Most of the week is gone and, the way I see it, not much has changed. Most of the currencies are still moving without much sense of direction. They react to seemingly minor news, then nothing on fairly big ones. No direction, no conviction of any kind on part of market participants. No surprise, since most people, me included, probably don’t fully grasp significance of events unfolding all around us. Or, more precisely, how to “price” them into the markets. Now, it is one thing that an average investor has problems comprehending what is happening. More disturbing is the fact that even people behind the news, principal movers and shakers, are not sure of their own actions. Case in point. Chairman Bernanke testified before Senate Budget Committee on Tuesday. Irritated lawmakers grilled him about recent FED actions. There were questions about AIG bailout, as well as other current economic actions. When asked about expected effect all the bailouts and stimulus packages will have, Chairman responding in very unconvincing way. He warned that timing and magnitude of impact of all government actions to date, is subject to “considerable uncertainty”. Considerable uncertainty? Please, Mr. Chairman, just say as it is, which should be “I don’t know. We are trying our best, but really don’t know what will happen”. That’s how I understand his convoluted answers.
One of the pairs which lost compass is GBP-CHF. I had a buy order waiting there and it was triggered.
Yesterday I went long at 1.6620. Unfortunately, price didn’t really go any where. Earlier today, Bank of England was announcing rates decision. Decided to get out and reenter if the price gets above 1.6700. Trade brought few pips, practically break even. By the way, BoE cut the rates to 0.5%, new all time low, while Eurozone lowered its benchmark to 1.5%. Order to buy at 1.6700 is valid for now.
Yen was a bright spot, it managed to stay weak for some time. Long enough for decent moves. Here I covered NZD-JPY.
Entry was at 49.30 with an objective of 100 pips. Under current conditions not a bad result. True to form, price retreated again. I took another trade here not long ago at 49.00. Target is previous high or so. Might take some time.
Hard to say what will happen tomorrow, last trading day before weekend, but I’m adding one more order.
EUR-CAD is trying to reverse, but is very timid about it. Maybe some news will push it in the right direction, that would be down. Have a sell order at 1.6002 with 200 pips target. This could be way too ambitious for current circumstances, but I’m optimistic. Just like our monetary authorities- full of hopes.
Good to see you also collected pips on yen trade. Now you are at it again. FED an co. threw everything but kitchen sink into the problem and markets just keep falling. No surprise Bernanke is very guarded in his testimony.
Mike, are going to be trading NFP report tomorrow? I’ve been receiving some emails about how easy it is to make money during this time. What do tou think?
Michelle, it is amazing how much money (borrowed money) has been spent to date. As if trying to buy our way out of this crisis. So far not much to show for it…
No, Ray, I don’t trade news, as much as possible. There’ve been a lot of these “Trade NFP” webinars floating around. I’m sceptical.
This GBP-CHF trading proves even more difficult. Think I’ll leave it alone for now and start fresh next week. It is very frustrating at the moment.
Sounds very sensible. I just have my buy order and it is very unlikely anything else will be tried in this pair.
I doubt we can put any weight into what Bernanke or other officials are saying. Time and time again public was told that the worst news were over. One must wonder if these people even know what they are talking about. Are they not supposed to be experts in matters of economy, that’s why they have such important cabinet seats? So far, it doesn’t show.
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