This weekend group of G-7 countries met in Istanbul, Turkey, to discuss global trade and economics. This comes after the recent G-20 meeting in Pittsburgh. Looks like the good old boys decided to keep their original private club alive, even after expending to include few more countries like China, India and Russia. After the Pittsburgh summit, one could have though that G-20 is the new world order. Turns out no exactly. The G-7, comprising Britain, Canada, France, Germany, Italy, Japan and the United States, still wants to play itself, even if there are few more big boys on the block now.

Interestingly enough, according to participants, currencies were on the agenda this time. Meeting statement called for China to boost its tightly controlled currency in order to help correct imbalances in global trade. Some claim that, among others, that was one of the main reason for world wide financial crisis. China is accused once again of pegging Yuan to the Dollar. In response, they claim to support stability through their conservative policies. I’m sure we’ll read more about in months to come. What is perhaps more interesting, some of the group members also expressed concern(complained) about weak dollar. Unnamed source said USD was subject of “heated discussion”. How will FED respond? Probably by printing few more trillion of green bucks.

Time to update the Price action trades. Yes, one of the orders has been triggered and a trade is under way right now. EUR-NZD had one more adjustment to its buy order. I moved it a little lower one more time, to 2.0315, ways down from the original level of 2.0932. That’s how price developed, I was simply adjusting to it

This minor high, at which I entered was not ideal. Normally I look for an extreme which, for high, has 3 or more lower candles on both sides. This one has only 2. What it did, was to lower my risks. Current stop is 2.0080. Had I used the more dominant high for entry, 20440, risks would be higher. So I settled for this high. No objective is set here, trade will be live until most recent low is violated. This means my stop/loss order will keep moving higher. Speaking of S/L, the other potential order from original post present new set of challenges.

Latest sell off was so severe, that most immediate preceding high is at above 150. I have a buy order there. However, this would create a 1000 pips initial risk, something I don’t really want to take. What is needed right now, is for the price to make another low under 140. Should this happen, buy order would migrate to about 145. This set up is at limbo at the moment. Shorter time frames will likely present better opportunities.

I will be looking for a Sunday set up, after the open.  Not all of Yen pairs look like suitable candidates, but CAD-JPY does. It shows first characteristic requiered by the strategy- strong price move on Friday and a close near the day’s extreme. Now we need to see continuation and well defined reversal pattern few hours into the trading day. As always on Sunday, opening gaps are a possibility, so I’m on a lookout for them as well.

Mike K.