reduced the official Bank Rate to 5.0% from 5.25%.

According to the Bank of England, “The Bank sets interest rates to keep inflation low, issues banknotes and works to maintain a stable financial system.”

This is a BIG economic indicator to watch out for. Firstly its content is very timely (preceding month) and secondly it is full of details about the job market and household earnings.

Last night we saw the:

• unemployment rate
• average hourly earnings
• average weekly hours
• non-farm payrolls (NFP)



Employment situation is generally announced at 8.30am ET on the first Friday of each month. Revisions may be done in later months.

It comes from the Bureau of Labor Statistics, Department of Labor.

The results cause big jolts in the various dollar pairs and carry trade crosses. Attached is a illustration of the EUR/USD on the 15min chart after the results were released.