I think it's time to own the pound...
Dear Friends/Fellow Traders,
The Yen experienced a sudden surge of buying interest in the past two days, strengthening against the USD, EUR, GBP, AUD, NZD, etc.... the reason is because the market also thinks that the Japanese Yen is undervalued, and is due for a reversal. Russian Central Banks have been diversifying into more Japanese Yen for its forex reserves, and big names have been repositioning their short Yen positions.
However, we're always getting mixed signals in the foreign exchange markets because of sudden macroeconomic events that totally shoot down the technicals. North Korea just told China yesterday that they're going to continue to conduct their nuclear tests, so this might be a little troublesome for the Yen. I suggest that you do not take any positions that involve the Yen at the moment and wait to see how the market plays out to North Korea.
On the other side of the Asia-Europe land mass is British Pound, and its performance in the past week has been nothing short of amazing. They have been gaining ground against all of the other currencies. However, the weaker-than-expected unemployment numbers and wage gains weighed on the pound and it traded down below 1.8700 from mid-1.8700's yesterday afternoon. There is risk that the pound may slip further against the dollar and other currencies but it's finding good support and should take more than these weak numbers to break lower.
Having said that, I entered a long GBP position against the Dollar this morning at a relative discount just above the 1.8660 resistance which has been holding up relatively well. My stop is just below that at 1.8645 and should my positions stop out I would only have lost around 25 pips (A very good risk-to-reward ratio on this trade). The GBP is also gaining against the other currencies and this temporary sell-off of the GBP should provide good entry points for those who are looking to go long the GBP.
Stay tuned!
To successful trading,
Dickens
The Yen experienced a sudden surge of buying interest in the past two days, strengthening against the USD, EUR, GBP, AUD, NZD, etc.... the reason is because the market also thinks that the Japanese Yen is undervalued, and is due for a reversal. Russian Central Banks have been diversifying into more Japanese Yen for its forex reserves, and big names have been repositioning their short Yen positions.
However, we're always getting mixed signals in the foreign exchange markets because of sudden macroeconomic events that totally shoot down the technicals. North Korea just told China yesterday that they're going to continue to conduct their nuclear tests, so this might be a little troublesome for the Yen. I suggest that you do not take any positions that involve the Yen at the moment and wait to see how the market plays out to North Korea.
On the other side of the Asia-Europe land mass is British Pound, and its performance in the past week has been nothing short of amazing. They have been gaining ground against all of the other currencies. However, the weaker-than-expected unemployment numbers and wage gains weighed on the pound and it traded down below 1.8700 from mid-1.8700's yesterday afternoon. There is risk that the pound may slip further against the dollar and other currencies but it's finding good support and should take more than these weak numbers to break lower.
Having said that, I entered a long GBP position against the Dollar this morning at a relative discount just above the 1.8660 resistance which has been holding up relatively well. My stop is just below that at 1.8645 and should my positions stop out I would only have lost around 25 pips (A very good risk-to-reward ratio on this trade). The GBP is also gaining against the other currencies and this temporary sell-off of the GBP should provide good entry points for those who are looking to go long the GBP.
Stay tuned!
To successful trading,
Dickens
posted by ForexDragon at 6:45 PM
0 Comments:
Post a Comment
<< Home