Aug 22 - Aug 27, 2010

We are very close to picking up this trade. Don't get too anxious and do not try to chase the market.

GBPCHF long at 1.5850 SL 1.5800 TP 1.6650

I am expecting some retraces simply based on short coverings. The logic being that EURUSD, GBPUSD, etc remained relatively steady during late Friday trading while the stock markets were falling. This means that a lot of the short sells were probably booking profits. This may give the risk-on traders a feeling l that the market has bottomed. With the Greek problems simmering and surely coming to a boil, increased bond spreads in Europe, and negative impact of the austerity measure, there is still lots of reasons to be short on the Euro.

I prefer to pick the highs around 1.2900 with a stop around 1.30 or 1.31 with the Euro.
With the GBPUSD, shorting around 1.5630 or 1.5650 with stops just above 1.57 should prove interesting. Technically, I have a buy signal on the GBPJPY which will also reflect on the GBPUSD as strength, but what we need to watch for is the recent IPO and M&A interest. That seems to be swaying the markets more than other information. I wonder if there will be enough strength to move the pair to 1.5800 where it may be a good position to short.

Here is a good trade to play on the fears of the market.
CHFJPY long at 82.58 SL 82.00 TP 88.00

This trade may take a couple of weeks or more and if we are really lucky 90 - 91 could be the final TP zone. The play is that SNB has signed off from intervention and they are sitting on USD 10 Billion of trading losses even after all the recent off loading of Euros. The current chairman is sure not to have his contract renewed, and we are looking for Verbal and even actual intervention by the BoJ which means a weaker yen. The currency that will benefit most (or lose depending on the perspective) from this is the CHF.

Levaz

CHFJPY long at 82.58 SL 82.00 TP 88.00

Order was picked up in early Asian trading.

I have also taken the following trade:

USDCAD short at 1.0500 SL 1.0700 TP 1.0000

This is a opportunist trade based on the Daily charts. The USD, after fighting back from a lower low, never seems to be able to achieve a higher high against the CAD. I am allowing a lot of room for the SL just in case the USD decides to get a bit frisky and try to test the next high at 1.0580 and then 1.0675 This should provide us with ample protection.

Levaz

CHFJPY long at 82.58 SL 82.00 TP 88.00

Stopped out for a loss of 58 pips

USDCAD short at 1.0500 SL 1.0700 TP 1.0000

So far so good, let us see how this one pans out. Expected range for tomorrow is 1.0463 - 1.0582 with a bias to the upside.

There are no new trades for today. Let us tend to the USDCAD trade.

Levaz

USDCAD short at 1.0500 SL 1.0700 TP 1.0000

We are currently at -100 pips and still alive. Expected range of 1.0544 - 1.0660. We will let the trade play out.

We expect more downside on the GBP and EUR - the only possible issue will be an actual intervention by the Japanese, either the Central bank or the Ministry of Finance. That will throw a wrench in any possible shorts.

Safety lies once again in buying CHF - so shorting the EURCHF, USDCHF and GBPCHF. There was an article by UBS that the SNB will not be intervene even at such low levels.

Levaz

USDCAD short at 1.0500 SL 1.0700 TP 1.0000

We are still hanging on to this trade.

Meanwhile, our long awaited GBPCHF trade has been picked up at 1.5850 SL 1.5800 TP 1.6600
Move the SL to break even just in case. I expect the markets to be more irrational in the near future. Watch for a possible crash as predicted by the Hindenburg Omen - now that all the conditions have been met. It is not a guarantee, but a distinct probability.

Levaz

USDCAD short at 1.0500 SL 1.0700 TP 1.0000

Well, tomorrow is make or break for this trade. There is a lot of US data releases and Bernanke speaks in the afternoon. Further QE measures are not expected as there was much dissension at the last Fed meeting. None the less, his words will move the market at least a little.

The GBPCHF trade - we did get picked and there was a substantial move to 1.6066 which gave our trade a potential of 200 pips. I only moved my Stop loss to protect about 25 pips which is where it is still sitting.

We will watch these two trades for now and let the month go by.

The active traders here may want to buy EURGBP, but ONLY AFTER the Asian session. Monday is a holiday in Britain, and they may want to take advantage of the added liquidity available tomorrow as opposed to the holiday to make their month end Euro transfers. The reason for staying out of the Asian session is that EURJPY looks ready to fall apart with possible added pressure from the EURCHF; Buying prior to these potential events may spell disaster.

Levaz