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Long USDJPY

dailyfx — Mon, 01 Mar 2010 16:34:06 +0000

The USDJPY failure to break below 89.00(which has been a strong support level) could be an opportunity to get long the pair. The potential for a Greece bailout could spark a bout of risk appetite leading to support for the pair. I wouldn’t bet on a longer-term bullish trend, but I do see potential to 100-Day SMA at 90.20. The expected negative NFP release on Friday may limit any bullish potential beyond that. However, unexpected job growth will increase the potential for an extended move.

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Back to System Trading

dailyfx — Mon, 01 Mar 2010 16:33:48 +0000

My last three trades have all been stopped out, and I’m obviously not in good sync with the market. I may just have to go back to basics entirely and rely 100% on my favored Systems Trading, refraining from discretionary trades until I get a better feel for the market.

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Look for a Range-Bound Week Ahead of Non-Farm Payrolls

dailyfx — Mon, 01 Mar 2010 16:33:08 +0000

This week, the United States Bureau of Labor is likely to announce the U.S. economy probably lost more than 50K jobs in February. And even though the unemployment rate is expected to stay relatively unchanged, it’s now more than apparent that a model of job creation purely driven by government stimulus is not working as predicted by the Obama administration. That said, I still think the US dollar is a better shape than other currencies and I expect the greenback to rally further in 2010, in particular against the fragile euro and the lower yielding Japanese yen. However, I will revise that forecast against the dollar if I feel the Federal Reserve will not be able to handle an enormous political pressure to keep interest rates at a record low.

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LONG GBPAUD @1.6650

dailyfx — Mon, 01 Mar 2010 16:32:17 +0000

Unfortunately we were railroaded on our short EURGBP position from 0.9025 this morning. However, technical studies in Sterling on the crosses should not be ignored and we have now established a fresh long position on this cross with the market at multi-year lows and severley oversold. We are already long Eur/Aud and Eur/Cad with buy and hold positions, and we will take the same approach here with leverage of 5x. POSITION: LONG @1.6650 FOR OPEN OBJECTIVE.

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Pending Long USDJPY

dailyfx — Mon, 01 Mar 2010 16:31:51 +0000

The USDJPY halted the six-day decline, with the exchange rate rising to a high of 89.38 during the overnight trade, and I am certainly expecting to see a short-term correction over this week as the pair maintains the broad range carried over from January. As a result, a have placed a long entry at 89.51, last Friday’s high, and will target 50-Day SMA at 90.85, with the stop at the psychological level of 89.00.

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Remain Short GBPUSD

dailyfx — Mon, 01 Mar 2010 16:31:33 +0000

I initially sold GBPUSD at 1.5765. Last week, prices took out support at the bottom of a falling channel established from the swing high in mid-November and met my initial objective at 1.5291. Bearish momentum has since intensified and now the pair is trading well below my revised the soft target at the 1.50 figure, although a daily close below it has not materialized as of yet. I will hold off on further revisions to the trade for now, but will certainly remain short and looking to update the objective toward the 1.4650 area if a clear daily break through 1.50 is confirmed. A stop-loss remains at the break-even level (1.5765).

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Remain Short GBPUSD, Remain Long EURUSD and USDJPY

dailyfx — Mon, 01 Mar 2010 16:31:18 +0000

In a fortunate turn (for the speculative crowd), the new trading week has started off with a bang. The broader currency market is showing considerable volatility; and to further add to the mix, there are stand out moves from a number of specific currencies. The most active majors this morning happen to be the British pound and US dollar – two currencies that I have carried exposure in for a little time now. On the whole, this opening move is favorable to my existing exposure; but the question now is whether we will find meaningful follow through. If the momentum this morning was founded on one or two primary drivers (like investor sentiment or growth forecasts), then I would be more confident that the market is working towards more meaningful follow through. Yet, that isn’t the case today. Risk appetite seems to generally be on the rise (equities are up across the board), the dollar is advancing at an impressive clip, while the pound and euro are tumbling. Such an ecclectic mix will struggle to sustain momentum.

As for my positions, I’m holding on to the same pairs that filled out my account last week. The best performing of the lot is my GBPUSD short. After having taken profit on half the position last week, I am letting the remaining half of this layout run. This morning’s plunge does look suspicious; but I would rather trail my stop than book profit just yet. My loose target at this point is 1.45. While the pound continues its descent, my EURUSD short looks to have the greater level of unfullfilled potential. Now eyeing the double swing low at 1.3450, this pair is the verge of finally breaking out of its tight range. Follow through here could be considrable; but I will keep my outlook limited to 1.30 for now. At the same time, I have decided to take profit on the recent upswing in USDCHF. I will reenter here should the pair overtake 1.09. And, then there is USDJPY. This is a longer-term position with plans that ential a scale in / scale out approach. For now, my reduced-size position doesn’t have a stop; but I plan to add should we reach 87.50 or surpass 90.50.

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Long USDCAD

dailyfx — Mon, 01 Mar 2010 16:30:50 +0000

I am extremely bullish against 10368. The rally from there is in 5 waves, which indicates, with a high degree of confidence, that the larger trend has turned up. 10480-10520 is short term support. The minimum objective is above 10875.

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Remain Long EURAUD and Short AUDCAD

dailyfx — Sat, 27 Feb 2010 19:14:42 +0000

The commodity currencies have suffered from the same volatility that has roiled the rest of the market; but the distinct correlation that these particular fiat units have to underlying sentiment trends has created ugly chart patterns. Many of the crosses are in the middle of ill-formed ranges or are pushing new trends. In this volatile mix, there are few clear levels to mark entry and stops; and the general lack of a clear trend means most positions would have to be actively monitored with a high level of risk given the presence of volatility. Nonetheless, there is considerable opportunity out there. Should risk trends rear next week or the RBA deliver a surprise; it could develop breakouts that are perhaps a little vague right now. For now, it is a wait-and-see game in looking for new positions.

As for my existing commodity currency exposure this week, I had two setups. I am still long EURAUD (in a reduced size) after it bounced up from the bottom of its descending trend channel. However, it is important for me to keep things in perspective and realize that until there is a bigger reversal, this is just a counter-trend bounce. An objective of around 1.54 is a reasonable target. If the market moves back above 1.55 (a long-term pivot) or 1.57 (the top of the 10-month trend channel), I will reevaluate the opportunities. In the meantime, I’m happy with reasonable and more modest targets. My other position – AUDCAD – has not be as successful. The pair has tentatively pushed above 0.9450 and has come close to being stopped out before a 61.8 percent Fib stepped in at 0.9475. With a cutout point just below 0.95, there isn’t much room for the short-term rising wedge to push. As a side note, to those that were cognizant of AUDNZD’s advance to the LT triple top of 1.2935 and subsequently shorted at that level: kudos.

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Taking a Step Back

dailyfx — Sat, 27 Feb 2010 19:14:24 +0000

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