Still sitting on the 2 EUR/USD and 1 USD/CHF trades for now. I almost added a third EUR/USD trade, but price flirted with my buy limit by 4 pips! It's now time for some thinking.
On the EUR/USD Front, we have the event risk of the ECB Press Conference, where it is hoped Trichet might use the magic word 'vigilance' in his statements, reconciling hawkish expectations of rate hikes in the coming months. If this were to occur, it is not unreasonable to posit that the pairing will be bolstered upwards - possibly even past the 1.4950 resistance, and will then have 1.5000 in its sights.
Such large movements in EUR/USD will affect other majors, and one of particular interest is USD/JPY, which is slowly creeping downwards to 80.00. BOJ has a mandate to maintain the exchange rate at an acceptable level to assist the various export giants who contribute heavily to the economy, and below 80.00 the possibility of intervention is re-kindled. I will enter long on this pair after it breaks 80.00 and the market has some time to digest and react to the move. Furthermore, with hawkish talk from Trichet, I also envision a resurgence of carry trades in EUR/JPY and AUD/JPY, which will help lift USD/JPY. Thus, the downside of USD/JPY is quite limited which will make for a low-risk trade whether there is hawkish chatter from the ECB or not. (I believe prevailing sentiment alone will be enough to drive the pairing to intervention levels - albeit much more slowly)
USD/CHF trade is still being held because there is still Middle Eastern Tension, the trend of bearish U.S economic data is still around, coupled with dovish monetary policy talks from Fed Officials, and I'm still weary of any possible repercussions relating to Bin Laden's death which have not surfaced as yet. The latter though I'm willing to denote a less significant role as time progresses. Additionally, uncertainty regarding the memebers of US Government to reach an agreement about the debt ceiling should add further downward pressure.
I also initiated a long position on AUD/USD, which already has half the trade taken off at R/R 1:1. In the near-term, I'm looking for a move to 1.0775, which should be considerably easier to reach given the clearance the disappointing retail sales has produced.
Entry could have been considerably better, but I was a tad impatient....will have to work on that...I also need to get up to scratch with what's happening in Australia, Japan and England...I feel like my trading will be greatly improved with this knowledge. With that I'm off to finish my Math - Probability to be precise, which is such an interesting topic I wish I discovered it earlier! I see a great many ways to apply it to trading.
Regards,
xXTrizzleXx
On the EUR/USD Front, we have the event risk of the ECB Press Conference, where it is hoped Trichet might use the magic word 'vigilance' in his statements, reconciling hawkish expectations of rate hikes in the coming months. If this were to occur, it is not unreasonable to posit that the pairing will be bolstered upwards - possibly even past the 1.4950 resistance, and will then have 1.5000 in its sights.
Such large movements in EUR/USD will affect other majors, and one of particular interest is USD/JPY, which is slowly creeping downwards to 80.00. BOJ has a mandate to maintain the exchange rate at an acceptable level to assist the various export giants who contribute heavily to the economy, and below 80.00 the possibility of intervention is re-kindled. I will enter long on this pair after it breaks 80.00 and the market has some time to digest and react to the move. Furthermore, with hawkish talk from Trichet, I also envision a resurgence of carry trades in EUR/JPY and AUD/JPY, which will help lift USD/JPY. Thus, the downside of USD/JPY is quite limited which will make for a low-risk trade whether there is hawkish chatter from the ECB or not. (I believe prevailing sentiment alone will be enough to drive the pairing to intervention levels - albeit much more slowly)
USD/CHF trade is still being held because there is still Middle Eastern Tension, the trend of bearish U.S economic data is still around, coupled with dovish monetary policy talks from Fed Officials, and I'm still weary of any possible repercussions relating to Bin Laden's death which have not surfaced as yet. The latter though I'm willing to denote a less significant role as time progresses. Additionally, uncertainty regarding the memebers of US Government to reach an agreement about the debt ceiling should add further downward pressure.
I also initiated a long position on AUD/USD, which already has half the trade taken off at R/R 1:1. In the near-term, I'm looking for a move to 1.0775, which should be considerably easier to reach given the clearance the disappointing retail sales has produced.
Entry could have been considerably better, but I was a tad impatient....will have to work on that...I also need to get up to scratch with what's happening in Australia, Japan and England...I feel like my trading will be greatly improved with this knowledge. With that I'm off to finish my Math - Probability to be precise, which is such an interesting topic I wish I discovered it earlier! I see a great many ways to apply it to trading.
Regards,
xXTrizzleXx