The beast, GBP-JPY, has been receiving frequent mention on these pages, so it is only fitting I also note this. This pair has just suffered an ultimate ignominy, an all time low. Price reached as low as 125.20, but it is likely to deepen it by the time this post is written. Pound fell hard, as the details of British bailout plan were digested. I’m the first one to admit that I didn’t see it coming. My expectations were to see a little back and forth around the low, but ultimately thought it would hold. Fortunately for me, I withheld from trading Pound crosses, wanting to see how this really big piece of fundamental news plays out, as noted here couple of days ago. Food for thought: USD has been getting stronger on all bailout initiatives, while Pound is getting pummeled on these same kind of news. Go figure. That’s why I don’t trade fundamentals. More on the Pound later.
Big event today, Presidential inauguration. As important as it might be , I didn’t watch it, too busy staring at the charts. Lady friend of mine called me about an hour ago.
“Are you watching the inauguration?”
“No, I’m busy”.
“With what? How can you you miss this?”
“I’m watching Aussie-Swissy bounce all over the chart.”
“What? You are not making any sense. Are you drunk or something?”
“No, why?”
Might as well live on another planet.
Here is the bouncing Aussie-Swissy.
Turned out to be much more trading than anticipated. After entry at 0.7625, price fell to just under 0.7500. I put Fib tool over the previous up swing. 0.7500 happens to be right at 0.62 retracement, as well as sitting on 100SMA, which I often use as support/resistance. Confluence of factors which made me open another trade of the same size at 0.7502. Price ran up to latest high but failed to penetrate. I closed both positions at 0.7611, one for minor loss, the second for OK gain. Also, I’m leaving another buy order at 0.7645 and wait now. Quite a work out with not much to show for.
Yen is on this never ending run. Just like last, week I will start trailing latest highs with buy orders, but couple of test trades must be done first.
One of them could be here, in NZD-JPY.
Nod that Kiwi is strong, just the opposite. But is right at a level of last low. I want to see a bullish hourly candle first, before any trade takes place. When and if this happens, parameters will depend on how the chart looks like. It might be time to start planning some GBP long trades, but charts have to become more zig-zag, not a straight line down, like they are now.
Mike K.
You know, Mike, if you keep talking to lady-friends like that, you might not have any left. Most of them wouldn’t call again. Pretty funny, I must say.
I’ll take it under consideration.
Good work avoiding the queen. Everybody is confused by reaction to fundies. You have good sense, mate.
This new low in GBP-JPY, do you think it will get even lower? The few people I know who trade, the were talking about a carry trade few days ago, but they are silent today. Think they took big losses.
Alex, I don’t know about the sense. Didn’t understand it so I stayed out. Probably time to start playing it again.
Heather, this is an uncharted territory. I’ll try to cover it in next post, bot most likely it will not go much lower.