Thursday has an extremely busy scheduled for fundamental announcements. It starts with employment numbers in Australia (due shortly), followed similar report from Switzerland. Scores of other news from UK and Eurozone, culminating by policy meetings of these two central banks. Neither Bank of England nor European Central Bank are expected to change their respective benchmarks, but everybody will be watching for signs of “exit strategy” – how are they going to withdraw excess liquidity from the markets. Recently BoE came under heavy criticism for lack of a plan. Not sure why press has singled out that particular central bank, since no other one has a viable plan , either. Or if they do, implementation is questionable, at best. Bank of Japan has been working on exit for over a decade, with no end in sight.
Last couple of days brought renewed strength in Yen. Today it gained on yet another currency, the high flying Canadian Dollar. There was a question in comments to last post regarding CAD-JPY. The pair established very nice support line at 93.40, and move under that line presented very good selling opportunity. Objective wasn’t very big, one could target 45-60 pips, if hourly chart was used. With next support at 92.65, getting out before that was prudent. In my mind, at least.
Turned out to be good, fast trade, with 53 pips take. On a related subject, trade in beast, discussed yesterday, has not happened yet, but will be taken on the next move down, if it happens. Couple of currencies still resist Yen advance. These are Aussie and Kiwi. Should JPY keep strengthening, they are likely to crack, too. At least to some degree. Here is how AUD-JPY looks like right now.
This pair is showing a possible reversal, with a pivot point at just above 86.00. Formation is relatively large and loose, so it might take some time (2-3 days?) for it to complete. But anybody wanting to sell AUD-JPY should watch this support. Kiwi-Yen, hourly chart, looks very similar, and also could drop if its support is broken.
Canadian Dollar showed some weakness today. Hard to say if it is just a pause, or beginning of good size correction. Recent advance was probably a little overdone. Even this chart, 1H EUR-CAD shows almost 400 pips move in just 3 days. Price action suggests possible reversal. Not that Euro has best chances of gaining on the Loonie – other currencies are stronger, but this chart could provide predictable entry point for a buy, should the reversal pattern keep building. 100 pips or so should be the target. More about Canadian Dollar in next post.
Mike K.
Your Yen trades have been very good. Keep’em coming! Just kidding. Thanks!
Hi Mike. Long time since I stopped by here. Did’nt trade for a while. Back to it now, though. Have you changed your mind about writing trading manual or opening some kind of mentorship program? I’d be very interested.
Thanks, GR.
Walter, I’ll send you email shortly.
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