One of the more interesting Forex news breaking out recently came from Japan. Financial authorities are sending a quiet message that they are displeased with the high level of Yen. Not a direct threat of intervention, by a subtle indication that it is possible.
The budget for the next fiscal year, starting on April 1, will raise the borrowing ceiling for the foreign exchange special account, the government?s war chest for currency intervention, by Y5,000bn ($56.5bn) to Y145,000bn. The news came as the yen approached a 14-year high against the dollar, a level it last hit in November last year.
Looks like BoJ is trying to send a message that they are getting ready to step in the markets, and they are making sure enough funds are available to do the job right. It might appear ominous, but this is likely just another gimmick to scare markets and avoid the need for intervention. But something to pay attention to in coming days and weeks.
Our systems had mixed week, changing places, of sorts. After very bad Daily Pound recovered some the of the losses, while Daily Euro had the worst week of the year. Please see results below and follow link for details.
(Sunday, 03.07.2010.)
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Here are the results for last week:
- Daily Pound made 102 pips ;
- Daily Euro lost 152 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 focused on GBP-CHF, looking for a buy. Our intended entry was at 1.6960, with objective of 1.7150. Unfortunately, market turned around immediately, never reaching our entry. Currently this pair is turning again and we are trying another long entry. Buy order is placed at 1.6370. If this happens, we think that 1.6700 is very attainable.
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Trade of the week.
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Commodity currencies enjoyed another strong week. Canadian Dollar an Australian Dollar continued their impressive gains in relation to just about every other currency. However, some signs of weakness are slowly emerging. For one, New Zealand Dollar has become much weaker, perhaps a warning sign for the rest of this complex. And the advances are not as decisive any more.
With this in mind, we are taking a look at EUR-CAD cross. While it has been falling, the advances are smaller and smaller, possible prelude to a reversal. We will try to buy it at 1.4065, with a target of 1.4160. Should this happen, we will look for more reasons to buy this cross.
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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