Everybody is following news from China, expecting something regarding the currency issue to be announced. Either Obama pushing for increased releasing Yuan from chains, or hosts making some concessions on their own. So far nothing. Looks like the vague appreciation promises from last week is all there is to it. For now. Meanwhile Canadian Prime Minister, Stephen Harper, said the central bank has been clear in warning that the Canadian dollar should not appreciate too quickly. Bank of Canada ” is very clear that the dollar should not be rising above its genuine value.” What is genuine value? Some clarity please. This saber rattling has been going on for some time, and I wonder if I’m the only person even following it, with everybody else just ignoring what BoC says altogether.  

As indicated yesterday, I was watching Kiwi pairs opening closely. Once again we had gaps here and there, but they were much slower than a week before. Normally I wouldn’t consider them as viable candidates for trading, but decided to give NZD-JPY a try. The opening was too small for my normal trade, but presented decent chance for fading the gap.  Doing it put trade in the direction I wanted, not because there was something special about the situation itself. Well, wrong. Risks were small and clearly defined about 25 pips, while objective was 60 pips, so the set up was worth the play.

My entry happened to be at 66.58 with a target at 66.00 for this part of the move, right to previous support. Move was fast, relatively speaking, but it ended just as sharply. price snapped right back up and I decided to close it with minor gains, 12 pips. Just doesn’t want to go down. I’ll be on the lookout for more sell opportunities, same with other NZD pairs. This will be discussed more in days ahead.

Back to the Canadian Dollar. I don’t know if BoC statements carry any weight any more, they just keep repeating same thing over and over, but CAD looks poised for weakness now. I’m trying it out with a long GBP-CAD at 1.7491, just above 100 SMA, where price found support. I’d like to see it move to next resistance at just above 1.76, pocket 100 pips and wait for next breakout at 1.7620 and try to get another 100 pips out of it.

Development in EUR-CAD is less convincing, but support seems to be holding. Price is still close to it which provides for small risks here. Creation of reversal formation gives me long entry at 1.5631. For right now I only want to see 1.5695-1.5700, since entire set up is so much different than GBP-CAD.  As this is written, Pound is surging strongly, so, with any luck, my first target will be reached soon.

Mike K.