AUTOREFRESH 
Trying to figure out what the main move is
Jamie, in his wrap below, has perfectly summed up the confusion that most traders are feeling. We used to call these ’summer markets’ but I don’t think that adequately describes what’s going on. The market is at a crossroads in terms of sentiment and cannot decide whether it wants to buy or sell dollars, Euros or risk.
I am going to sit in the risk-aversion camp in the short term. I was stopped out of my long EUR/JPY strategy and will leave this pair alone for a bit. USD/JPY is towards the bottom of my 92-102 medium term range so I won’t sell it. Chinas heavy manipulation of the EUR/USD market is akin to intervention and intervention distorts markets- so I’m leaving it alone. Therefore my trade is to run a small short AUD/USD position and sell more on rallies. USD/CAD has been giving us some clues after it’s very strong impulsive rally from below 1.10. I don’t trade USD/CAD but the AUD/USD should eventually play some form of catch up and fall to levels which people don’t expect around .7200.
Good luck today.
Hi Sean I been looking at short Aud as well , I have read about Cad allot as they are right over the river from here & traded the Loniee against Usd at my start , from what I understand it will at times move with the dollar as Canada is very depedent on the US, but not usually , if comodmitties collasp would not NZD be the 1 to short ? I think traders dumped the cad due to it having a lower rate of Intrest & its close ties with the Us , I obsereved today the Eur & Gbp rally aganist Usd while Cad & Aud seemed to decouple & harley move ,which I thought was weird , Gold & Oil seem to drive all 4
Hi Burt. I stopped trading the loonie many years ago because it kept borrowing my money and wouldn’t pay it back! Too hard basket. I’m hearing some decent sell orders at 7910/15 level in aud/usd so if trader stops above 7865 are triggered, that might be a good entry level. Good luck.
hi sean. good to see the cable rally all its way upto 1.6380 level. what next given right now its trading at 6320? what for the day?
You ask all the easy questions Bunty! I think overall that cable has turned mildly bearish and I prefer to sell rallies now. I would look to see if an hourly top forms around 1.6450 and sell there for a move back to the weeks low at 16000.
sean dont mind but easy questions are the most important ones. its so easy to see charts and claim this is gonna happen and that’s gonna happen. if the technical analysts were so oracular all the time, i guess all of us would be billionaires which we are not…..its just a forum where we raise questions…that’s it.
markets are the greatest teachers and nobody, NOBODY can say that this is gonna happen next….no one say that cable has turned bearish right now. we haev data today and who knows, it could climb like a cliff.
bunty – I’ve got an easy question for you. What were your reasons for going long Cable and then adding to your loss? Also, if you had the chance to get out at breakeven now, would you do this?
well, that day i was expecting better data on the job front in the states and increased risk appetite among speculators. unfortunately it didn’t materiaze. but this. i dont see the charts too much as i believe more on fundamentals.
and if i were to get out at breakeven, i woudn’t have done it as i belive its just a matter of some days before cable touches even 1.70 handle.
Well that’s fair enough reason to buy Cable given your own assumptions and expectations you have for the UK jobs data and the general market sentiment for risk appetite but fundamentals alone can not provide you with a price target. 1.70 seems to me an off the cuff figure which may or may not be met (of course) and depends equally on the other side of the equation, the USD part of your trade? How do you see that part playing out fundamentally?
Also which, if any particular strategy, fundamental or technical, is playing a larger role in the market at this moment in time?
well technical analysis if ever worked, poeple like us who are debating there on this forum would have been billionairres and not just us but many many others. when markets move, nothing works as resistances or supports or fibonacci levels, macd etc etc. markets are mostly driven by fundamentals and expectations of some fundamental factors.
and by the jobs i meant US jobs. in the past times, haven’t we seen risk sentiment rising after better data from the states? it always is fundamentals that drive the market and technical analysts like us just try to disentagle the phenomenon and try to claim most of the times that we had predicted this to happen, that to happen etc which sometimes work and most times dont.
and boss, mark my words, its just a matter of couple of better than expected data from the states and 1.70 level will not be distant.
targets never work. traders can loose money by setting targets and not squarring their positions unless that is breached. suppose i take a position in a currency and set 200 pips as my target with all my technicals done, what if the price reaches 190 pips but does not breach my level and come back another 300 pips? i will watch my profits go in horror whereby i will have lost not just 100 pips but another 200 pips as well which i did not book profit….its all psychological…its trading
Fundamentals, like technical analysis, can change very quickly. I don’t pretend to know the complete picture of what is happening in the market and instead have to rely on price action for guidance. The aim of technical analysis is simply a guide to aid entry, exit and target price levels, comparing similar historical price structures – nothing more than that – and this is how I approach trading. You see I could easily put forward a case which would against using fundamental data which would surely raise an eyebrow or two not least the factors which need to be considered when analysing fundamental data. For example: Is the source impeccable? Is it based on a sample or the whole? Have any adjustments been made? Who calculates them? How are the figures calculated? Convention, custom and practice dictate how the data is used but the results can be very different depending on the choices made. The components of GDP in official statistices are regarded as estimates. In th UK, the press releases from the NSO notes that “estimates are given to the nearest million, but cannot be regarded as accurate to this degree”. The assumptions being made here is that the method of collecting data remains consistant thereby reducing the level of error for each set of data in an effort to provide consistancy. As assumptions go, this may be a little suspect …
I’m sure that were Disraeli alive today, he’d have a field day.
Have you considered taking a little profit (say half) if price meets 50% of your target? It may be worth a try you know. Also, at the same time move your stop loss to breakeven? Control what you can as the market does the rest.