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| Bank of Japan intervenes.
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At last, after weeks of threats, the Bank of Japan intervened in currency markets in order to weaken the Yen. The trigger appeared to be exchange rate of USD-JPY falling under 83.00, a new 15 year low. Steady selling of Yen by Japanese authorities pushed it back to above 85.00. All other JPY crosses responded strongly, too, staging major rallies following the intervention. So far the advances are holding, with a small pull back late on Friday.
More steps like this were promised should the Yen strengthen again. As always, the Bank of Japan did not specify what the line in sand is. After all, they are not in a business of making it easy for speculators. They much rather markets "feared" not knowing the time and place of new involvement, thus perhaps discouraging Yen purchases by participants. Their resolve will surely be tested during next few weeks, so prepare for volatility.
Our systems took advantage of increased currency movement this week, with good returns. Please see the results below and follow the link for details.
(Sunday 09.19.2010).
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Here are the results for last week:
- Daily Pound made 105 pips ;
- Daily Euro gained 183 pips;
Follow the link on the right to view details.
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Last week's results.
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In our last update we suggested going long GBP-CHF. Entry was at 1.5865, on a breakout above previous high. It took few days, but the move eventually came. Unfortunately for us, the objective of 1.6015 was just missed. Since we used the intermediate term chart for analysis, the position was covered on the close of that candlestick. This produced 81 pips profit.
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In the update couple of weeks ago, we featured a trade in EUR-JPY. The set up was to go long at 109.70, with a target of 112.00. This order was filled when the Bank of Japan intervened, pushing all Yen pairs much higher. Or objective was met swiftly for a 230 pips profit.
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Trade of the week.
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For the time being, we are going to stay away from Yen pairs, until the we get a more clear picture of the aftermath of Bank of Japan's actions. It will not be very long, few days, a week. For now, the focus goes again to Swiss Franc, which is also very volatile right now and should provide decent trading opportunities.
This week we are looking at the USD-CHF, with intentions of buying it. Entry is on a move above last high, or 1.0187. Objective for this set up is 1.0260.
We wish everybody 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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