After weeks of testimony, pleas and contentious discussions, White House and Congress reached an agreement on help to US car manufacturers. It seemed like a done deal, until the measure reached floor of the Senate and failed to pass. Lucky for Wall Street, it was closed for the day, because financial markets responded strongly. Shares across Asia and Europe tumbled in heavy trading. Panic spread into Forex market, with USD loosing ground. Yen on the other hand, gained strength once again, taking USD-JPY to under 90.00, level not seen in more than a decade.
Politicians scrambled to resurrect the issue and by the time US markets opened, the panic was largely over. US Treasury signaled some kind of new plan to provide money for to auto makers. Story is repeating itself. Original bailout of financial industry also was rejected, yet after some arm twisting, it was pushed through. We can expect similar developments in near future. It appears that the level of public debt is finally starting to weight heavily on traders minds and Dollar is loosing ground again. This might be very important factor going into new year.
We updated our detailed results pages, including performance graphs. Link is provided below, next to last week's results.
(Sunday, 12.14.2008)
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Here are the results for last week:
- Daily Pound lost 150 pips ;
- Daily Euro gained 150 pips;
Follow the link on the right to view details.
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Last week's results.
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Last week we suggested a trade in GBP-USD. Our thought was that Pound should get some strength. Entry was at 1.4845, with a target of 1.5000. We are happy to report that this trade worked as planned, producing 155 pips gain in very short order.
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For the last few months Yen seemed to be the name of the game if Forex trading. Moves of historic magnitude have been made, including all time extreme levels in relation to Australian Dollar and others. A lot of traders are expecting intervention by the Bank of Japan, citing number of reasons for it. Well, we don't know if this is going to happen, but we also know that JPY will not go up forever. In fact, in our view, most of Yen crosses are in the process of building long term bottoms.
With this in mind, we are taking a trade different that most the ones that are featured here. This one is far longer in duration and larger in scope. Our intention is to buy EUR-JPY using daily chart. Entry level is 122.77 with objective of 130.00. Once that is reached, secondary objective will be established. Obviously, this trade will likely take days, maybe even few weeks.
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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