July 18 - 23 2010

We need to be cautious in our next moves. The Euro seems to have been rejected at 1.3000 and could possibly come down again. So we will short it, but will take small bites, just in case the Euro bulls have not had enough as yet.

EURUSD short at 1.2978 SL 1.3038 TP 1.2922

Critical point are 1.2850, 1.2750 and 1.2600 - There is a good possibility that all three points may come into play. And based on current sentiment, I am looking for a good position to go long. And the best would of course turn out to the 1.2600. We still need to see some confirmation of Euro strength (actually USD weakness).

Levaz

EURUSD short at 1.2978 SL 1.3038 TP 1.2922

Market opened way below, delete the trade.
Levaz

Sorry about the signal from yesterday, turned out that it was a great short to get a quick 50 pips. But I had to be careful, just because if it came up 100+ pips, there was a good chance that we could simply be stopped out. Especially with 2nd quarter results being announced.

Speaking of which we had IBM and Texas Instruments lost 3% and 5% respectively in after market trading, which should lead the Euro lower in the Asian session. More stress results will be leaked to push the Euro higher in the European session. So the current outlook is USD weakness based on poor US data and expectations. Budget tightening to improve Euro posture.

That said, we have the following trades:

EURUSD long at 1.2800 SL 1.2600 TP 1.3000

Ideally, if you are patient and want a really good entry with lower risk exposure, wait for an entry point of 1.2650. Personally I am waiting for the lower entry point, which we may have to adjust to 1.2700 depending on how the market behaves. If you do not want to risk being left out of trade, then stick to the 1.2800 entry. Remember that it is a 200 pip SL - so reduce your lot sizes accordingly.

Another good trade, but we need a lot of room for, is the EURCHF.

EURCHF long at 1.3600 SL 1.3450 TP 1.3800

You MAY have to be pro-active and enter at 1.3625 if it looks like the consolidation is stalling but if you are not sure, then stick to the 1.3600 entry.

I know that some of you guys have an aversion to this pair ha ha, but it has been heavily oversold, and now that the Euro is on the mend, it may make a for an excellent long term trade.
My personal entry will be carrying a TP of 1.4000 which will be adjusted as the trade evolves.

Levaz

Here is another trade that may have lots of good pip potential:

GBPUSD long at 1.5112 SL 1.5000 TP 1.5450

While it may look like the GBP is going down, the fact that it did not crash as fast as it went up (which is the norm), leads me to believe that we should see a rebound at the 1.5100 area. The 112 pip SL may not prove to be enough room for the trade to evolve, but that is how much I am willing to risk based on the current market conditions. There is no point allowing 200 - 300 pips as a SL.

USDCAD long at 1.0509 SL 1.0409 TP 1.0750
While the USD index shows that the Dollar is headed down for now, the commodity currencies are being hit the hardest with the sell offs in the EURAUD, EURCAD, GBPAUD and GBPCAD pairings.


Levaz

EURUSD long at 1.2800 SL 1.2600 TP 1.3000

We are closing in on the entry, but as suggested above, I would wait for the better entry at the lower 1.2600 - 1.2650 area.

EURCHF long at 1.3600 SL 1.3450 TP 1.3800

Trade has been picked up. Good Trade balance from Swiss has taken this pairing down, but let the trade play out.

GBPUSD long at 1.5112 SL 1.5000 TP 1.5450

Came as close as 1.150, let us see if we get picked up today.

USDCAD long at 1.0509 SL 1.0409 TP 1.0750

Trade has been picked up, went as high as 1.0584, about 75 pips. You could move your SL to break even or lock in 10 pips of profits. Let us see what the NY market does with our orders.

Please excuse me guys, i am taking a break tonight. Have a huge migraine and can barely open my eyes.

Levaz

Wow, good thing we stayed out of the markets - they were quite haphazard.

We will continue to stay out for the interim, as the new Finance regulation is digested by the markets. We also have the results of the bank tests coming out on Friday. So expect continued volatility.

There are large foreign currency based investments due out of Japan tonight - estimated 5 minutes past midnight EST. You can expect some movement on the Yen crosses to the upside. Try to get 30 - 50 pips and get out quickly. If it does not move much, then take whatever you got, it will happen within the first 15 - 30 minutes of the bond sales.

So these will all be long - either EURJPY, GBPJPY, CHFJPY, AUDJPY or USDJPY. If you are going to do this, pick one pair and stick to it.

We may just be observers for this week, as we have Thursday and Friday.

If you are looking for the long term EURUSD trade or the GBPUSD trade, tighten your stops, no more than 100 pip Stop loss. The current reaction to the new law may carry over into the London markets. Preferably, see if you can wait to get in when they pairs are moving back up rather than when they are moving down.

Levaz

This month has not been one of our best. We are currently around 300 pips in the hole for the month. And we have to stay out of trade for yet another day. The "stress" test results for European banks are due tomorrow. And I am not really sure how the markets will react. Will they accept the pseudo - stress at face value and cause the stocks markets to move higher or will they see the tests for what they really are (mild-discomfort tests) and punish the banking sector for yet another travesty are just bring bailed out with public funds?

I would tend to lean towards the former - i.e., they will use it to make hay while the sun is shining and blast the socks out of them when the issues re-surface in the near future.

I cannot trade on illogical biases, so I choose to stay out.

The Toshins did not make as much movement as I would have liked last night, although they did enable all the Yen crosses to bounce back very nicely. All the crosses benefited at least 100 - 200 pips from the foreign currency based bonds.

Levaz