After months of guessing and speculation it finally happened- first interest rate increase among major economies. Reserve Bank of Australia raised rates on its benchmark cash rate to 3.25% from 3%. RBA pointed to inflationary pressures as reason behind the move. Australia's economy seems to be recovering nicely from the global recession.
Move by RBA came as a surprise to many market players and observers. It came just after the G-7 and G-20 meetings, during which representatives of participating countries agreed to keep their respective stimulus packages in place. Recovery is considered as "fragile" and could be damaged if withdrawal happens to soon.
Actions by Australian central bank catapulted Australian Dollar to new highs. Increased interest rate differential breathed new life into the carry trade, especially against US Dollar, and sparked speculation about what other central banks might do. Expectations are that New Zealand and Canada will follow suit.
Our services had an unremarkable week. While September turned out to be a decent month, last few days were anything but. Please see the results below and follow link for details.
(Monday 10.05.09)
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Here are the results for last week:
- Daily Pound lost 127 pips ;
- Daily Euro made 14 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 from last update was a sell of EUR-USD. Our plan was to sell it at 1.4600, looking for the price to drop to 1.4460. Trade started promising and came within few pips of the objective and reversed. Once that happened, we closed at first opportunity. This was at 1.4551, a little disappointing, but still positive.
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This week we are doing a turn about in our trade of the week. Last time we went short EUR-USD, but the Dollar failed to maintain momentum and came under renewed pressure. With this in mind we are selling USD in favor of British Pound, which is under pressure itself.
Plan is to go long GBP-USD at 1.6060, breakout above last high, with an objective of 1.6200. With any luck, we will not have to wait long...
We wish everybody 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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