It is official, government intervention into troubled credit markets is a reality. After much talk and arm twisting congress has authorized what has become known as a "bailout" of banking sector. First proposal was defeated in the house, so new proposal was drafted, which not only provided $700 billion for non performing loans, but also some tax curs and other incentives. Total bill to US taxpayers is unknown, but believed to exceed $1 trillion.
It remains uncertain whether government intervention will be effective. Stock market sold off when the first bill was rejected, as well as when the second one passed. As far as currencies are concerned USD has been getting stronger for some time, especially following the first vote. Friday, however, has seen very indecisive price behavior, possibly indicating pause in USD rally. Much to surprise of many Japanese yen remained strong, making sizeable gains against most currencies, spare the dollar. One might expect some price consolidation or reversal also.
Current government intervention will surely have far reaching consequences on all financial markets, including currencies. For a few years to come markets developments will be marked by current events. We will follow it with interest.
Our systems were mixed this week, one making gains, the other loosing ground, but both of them closed September on positive mark. Our detailed results pages were updated, including performance graphs. Please follow the link below to see them.
(Sunday 10.05.2008.)
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Here are the results for last week:
- Daily Pound lost 146 pips ;
- Daily Euro gained 116 pips;
Follow the link on the right to view details.
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Last week's results.
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Our trade from last week didn't happen. Our plan was to buy CAD-JPY at 100.90. Japanese Yen continued to get stronger and our entry price was never reached. We will try this again. New buy order was placed at 98.75, with a target on 100.00, or 125 pips.
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For last few weeks Australian dollar has been under some serious pressure. This currency has experienced severe sell off against all currencies. Much of this has been attributed to softening commodities prices, as well as reduction of interest rates. We think there are signs of turning around soon. Best promising of AUD pairs is AUD-NZD. New Zealand dollar is also not the strongest currency around, so this is a good candidate to look for AUD reversal.
Buy order was placed at 1.1810 and an objective is set for 1.1910. We are using hourly charts. so the trade is not expected to last long.
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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