Aug 08 - 13, 2010

GBPUSD short at 1.5884 SL 1.6000 TP 1.5742

Our GBPUSD trade came very close to our stop loss. We are currently at 1.5940 after coming as close as 1.5997. We can close the trade right here or allow it to play out. Indicators suggest that further QE by the Feds will work against the USD and it is becoming more apparent that Euro zone and UK are more likely than not to raise their interest rates so as to load up their barrels for possible future interventions to save their economies.

Bearing in mind that the US fundamentals show a struggling economy and the real possibility of further QE, we should stick to the trend.

EURUSD long at 1.3237 SL 1.3026 TP 1.3500

We need to the excessive Stop loss to prevent sudden conflict from the Yen or Franc side.

Levaz

GBPUSD short at 1.5884 SL 1.6000 TP 1.5742

For those of you that did not close the trade, we are at break even or thereabouts right now. Let the trade play out, and we will lock in 50 or 100 pips at the earliest opportunity. You may place a 30 - 50 pip trailing stop, but with the BoJ meeting notes to be released shortly and upcoming FOMC, you may get stopped out too soon with the trailing stop.

EURUSD long at 1.3237 SL 1.3026 TP 1.3500

There may be some pull back before this continues on. Yet again, we will let the trade play out. Please move the SL to 1.3051 (the eMA's are moving higher). Therefore a sustained break of 1.3051 would mean we have to start shorting the Euro again.

Levaz

GBPUSD short at 1.5884 SL 1.6000 TP 1.5742

For those of you that may have had some worries about this trade, it may be wise to move the Stop loss to break even or lock in 10 - 15 pips. I am letting it play out.

EURUSD long at 1.3237 SL 1.3026 TP 1.3500

It looks like we are getting that pull back. Key levels to watch for are 1.3175 and then our Stop loss at 1.3051

Levaz

GBPUSD short at 1.5884 SL 1.6000 TP 1.5742

So this trade worked out quite well. We closed at 1.5756 for 120+ pips. Those of you that used the trailing stop may not have got as much as there was quite some volatility today.

EURUSD long at 1.3237 SL 1.3026 TP 1.3500 (SL revised to 1.3051)

Move stop further higher to 1.3085 - This one came close to our Stop loss. We expect it will touch the 18 day eMA yet again. There is a lot of data out of Japan, UK and Australia that may affect the Euro. So it is possible that the pull back may be stronger.

Let us tend to the exiting trade.

With further QE for the USD, and excessive moves up for both the GBP and Euro, we do not have many choices for trading. It may be sensible to trade along with China and buy the Yen. The only other safe currency is to be long the Swiss Franc.

Levaz

EURUSD long at 1.3237 SL 1.3026 TP 1.3500 (SL revised to 1.3085)

We got hammered here with poor results from the Eurozone. Loss of 150 pips.

Hope some of you played with the JPY and CHF longs. Both showed great strength in the Euro session. We shorted the ERUJPY last night and are sitting on close to 200 pips.

Levaz

We are going to stay out of the markets for a couple of days. We need to see if there is a fundamental change in market sentiment or whether today was simply an over reaction to the fact (or rumor) that the ECB ended up purchasing Irish bonds since no one else would buy them.

Strange, the banks just recently passed the stress test with flying colors -

Levaz

PS

For those of you who still want to play in this environment.
Shorting the Euro and GBP seems to be the way to go. Be careful, either keep very tight stops (20 pips) or really huge stops (250 pips) - either get taken out early and move on OR give the trade room to play.
Safety lies in the CHF and JPY pairings. You want to be buying these curencies.

Since tomorrow is Friday, and risk aversion is in the air, it is best to stay out for this week.

Also, note that the BoJ had called another meeting for next week to discuss --- the currency rates. They apparently called around yesterday checking on rates, which is why most of crosses went up.

There are a lot of potential trades, but none of them have crosses over their respective eMA's properly, which could possibly mean that they could cross tomorrow or it was simply a retrace. I will be able to gauge this better within the next 24 hours.

Shorting USD, GBP or EUR against the CHF may be a good play. Reason being that if the BoJ is mouthing an intervention, and SNB is laying low, the only safety pair left is the CHF. Proceed with caution, since the SNB has been shedding bucket loads of the Euros that they purchased over the past year in recent weeks. This means that they have a partially loaded barrel to fire from yet again.

Levaz

FYI, I am currently long USDCHF at 1.0550 (again) with a SL of 1.0330 and TP of 1.1700 Right now, I am down 60 pips. I took this trade in spite of advising you guys to stay out of the market, for reasons mentioned above, AND this is the same trade that we were closed out at the beginning of this month by 4 pips!!!

The risk factor to this trade is risk aversion, and flight to safety of the CHF. What i am looking for is flight to USD as well, as is the norm, and that should help pick up the USDCHF as well. Of course, I could be wrong, as the market likes to remind me just so I don't get too cocky