Thursday, July 8, 2010

Thursday 08 July

No change for sterling this morning but the ECB press conference is coming up in short order.  Cable and EURUSD have been trading sideways while the commodity currencies put in a big rally while we wait for this news and a no-change might trigger them to play catch-up.
As Macro-Man pointed out yesterday, there is the potential for a "tape bomb" from Mr Trichet.  After an impressive rally from the lows EURUSD is coming up on trend line resistance from the Dec09 highs.  
Cable has traded sideways this week after a six week rally off the lows and a sharp dip here would not be a surprise but with the risk rally looking set to continue I would buy any dip back to 1.48, Cable is also close to descending trendline resistance from Oct09 highs and a break of the trendline sets up 1.5550 next resistance.  Cable is also a bearish Gartley fibonacci pattern (invalid above 1.5350) a pattern that has a 70% success rate so I am holding onto my other sterling shorts into the news.
EURGBP is approaching previous resistance at 0.8382 which is also fib resistance, but I expect it to take out that swing high and I would be a buyer of dips looking for 0.8420

AUD added 46,000 jobs last night vs 15,000 expected and has broken it's descending trendline resistance and my upside target.
All in all this risk rally looks set to continue.  The 87.00 level in USDJPY that I mentioned last week has held and JPY crosses look like good buys again.  EURJPY inverse head and shoulders projects a target back at the top of the range at 114.00 and I am looking for a buy entry on a pullback to the 110.85 area.

Gold has retested the breakout level at 1207 and shorts look good to continue.

US unemployment this morning might take the shine off the rally.  How this weeks candle closes is very important for the indices, failed patterns (like head and shoulders) can be powerful trades.

GBPCAD closed 50% @3R 1.5845 (+1.5R)
AUDUSD closed 0.8740 past target and 78fib (+2.2R)
GBPAUD closed balance 1.73 target (+2.5R)
CRUDE closed 25% @6R 75.30 (+1.5R)
USDJPY closed 50% @3R 88.20 (+1.5R)

Open Positions:
USDCAD short 1.0600 stop 1.0630 PT 1.0410 - 1/2
GOLD short 1199 stop 1209 PT 1166
CRUDE LONG 72.30 stop 71.70 PT 75.00 - 1/4 position
GBPCAD short 1.5995 stop 1.6045 PT 1.5610 - 1/2 position
USDJPY long 87.30 stop 86.90 PT 89.20 - 1/2


  1. Here is the link to watch Trichet live:

  2. i could not have let gold retrace all those pips!!! how do you do it?

    mind you if you get 1k pips a week then a hundred here or there is pocketmoney :)

    i suppose a hero or zero rule stops fiddling with the trade?

    boring morning. no action as expected. so watched tour de france etc. hoping for something 4pm.

    given everything is correlated is there an advantage playing lots of markets?

    is there a site that gives pattern probability numbers?

  3. Hi Richard,
    That retrace was HARD, I was sure it was going 50% back and I would be stopped out. That is the problem when you trade a break of support, it will come back and retest it.
    It did help that I had other positions that were doing really well.
    I do try and stick to the rules, so it hits the target or stops me out because I know over time it will make me profitable.
    Being offside isn't fun, I sometimes just drop the chart so I am not looking at it.

  4. Closing my sterling and AUD positions here. We are past my target levels.