News from central banks dominated Forex landscape last week. And they all are about the same. Seems that central banks are engaged in a contest of who will reach 0% rate first. This race heated up over few days as a score of countries reported lowering of their benchmarks. Central banks of EU, Great Britain, New Zealand, Sweden and India all announced cuts. FED is widely expected to follow suit during next meeting. For most of them it is a third or even fourth round for this action, with very little to show in return. Economic outlook remains grim and their respective currencies continued to get weaker, most notably against JPY. Japanese Yen looks immune to own economic news and just keeps on getting stronger. Technically, however, this impressive rally mighty nearing an end. The gains are smaller and smaller, which often indicates slow and orderly trend change.
We fully expect central banks to keep cutting rates in near future.
Our systems both showed positive results for the period, but the difference in performance was large. "Daily Pound" had impressive results due to a huge single trade gain on Monday, one of the best of the year.
Please see the results below and follow the link for details.
(Sunday 12.07.2008)
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Here are the results for last week:
- Daily Pound made 243 pips ;
- Daily Euro gained 17 pips;
Follow the link on the right to view details.
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Last week's results.
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Our trade of the week was in USD-CAD. As a reminder, we were looking to buy this pair at 1.2494. Trade unfolded as planned and reached our target 1.2650, for a gain of 156 pips. Canadian Dollar continued to get weaker, reaching 1.300 by Friday. We see farther CAD deterioration ahead.
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Since the global crisis started to unfold, perhaps no other currency has suffered as heavy losses as British Pound, with the possible exception of Australian dollar. GBP fell to levels not seen in years or, as is the case against EUR, all time lows. Bank of England has responded by slashing interest rates numerous times, all the way to 2%, level not seen since 1951. So far, however, markets were unimpressed.
This situation might be turning around. We think GBP is nearing its bearish run. We are not trying to predict the exact bottom, but rather think that trades on the long side of the Pound present better opportunity.
This week we will try to go long GBP-USD. The set up is to buy it at 1.4855, with a target of 1.5000. If the trade is initiated, it should not take long to reach that level.
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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