Thursday, April 15, 2010

Thursday 15 April

Yesterday the spreads on all European debt widened out but the EUR shrugged it off and stayed well bid.  This morning that negative sentiment looks like it might catch up with it.  EURUSD has got stuck at the 1.3680 level which was a big pivot in February and I am going to try a short here again to close the gap.
Likewise EURJPY is at a big pivot level (check the weekly chart) and struggling so that is an interesting countertrend short today also.
The equity rally has kept the commodity currencies well bid (although there is talk of an option barrier at 0.94 in AUDUSD) and I have missed the big sterling rally somewhat but if the gap closes in EURGBP and it keeps going then it will break out a long term wedge and be a very interesting trade short.  I did think that the support in EURGBP would hold but Sterling is proving strong and Euro sentiment is poor so it may finally break down.
Although Gold has broken out and looks set for higher it bounced off the 1170 level and formed a bearish evening star pattern on the daily and it needs to pull back to try again.  As a range trade this is interesting at the top of the range and I think it has potential to come back as retest its breakout level at 1118
USDJPY is not continuing its rally and I think there are a number of reasons.  The CoT numbers show the market is very onesided on the long side and also I hear that central banks who would normally diversify their USD into EUR are wary of it and buying yen instead. Also talk of Yuan revaluation TODAY is making this cross heavy.   I am hoping 92.00 or 91.30 will give some buying opportunities.

EURUSD short 136.30 stop 1.3655 target 1.35
EURJPY short127.10 stop 127.40 target 125
GBPCHF short balance stopped out 1.6335 (+0.5R)
EURJPY closed 50% @50fib 125.70 (+2.33R)
EURUSD closed 50% @3R 1.3555 (+1.5R)
EURAUD closed 50% @3R 1.4535 (+1.5R)
EURJPY closed balance @126.00 (+1.83R)
EURGBP short 0.8767 stop 0.8787 target 0.86 + lower, looking for trendline break
USDCAD long 1.0001 stop 0.9976 target 1.010
EURUSD short 1.3560 stop 1.3590 - addition, 4hr IB
GBPJPY short 1.44 stop 1.4445 target 142.65 / 141 - 4hr IB
NZDJPY short 66.15 stop 66.40 target 64.50

I am a little heavy short EUR but Greek and Portuguese bonds are being murdered so ... :)
Open trades:
EURCHF short 1.4365 stop 1.4385
EURAUD short 1.4640 stop 1.4675 - 1/2
EURUSD short 136.30 stop 1.3655 - 1/2 + 1.3560 stop 1.3590
USDCAD long 1.0001 stop 0.997
GBPJPY short 1.44 stop 1.4445
NZDJPY short 66.15 stop 66.40

End of day update:  Cable has stalled again at 1.55 following the election debate in the UK and Google failing to meet estimates has down pressure on Jpy crossed and indices.  Hence I am selling GBPJPY (& NZDJPY).  I would really like to sell EURJPY but I am already too short EUR and CHFJPY is the same trade.

GBPJPY 4hr chart

NZDJPY 1hr bear flag


  1. Nice Nic, do you have a rule to limit correlated trades, just in case?

  2. Yeah I have a max risk. That's the reason these are the only trades I took today, they are all correlated. The EURCHF and EURAUD that I had for a couple of days I moved stops to protect before I added more EUR shorts.
    Ideally I would have picked the best one EUR short and just left it at that, but this was one of those mornings.

  3. Well, gaps are meant to be closed, arent they?
    Nice trade, Nic! Way to be persistant on that one.

  4. Nic, I think you should start giving signal services. I know it's a pain on the backside but there is no harm as you are taking trades anyway, and It'll help a lot of people, you are a good trader and your trading seems inspiring.


  5. nope, and I'll be the first one to enroll when and if you decide to start!

    This is just my thought, you can shrug it ofcourse.
    I am in full time job and I do trading part time which comes at a cost of family time.
    I know your trading style and it would take some burden off me and some others like me in analysing charts etc.

    Give it a thought sometime.


  6. I don't have any interest in selling signals, I am too often wrong, but I don't mind sharing my views real time.
    I have just joined twitter (I think I am the last person on the planet to join) I suppose I could use that.

  7. I share your sentiments on providing signals.

    Trust me, even bankers who trade daily are wrong very often. I've seen the method used as I managed the project to produce the robot program which executes the logic and it's hillarious. Not that they loose money always but loses are more than winners. They are very satisfied even with account balance UP by 3-5 percent every month since each trade is in ratio of 50-100 lots.

    Well this is a good start.
    Let us know the link as I've to join it as well.