Close Trade: 2008-11-04 10:40
Greetings! With the US elections wrapping up, bringing a bit more certainty to the environment, and a continued reduction in interbank borrowing has brought a bit of risk appetite back to the markets. It seems sentiment is shifting, changing my view, so I’d like to cut my losses here.
Close trade at market (99.75)
Total: -125 pips/ -0.625% loss
So, a small loss, but from here we may see continued risk appetite push carry trades and higher yielding currencies higher. This may lead into an opportunity to short into the upcoming rate decisions, but that’s for another post to discuss. Stay tuned!
Trade Update: 2008-11-03 17:20
Shortly after I posted my trade idea, USD/JPY rallied higher during the Asian session on a return of risk appetite and triggered my short entry orders at 98.50 along the way. It didn’t stop there though, but fortunately it found enough sellers to push it back down around 99.00. It looks like it’ll hang around this area for a bit, especially as we head into the US Presidential election tomorrow. Afterwards, focus will return to the economy and the credit markets, and if we continue to see a drop in interbank borrowing costs, this may further risk appetites.
Trade Idea: 2008-11-02 18:05
Another simple setup using trendlines. The pair is still in a downtrend and after hitting lows around 91, the pair has retraced back up to a previous support area and falling trendline. It looks like the retracement has run out of steam (as indicated by stochastics), and the bulls and bears have decided to battle it out here as the pair consolidates. The sellers may win this battle out at the resistance areas and we may see a return to the overall downtrend. I am going to short in this area.
Stay tuned for updates and adjustments!