Russian Central Bank made an announcement regarding Canadian Dollar. It had started buying the Loonie and securities in a bid to diversify its foreign exchange reserves. Russia’s foreign exchange reserves, believed to be the world’s third largest, stood at $439 billion at the end of December. According to some reports, these assets have been split between USD and the Euro, although the exact make up is not known, typical of central banks.
This is at least the third time that such comment has been made. The first one was in late November, followed by another in December. It means they probably already acquired the amount they wanted. Otherwise, why would they “talk an asset up” before getting into it? Sure, they might have some regulatory disclosure requirements, but, after all, it is Russia we are talking about. Who cares about subtleties like that? There could always be some political motivations behind statement of this sort, a jab at the Dollar, but from a business point of view it would make great deal of sense to diversify into CAD and AUD. This applies to all central banks.
Canadian Dollar news come at a time when I have been focused on this currency heavily, along with the AUD and NZD. As mentioned in last, long post, CAD-JPY and GBP-CAD were very much of great interest to me. Intermediate term charts were approaching important resistance/support levels. But unlike other crosses, covered earlier in the week, these pairs also presented nice, if smaller, trading opportunities, within those larger swings. Here is GBP-CAD, with this broker it happens to be 3H chart, rather then the customary 4H, but end result is similar enough.
Nice buy set happened yesterday, with an entry at 1.6926. It had target at 1.7030, below the resistance. Once it was reached, for +104 pips, I waited to the price to establish minor top roughly at the level of past resistance. Price pulled back, and new buy order has been placed. If filled, objective will be 200 pips.
CAD-JPY was not falling as fast as AUD-JPY or NZD-JPY, but general direction was the same. An earlier sell set up happened, which produced +65 pips. By the time price reached major support, the other trades have been under way and it was close to the end of trading day. I decided to wait here for next support point, after which next sell order was placed. I think it was triggered just now, as off this writing.
In the next post I’ll cover all the trades that are still pending or under way, quite a few of them. BTW, anybody watching EUR-NZD approaching 1.9700? Good trading to all!
Mike K.
Mike,
I don’t know if it’s just me, but I can’t click on your charts to enlarge it. Maybe it’s my firewall…
Try it now. Should be OK….
No updates about EUR-GBP. Are are not taking any more trades now?
Great job with with jpy pairs! Nice moves. Question, though, are you still holding on to cad/jpy, or will be getting out soon?
Jason, I closed it couple hours ago. I think these moves have had it for now, maybe some correction? At any rate, done with JPY trades for this week. I’ll post it in next update.
Andy, I’ll return to EUR-GBP if I see an opportunity. Right now, I don’t.
Hi Mike, Do you leave GBP-CAD order open over the weekend (gaps)? Thomas
Good point, Thomas. I was about to cover it on Sunday, before opening. In itself, set up is still valid. However, since the price close near the intended entry, I will suspend it and watch the open. Volatility is relatively high, gaps are likely, so it will depend on how it opens. This, of course, has the risk that trade will be missed, but I’m willing to take it. More on Sunday.
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[...] that the central bank of Russia talked about including the Loonie in their portfolio. In fact, they’ve discussing it for at least two years now, and, as we can see, this phase of the operation is still in “discussion” stage. Same [...]
[...] time that the central bank of Russia talked about including the Loonie in their portfolio. In fact, they’ve discussing it for at least two years now, and, as we can see, this phase of the operation is still in “discussion” stage. Same for the [...]
[...] This is not the first time that the central bank of Russia talked about including the Loonie in their portfolio. In fact, they’ve discussing it for at least two years now, [...]