Trading week comes to an end on a reports that the British Pound is falling because of slower than anticipated retail sales. This applies mainly EUR-GBP, currency I have been following earlier in the week. And the week before, too. Not sure how much impact data from UK really had. In my mind Pound had been overextended in its advance, especially against the Euro. That’s why I stopped selling it. Move was overdone in particular on short term bases. By short term I mean hourly charts. Right now I see this EUR-GBP rebound as a correction within larger down move. Hard to say when it will resume, but charts might provide clues in next 1-3 weeks. By then retail sales, or something else in UK, might be better and we will have another explanation of why things happen. After the fact.
With Pound resting a little bit, Japanese Yen trades became more important and they were the best trades of the week. I have been tracking JPY against the commodity currencies, looking for break in their advance. It took some time, but the move eventually came and all of them fell. Trades in AUD-JPY and NZD-JPY were filled couple of days ago, and yesterday the downtrend accelerated. Move was sharp and directional. Relative short duration of these trades more than compensated for the long wait time.
Aussie-Yen, which was slower than Kiwi-Yen, made up the difference yesterday, after a slow start. That slow start “shook out the weak hands”, as somebody called this type of price behavior. Move was well under way yesterday at this time and few hours later it reached my objective of 81.19, for 200 pips gain.
NZD-JPY was closed in 2 stages. I took partial profits couple of days ago, when the original breakout started to slow down. That was for 90 pips. The other half of my position reached original objective of 64.45, for 200 pips profit. Not much else to add to it, other than I’d like to see these kind of trades to happen every day. Right.
Last one of the yen trades was in CAD-JPY. This one was most challenging, with Canadian Dollar remaining stronger than the other currencies. Price behaved a little differently, as described yesterday, so the trade was not the same. I passed on the original breakout and settled for later entry. That happened yesterday. Move was smaller magnitude and trade was closed at about the same time when AUD-JPY reached its target. +103 pips was the outcome here. Since than price fell to even lower, to 85.00, so more pips were possible. However, I’m perfectly content with this result.
Another trade that took some time to develop was a buy in EUR-CAD. Entry had to be adjusted, due to unfavorable moves. By that I mean price unfolded in not exactly the pattern I sought. But eventually entry was set for 1.4824, on a breakout above previous high. It was filled yesterday, and today the real move happened. Position was closed manually right before I started to write this update, and few pips short from intended target of 1.4950. Regardless, it still brought 121 pips.
Icing on the cake came late from EUR-NZD, something i mentioned at the end of last post. Didn’t have time post a snap shot. Nice breakout took place, very similar to EUR-CAD, at 1.9695. It was closed at the same time and made even more, 182 pips. This pair will probably move higher still, but I’m done for the week and will worry about it later. One more order was posted yesterday, another buy in Loonie pair, namely GBP-CAD. This trade hasn’t happened yet, although it is still valid. For now at least. Have a great weekend!
Mike K.
Hi Mike, What is your average risk/reward ratio for such trades?
Like with EURNZD you stop should have been 200 pips.
Thomas
Amazing performance!
Yes, the risk was about 200 pips, the minor low right before the reakout. Target was 300 pips, or 2.0000 level. If you go through my Friday posts in the past, you will notice that I often close trades which show nice profits, but short of target. By this time of the week I’m tired, don’t feel like trying to sqeeze every last possible pip out of it, Especially with fast moving pairs, like this one, things can change at Sunday open. I don’t like showing 200 pips or so in profit and see it evaporate on some sentiment change after the weekend. Also, had the trade been taken using daily, maybe even 4H, when the duration is expected fairly long form the start, I might have held on to it, As it was, 1H breakout, fast move, wanted to close the shop for the weekend, so I took the profits.
Alex, thank you for kind comment. Unfortunately, it isn’t always like that. Sometimes it takes days, even weeks, when my viewes actually line up with what the market is doing. That’s when days like the last couple ones come. Not very often.
The printing press was on and making money this week! Thanks for the AUD/JPY trade which I got on.
I also jumped on the EUR/AUD long I emailed you about and am still in it for about 200 pips. I am going to try my hardest to stay in this to see if it goes back to the resistance at 1.5948…but I have a habit of losing my conviction along the way. We’ll see.
Mike, great week. Yen pairs made me money, too. It was a very nice move on Thursday, couldn’t believe my eyes when it happened. Great trade selection!
It sounds good, Paul. Regarding EUR-AUD, you have another resistance at around 1.5800, minor high on daily. Once price moves above that, it could be a nice run.
Michelle, congrats!
[...] focus on one direction only. At any rate, slow week ended on very good trades, even better than the JPY transactions couple of weeks ago. Hope this keeps [...]