Chief Bernanke is speaking before the House Financial Services Committee. Well, more like reading a prepared statement. There was interesting nugget in it, one about possibly raising interest rates. The Fed may hike the discount rate “before long” as part of the “normalization” of Fed lending. Sounds promising, doesn’t it? Unfortunately, few sentences later we learned that  low rates are still warranted “for an extended period”. So which one is it- are we good for now or will things get changed soon? “Before long” can be as easily measured in days as in years. Great statement, full of ambiguity and inconsistencies. Well done.

Everybody is talking about Greece again, theme that will likely stay with us for the rest of the week at least. There are even some mentions about that country opting out of Euro. While it seems hard to believe, it is not without a precedent. One has to remember that Denmark initially accepted EUR as its currency, only to return to DKK couple of years later. This currency is very closely correlated to the Euro. Possible resuraction of Drachma is not out of the question, but likelihood of that happening is extremely low and nothing more that speculation at the moment.

I’ve been looking at AUD-JPY cross since the weekend. It has rebounded from levels of Thursday and Friday and kept on moving up today, but in less decisive way. Yesterday I wrote that my intention was to use it as a guide for other Yen pairs, without taking a trade in this cross itself. About the time update was posted, AUD-JPY poked through the high of 78.65 and retraced. Movement resumed couple of hours later and that provided a signal to go long with other pairs. Turned out there was no lag at all in NZD-JPY, so no trade there. I bought CAD-JPY at 84.31.

Price fell to about 100SMA and started to reverse, but I got out there for a loss of 36 pips, at just about the worst possible time. Another run on 100 SMA happened and I decided to go long at this time, with entry at 83.75. This trade has an objective of 84.50 and it was just met, while I’m writing this. Looks like Canadian Dollar is the strongest acting of these pairs. At this moment I don’t plan any more trades here, until at least later part of Asian session. Not sure about direction and need to see more price history.

Another cross discussed before was GBP-CAD. Price established a high at 1.6800, something I had been looking for, but it was down from there, without much of a pause. Even when the value fell under 1.6700, Pound looked weak everywhere else and didn’t give any reason to go long. Currently the low of 1.6620 is being tested, and could be a good place to buy if reversal emerges. But to be frank, I’m not holding my breath. Overall a lame day.

Mike K.