Certainly at the top of the news today is the first BRIC summit bring held in Russia. For those who don’t know, BRIC is an acronym standing for Brazil, Russia, India, China, the leading emerging markets. This group, for the lack of better world, since it really is not an organization yet, is supposed to represent most of emerging economies, so we can expect it to grow. If that indeed happens, current acronym could change to something more permanent and reflective of other members. Aside from being the most important of emerging markets, they also happen to be huge holders of US Dollars, in form of treasuries, hence my interest in this meeting.
Everybody expected that the subject of reserve currency would be on the agenda and any official statement was eagerly awaited. Especially after somewhat surprising disclosure from Russian Finance Minister over the weekend, commenting on their confidence in the dollar. I mentioned in US Dollar and Russia, that this story would change soon. Didn’t have to wait long. Russian President, Dimitry Medvedev, called for changes in the international monetary system, not only through the consolidation of the dollar but the creation of new reserve currencies. Once again, Russia is sending conflicting signals in this matter.
Other official releases were more general and urged for reforms of global financial institutions to reflect changes in world economy and support for a more democratic and just “multipolar” world order. I’m sure we’ll hear more from BRIC in the future, perhaps under different name. As well as more “multipolar” news releases from Russia about the reserve currency and US Dollar.
I can’t be overly critical of Russia ( have great memories from my travels there), since I change my mind all the time, too. At least “adjust” my decisions. Trade from yesterday is a good example.
I was waiting for a small bounce on 4H CAD-JPY chart at around 86.00. That time frame didn’t produce that, but there was a reaction at this level on hourly chart. It wasn’t big, but it did provide an entry at 85.90. This of course meant that profit target was changed, from 200 pips to 100 pips. Few hours later market just missed it an I got out 85.06 or 84 pips. Higher magnitude chart of this pair, 4H, doesn’t look good to me any more, but I’m willing to try this one (1H) again. Looks like the price is going to paint a temporary bottom here for a few hours, at which time new sell order could be placed just under it. Currently it appears to be 84.70-75 zone, with 120 pips objective.
Other trade from yesterday was also a sell, in NZD-CHF.
Price triggered the order, than reversed and pulled back again. I decided to close it about an hour ago for 23 pips loss. I’m leaving it alone for now and moving on. To another one of Yen pairs.
Yen has stalled after yesterday’s advance, but intermediate term charts, 4H, suggests another leg down. Since AUD-JPY is acting weak, I will try to sell it. Two separate sell orders are placed, one under the support level, 75.90, with an objective of 250 pips. Second order is positioned at 79.00. If the price makes it that high. This would give a very nice risk/reward scenario. Here I intend to stick to 4H chart, shorter term action can be found elsewhere. Plenty of it.
Mike K.
This is a lot of shorting Yen pairs. Most i’ve seen you do, I think. Do you expect prolonged down trend?
No Andy, not very long. Just one more strong push down. After that, we’ll have “listen” to the charts.
I’m not sure why anybody bothers with anything Russians are saying. Sometimes it appears they do everything they can create uncertainty and confusion in markets. Must be to their benefit.
For AUD-JPY you are expecting large price moves. How long do you think it will take? You probably have a time frame in mind.
I think you are right, Renata. They always seem to have some hidden agenda, only who knows what?
Maxim, maybe as long as a week, since intermediate term chart is used, hopefully sooner. Also, fairly big drawdowns are possible. We’ll see.
The BRIC countries are swinging a big stick at the moment. I hope they are not forgetting one fundamental thing- somebody must buy stuff from them, or the stick gets much smaller. They shouldn’t get too full of themselves.
This is a great observation, Alex.
[...] back to things I know a little more about. Yesterday couple of trades in Japanese Yen were covered. One was a longer term, sell of AUD-JPY using 4H chart. This trade is live and will [...]
Mike,
I’m very interested in trading bric currencies but am having a difficult time in finding brokers that actually offer them. I am aware of the fact that they are not fully free traded. Any ideas as to who might offer them???
Thanks
Sergio.
I don’t know of anybody who offers all of them on retail platform, but OANDA offers CNY and INR, Saxobank offers RUB to retail traders but I think that BRL is only for institutions. FXpro also has RUB. These are the brokers I have personal experience with. GFT is another broker you might want to look at, but I don’t remember exactly what they have. It’s been a while since I traded with them. CMC used to have them all, but they closed their US office, and offerings very from country to country.
thank you.
[...] take some time, given my lofty goal. Currently other trades are a little more important, including AUD-JPY sell. This trade is proving to be a difficult one. Entry happened as planned at 75.90, but that is also [...]
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