January 2004 - Forex

[rezo_s]

January 2004

Hello Everyone,

Good to be back. Hope you all had a great holiday season.
But now its time to get back to work.

Greenback was dropped down to even lower levels on thin market conditions. I cannot say it is overdone, but consolidation is not out of question right at the start. No matter what, it is dangerous to buy USD now. Lets wait and seek for further opportunities to sell it. At the moment I see 2 good markets: USDCAD and GBPJPY. I will post comments and charts on those later, but first ( of course), couple words on most wanted Euro/$ pair.

Well, actually it will be literally couple words, as there is not much to be said. All we see is the going on strengthening of the single currency, which for now meets no top, and no one can predict where this or any other top will be. I think at the moment I can talk only about possible initial support areas in case of a trend line break (same old trend line from November). If we look at the chart, we see initially 2 major levels: 1.23 and 1.21. These are levels where renewed buying may be seen.
I am not saying we should sell for 1,23. All I say is in case we turn south, where I see the possible support coming from. We may as well see no correction/consolidation or trend line break. For now, I don't see Euro as a definite buy. I will watch it for a day or 2. as I said, I am looking at USDCAD and GBPJPY at the moment. See next post.

Good Luck now,

 

[rezo_s]

If we look at the weekly chart, there is no doubt on where was it going till now and the way! it was going. A whole year of one way game. Most chances such a strong trend (sentiment on the market) not to disappear too soon, so we have a good possibility to catch USD weakening here

 

[rezo_s]

On daily chart we see the consolidation we had in the end of the year, and now with renewed strength, bears are pressing the price lower. As it can be observed, the consolidation (flat) area was broken at 1.2950/70 area, and now we should see acceleration of the move. I may use any move towards the break area to enter a short position here. I don't like to talk about levels, therefore I am only saying it is a possible entry area. I may as well enter lower, or not enter at all. I will post once/if I enter.

 

[rezo_s]

Now if we look at the 60 min chart, we see that there is a possibility for double top to be formed in that very 1.2950/70 area we saw on the daily chart.
This is yet another reason to concentrate our view on that level.

To sum up: lets look for slight correction to take place (lets hope), and if it gets to 1.2950/70 level, sell MAY be considered. Sell may also be considered at lower levels, depending on market conditions. As I said, I will post the moment I enter (if I do). I will use 50-70 pps stop (moving to b/e after 40). Initial target is seen at 1.2750 (see 10 year historical levels).

I mentioned GBPJPY earlier, but I will leave it myself (don't have time to post comments and charts at the moment - some other time).

Have a Good Day, week and year everybody,

Kind Regards,

Rezo Shmertz

 

[Dow Dog]

I know nothing about currency trading and this may be a dumb question.

Do you think the current weakness of the US Dollar is part of the overall cycle or is it something a little more permanent ?

Are we likely to see 1.40 to the GBP again or parity or better against the Euro ?

 

[rezo_s]

Hello Dow Dog,

Well, I really couldn't say. And I don't think anyone could for sure. All I do is trade what I see at the moment and what I see in the period of projected trade. Not more, not less.
But generally speaking, it would take at least several months for USD to show good gains in order to start speaking about USD starting to recover. Anything above the physiological 1.20 on Euro is for now chance towards 1.30 and more. Trend is strong enough for now, and we can only talk about corrections, and nothing more than corrections on the main road of USD getting weaker.
As for my perspective - GBP looks ever better than Euro, and I think it is aiming for 2.0000 this year, but its still fairly far away, so ... lets trade what we have now

Kind Regards,

Rezo

 

[mully]

Dollar bottom-idle thoughts

I thought I would stir up some reaction.
I have been watching the falling dollar exaggerating
all the dollar based indicies, commodities etc and wondering where it might all end. Using the BoE effective series,
I came up with the following analysis.
Fall from January 2002 has been quite orderly
with both down moves knocking 14.4 and 14.8 points of the effective rate respectively
with both rallies only adding 5.2 points to the rates.
If the dollar bear moves has any symmetry,
for this current down move from August,
then a level around 91.5 BoE may be interesting.
For the real bears out there the 1995 low
on the dollar BoE index was 86.8.

 

[rezo_s]

Sell USDCAD now @1.2861 with stop at 1.2935 with half covering at initial target 1.2730 and holdinig the rest for the 1.2650.

Good Luck!

 

[rezo_s]

and as I mentioned in the original post about this trade, move stop to breakeven after +40

 

[Austin&Liz]

IB Symbols

Hi

We're just starting to look at Forex for intraday trading. Does anyone know what the IB symbols are for USDCAD & GBPJPY currency pairs.

Thanks

A&L

 

[rezo_s]

Sorry, I cannot help you

 

[JonnyT]

Forget using futures via IB for the quoted pairs, they are illiquid.

Even the GPB/USD can be problematic with futures.

SBs are actually better for these pairs.

JonnyT

 

[Austin&Liz]

Thanks JonnyT

We're trying to get away from SB but we still have an account with D4F - we'll try the currency pairs with them.

Cheers

A&L

 

[rezo_s]

Hi Everyone,

Still holding the short USDCAD trade. Price currently is at 1.2900, stop was almost hit today, but now we are slightly lower. Market seems to be coming out of the holiday season and we are trying to decide whether all the rally over the holidays at thin market conditions was justified or overdone. Of course, USD seems to be oversold, but it seems to be oversold for over a month now - maybe even more. Therefore we cannot base our judgment on oversold/bought situation - sentiment was/is? too strong.
As always, best way (for me) is to look at charts and try to see what can be read there. Lets take Euro as always for the start. and what we see it that very trend line which is still holding (staring from bounce @1.1375 on that second November Friday). Here is the 240 min chart where the trend line is tracked from best. And here we are again trying to break that very line.

 

[rezo_s]

As we see, we are very close to the trend line which was holding the Euro to correct below it for 2 months now. Will it hold once again? well, on the one hand, we can say that it was supporting the trend long enough, and there are good chances to break the line, but on the other hand, the longer the line holds, the stronger support it is considered to provide.
Yes, situation is kind of mixed up, and that is the reason why I didn't trade it and will not trade it for now. I traded cable today with _50 pips, and several moneytec members were in chat room which Enternal Future (Andre) set up on yahoo groups when I executed the trade - those knew about the trade. So basically what I am saying is that Euro is not the best choice (at least for me) at the moment. And the reason is very simple - look at the previous day candle - its a "white shooting star". We should have expected at least correction today, and that is indeed what we saw. Given the candle, I prefer avoiding the Euro and wait to see what happens next. The fact remains that Euro lost more value today than other currencies. lets keep that in mind.

 

[rezo_s]

Here's the candle on daily chart.

 

[rezo_s]

The open trade: short USDCAD

well, I wrote too much about the Euro, and now I am tired to say anything about the current open position. Couple words - as we can see, its on the trend line on 240 mins now, and same here - if we break upside, not only my stop will be taken out, but we also have a situation for further appreciation - just as it is on Euro.

Good Luck Everyone,

Rezo

 

[rezo_s]

Hi Everyone,

Ok, the canadian trade was stopped out with 74 pips loss.

I entered a position, but its late now to post about is...

see you all later, and good luck!

 

[darktone]

hello rezo
good holiday?

E/$ busted trend + support! for now

 

[rezo_s]

Hello dt,

yes, thank you, the holiday was great. happy new year mate!

Well, actually I dont like euro that much - and I explained the reason, but cable it good - I took 50 pps on it yesterday, and entered now at 1.8126 again. Sure euro may appriciate as well, but techniclly cable looks much stronger at the moment.

Good Luck!