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Welcome!
And just like that February is over. Time for monthly results check. First things first, however, as there is some additional material to cover. Mainly that run in JPY. Early in the week one of Japanese financial officials made a statement that Japan is unhappy with Yen being a financial vehicle to "carry speculator's debt" or something of that sort. They never express anything clearly but rather word their statements in such convoluted way that at most you get a "hint of their intentions". Regardless, many people attribute recent Yen run up to that statement. It was some run, indeed. Sadly, we missed it. No, that's not entirely correct. We did get in AUD-JPY and EUR-JPY short trades. We even entered at exactly the correct moment and pocketed some profits. Where we failed was to recognize magnitude of the move and take advantage of it. Later in the week we simply didn't see the kind of set ups we use in our "Rainbow" service.
Now back to BOJ statement. Apart from making some vague threats, what are they going to do? Unless they start raising rates in rapid order, to close the interest differential , what other actions can they take? Will they step in and start buying Yen? Doubtful. These are the same people who scream bloody murder and threaten intervention when USD-JPY gets under 115 or so. To sum it up, fundamental picture is very unclear, that's why we stick to charts.
In principle we think that most JPY crosses will continue lower, but more on weakness of other currencies rather than strength of Yen. Most, but not all. For example in our view USD-JPY is ready to turn around and head the opposite way.
O.K., here is our report card for the month of February.
"Rainbow" gained 675 pips in closed trades, we are going into the weekend with one open position.
"Daily Pound" closed the month with a gain of 243 pips.
"Daily Euro" made us 122 pips for the month.
Weekly results are posted just below, and link to the right will take you to our a page where you can view all trades in details.
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Here are the results we achieved last week:
- Rainbow made us 191pips in closed trades;
- Daily Pound earned 81 pips;
- Daily Euro gained 62pips for the week;
Follow the link on the right to view details. |
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Last week we mentioned a possible trade in AUD-CAD. That trade has not happened although is still valid. We decided to discuss something different this week. Let's take a look at a relation between the price of Oil and the direction of CAD-JPY. We first mentioned it on 01.14.2007. There has been a lot of talk in financial press about this relationship with many financial gurus suggesting going long CAD-JPY if one is bullish on Oil. We warned about this kind of trading. In our view if one is bullish Oil, one should buy Oil not some off beat other instrument which might or might not go the same may. Our position is that each market should be viewed through a prism of it's own merit. Here is what happened last week. Price of Oil kept moving up, but CAD-JPY plunged hopelessly. |
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We are taking a closer look at USD-JPY. We think that sell off ran it's course and it's time for a change. We don't advocate a direct buy, unless a target is 500-600 pips with some 300 pips possible S/L. Over next few days we'll be looking at 1H and even 15M charts for trades to the upside with targets of 60-100 pips. At this moment 117.40 level looks like an attractive entry, but we need farther price development to commit ourselves.
We wish everybody a good 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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