I'll be keeping my eye on the AUD / CHF but you really think the EUR doesn't have a lot more downside from here? This quarter I speculate the EUR could have a downside of 500+ more pips on average this quarter. GBP, CHF, USD and JPY would be good pairs to short the EUR with. I think you may have the AUD confused with the EUR, we haven't hit bottom yet it only just started on its' way down. The AUD has illustrated nothing but strength, there has been no definite signal of a reversal as of now so you might be wayyyyyy ahead of the curve. IMO of course; but I think many deep pocketed forex traders will see last week as just a confirmation of the Euros' downtrend.
Yes the eur/usd
COULD drop another 600pips down to the 1.2336 area over the next 1-2weeks,
however it could also
JUST AS EASILY rebound back up 200pips to the 1.3226 or 400pips to the 1.3365 area.
Look at the chart ive attached and you will see how mid-range eur/usd actually is,
and how wide and abrupt the swings of few hundred pips can be.
👎
But then look at the aud/chf chart..
😉
0.9886 is an extremely strong and solid resistance level which has repeatedly held for years, and is the very top of the range.
Yet there is a huge huge amount of downside potential. :whistling
The reason why aussie has been so strong over the last few months and then even the last few weeks when euro been crashing is because;
From January to end of feb when Dow rocketedup 20% the risk currencies like aussie and euro got so much stronger,
and then even whilst euro been crashing from 1.37 to 1.29 over last few weeks the reason why aussie didnt follow is because the RBA chose to keep interest rate at 3% instead of cutting to 2.75% like many people thought they would.
If they had cut to 2.75% aud/usd would of followed eur/usd to down around 1.10 instead of 1.40+.
This is extremely good for traders, as it basically means that aud has been temporarily kept artificially high for 2weeks,
thus giving us time to now get our short trades executed into the market before it starts to tank.
😎
As 3% interest rate is now fully baked and priced in, dow 20% vertical rise has priced in, bernanke printing out hundreds of trillions of dollars has ALREADY been fully and completely priced in,
and so for aussie to now rise any further from these current levels it will need some
new fresh good news.
When the 5-6% correction comes in Dow over the next few weeks, europe panics because of cyprus italy and slovenia, and some new fresh bad news comes out somewhere in asia,
money will race out of the risk currency of aussie dollar and flood into swiss franc!
Euro will also fall abit lower, however in the mean time/at anytime it could so very easily jolt around a few hundred pips to the upside over just 1-2 days of good news/hope,
wheras the potential upside for aud/chf is extremely limited!
🙂
Plus even if aud/chf does manage to rise slightly that merely allows you to get an even better average entry price by adding more sells at 1.004 level.
Im not short aud/chf yet as all my capital is currently tied-up in a short-selling Dax trade at £6.50 per point from 7,983 (target of 7,756).
But once that target level is reached im going to be looking to sell aud/chf at 0.9886 if market hasn't crashed down already by then.