My USD/JPY position poked up through the aforementioned stop in my last post but I didn't have any entry orders in to take advantage and re-open a sell order. Since then its been oscillating a bit and I re-assert that USD/JPY in the short term is a sell above 124 with a key point of resistance being 124.5, so i'm sticking to my guns and selling at the upper ranges of the oscillation as opportunities permit. It should be noted that in the long term USD/JPY fundamentals remain bullish as the Japanese economic policy continues the attempt to stop an immovable object (deflation) with an unstoppable train (inflationary economic policy).
As far as open positions go, I'm holding short NZD/USD and EUR/GBP. Both of these trades are fundamentally driven and i'm looking to hold them for the medium to long term. Current expectations aside, there is a very chilling reason why we can rest assured that being short NZD is a wise decision in the long run. It is not that we necessarily expect them to cut interest rates, it is merely that they can. Their rate (3.25%) is much higher than any other major central banks', and very importantly more than 125 basis points higher than Australia's rate. New Zealand is without a doubt losing the currency war among major central banks and the pressure is increasingly on for them to get back in the race to the bottom. This has been the driver behind the current downtrend and I would expect it to continue until other major central banks begin to reverse policy and a balance returns to the force, so to speak.
Friday, June 26, 2015
Wednesday, June 10, 2015
Looking to sell EUR/CAD, holding short USD/JPY
I opened a short UY position a day ago just in time to catch koruda's early 6/10/15 remarks that sent it crashing. Now 100 pips in the money i've moved my stop to lie in the money between the .382 and and .236 Fibonacci levels of the larger retracement from 125.8 down to 122.5, which incidentally lies between the 0.5 and 0.382 Fibonacci levels of the smaller retracement that began overnight.
One might ask: why would I put a stop in between resistance levels instead of just above resistance? Simply put, its a position I would re-enter if it reversed back up towards the upper resistance band. Strategically a good point to cut the losses on this position is where there is little resistance, somewhere in between pivot points and other heavy resistance levels, so that if I get stopped out it blows through the stop instead of meandering around it. I then can re-enter the position at a better level, essentially saving myself the difference between my stop and new entry position.
In other pairs, EUR/CAD looks technically and fundamentally like a sell right now, so i'm hoping for a small rebound to give me a good entry point, somewhere into the yellow area below:
One might ask: why would I put a stop in between resistance levels instead of just above resistance? Simply put, its a position I would re-enter if it reversed back up towards the upper resistance band. Strategically a good point to cut the losses on this position is where there is little resistance, somewhere in between pivot points and other heavy resistance levels, so that if I get stopped out it blows through the stop instead of meandering around it. I then can re-enter the position at a better level, essentially saving myself the difference between my stop and new entry position.
In other pairs, EUR/CAD looks technically and fundamentally like a sell right now, so i'm hoping for a small rebound to give me a good entry point, somewhere into the yellow area below:
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