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Story of the week came on Wednesday the 8th. Newspapers in Hong Kong and UK published a story about China. More precisely, about Chinese 1 trillion+ holdings in foreign currency reserves. According to the articles, Chinese Central Bank was orchestrating a "fire sale" of US securities, mostly treasury bonds and notes. All currencies gained ground against USD. Sharp moves. Next day trends reversed just as fast on denial of said sale by Chinese financial officials.
While it's not a secret that they are diversifying their holdings, it's done in a slow and systematic manner. Whole sale dumping of USD is not in the best interest of anybody involved. There are many reasons for that, but main one is that extremely weak dollar will make Chinese products less attractive in US, altering the trade balance. We don't think they want to see it. Bottom line is, that both economies are to a degree dependent on one another and dramatic moves in financial markets, and Forex, are likely to harm economic conditions.
Speaking about foreign reserves. Four years ago Russia had about 70 billon dollars in foreign cash. Now, thanks to high price of commodities, mainly oil, they sit on over 400 billon $. Don't be surprised that in a few years they will be swinging the big stick when it comes to this subject. And who knows what they might do?
Here is what we did last week. "Rainbow" had a good week, although we took small losses on last couple of trades. We posted sreen shots of all our trades in chronological order here.
As far as we are concerned, "Daily Pound" was the story here. We cleared 243 pips. We use leverage here, so the gains were really good. Hopefully it goes on.
"Daily Euro" had a decent week, getting ahead. Follow the link below to see all the trades. |
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Here are the results we achieved last week:
- Rainbow made 498 pips in closed trades;
- Daily Pound gained 243 pips;
- Daily Euro earned 56 pips for the week;
Follow the link on the right to view details |
Last week's results. |
| Our "Trade of the week" from 08.05.2007. Set up was to go LONG USD-CAD at 1.0607 with a target of 1.0685. Price started to drift lower, at what point we changed the parameters of the trade. We entered LONG at 1.0547, with a target of 1.0602. Subscribers were, as always, notified about trade change. |
Another one of trades from last week. This one was SHORT EUR-JPY. We entered at 164.72 and closed it at 163.44, for a gain of 128 pips.
There were 2 more trades in JPY crosses. We took a loss in AUD-JPY trade and had a good result in GBP-JPY trade. We posted screen shots of all trades from last week here. Take a look. |
For this week our focus goes to GBP-USD. Set up of the trade is to go SHORT 2.0140 with a TARGET of 1.9950, or almost 200 pips.This trade is generated using 4H charts, so it should come as no surprise it might take 1-2 weeks to complete. Draw downs could also be deep.
Have a great trading week! |
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Once again we must stress that the trades highlighted here are only a small sample of our trades. If you have any comments or would like to obtain more information please contact us at info@spectrumforex.com .
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Risk disclaimer:
Substantial risk is involved. Forex trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the Forex markets. Don't trade with money you can't afford to lose. Nothing in our website shall be deemed a solicitation or an offer to Buy/Sell futures and/or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on our site. Also, the past performance of any trading methodology is not necessarily indicative of futures results. Trading involves high risks and you can lose a lot of money.
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