My GBP/USD Trade (26-08-2008) --- Position Squared

*Click on the images for the enlarged version.

Hello everyone,

Today [26-08-2008], I initiate a short position on the GBP/USD at the price line of 1.8473 at 10:17am (Singapore Time) | 02:17am (GMT).

So, what is the story that I see today? Well, I laid back to watch how the market behave yesterday. Yesterday's price action showed me that market wasn't able to clear above my Weekly Pivot and it formed a candle pattern they will call "Dark Cloud Cover". At the point of my entry at the mentioned price line and time, MAs are down, Stochs are down, Fast MACD is kissing downwards and Slow MACD is neutral.

My Stop Loss was on the conservative side at the price line of 1.8495(-22pips) and Target Profit at 1.8410(63pips) which is near to yesterday's low which is around the price line of 1.8404. Risk : Reward = 22 : 63 = 1 : 2.86.

When market moved in my favour and hovering around 1.8440 area, I shift my Stop Loss to Protective Stop at the price line of 1.8472(1pip).

My Target Profit was hit at 03:14pm (Singapore Time) | 07:14am (GMT), giving me 63pips profit for this trade.

Peace and trade safely everyone...

My GBP/JPY Trade (22-08-2008) --- Position Squared

*Click on the images for the enlarged version.

Hello everyone,

Today [22-08-2008], my trade on the GBP/JPY. I initiated a long position on this pair at the price line of 203.69 at 10:10am (Singapore Time) | 02:10am (GMT).

Yesterday's price action ended with a rejection and I was looking for a little breather today. So this morning, I was looking at this pair very closely. With my MAs upwards and Fast MACD on the upside and my Stochs are crossing, I initiated an open position at the mentioned price line and time.

My Stop Loss was at 203.45 (-24pips) and Target Profit at 204.50 (81pips). Risk : Reward = 24 : 8 = 1 = 3.38. My Target Profit at 204.50 is just below yeaterday's high, a good minor resistance for today :)

When market gave me around 40pips in the money, I shifted my Stop Loss to Protective Stop at the price line of 203.70 (1pip). Then I went on with my work. My Target Profit has been at at 11:21am (Singapore Time) | 03:21am (GMT), giving me 81pips profit for this trade :)

Peace and trade safely everyone...

My USD/JPY Trade (21-08-2008) --- Position Squared

*Click on the images for the enlarged version.

Greetings everyone,

Today [21-08-2008], my trade on the USD/JPY. I shorted the pair at the price line of 109.65 at 09:07am (Singapore Time) | 01:07am (GMT). From price action that happened during early morning, market has moved down and cut through my Weekly Pivot plus my MAs are down and market has also moved below my 200ma. It is unable to clear back up and hence, I shorted it at the mentioned price line and time. I played with my "Similar Wave Pattern" analysis to pre-determine possible Target Profit and upon entry, the Fast MACD is sliding down slowly and my Stochs are no where on the upside.

My Stop Loss was at 109.85 (20pips) and Target Profit at 109.10 (55pips). Risk : Reward = 20 : 55 = 1 : 2.5.

As market moved down to around 109.20 area, I shifted my Stop Loss to Protective Stop at 109.65 (0pips) and my Target Profit to 108.95 (70pips). My final shifting was when market reached around 109.05 - 109.10 area, my final shifting of Protective Stop to 109.20 (45pips) and Target Profit to 108.65 (100pips) and I went for my smoke break.

My Target Profit was hit at 02:38pm (Singapore Time) | 06:38am (GMT) while I was having my smoke break, 100pips profit for this trade :)

Peace and trade safely everyone...

My GBP/USD Trade (20-08-2008) --- Position Squared

*Click on the images for the enlarged version.

Howdy everyone,

My trade today on the GBP/USD. It has been a long wait this week due to market moving stupidly on Monday and Tuesday. Finally, I saw something that is somehow nice :)

I shorted the GBP/USD at the price line of 1.8623 at 03:05pm (Singapore Time) | 07:05am (GMT). What I saw was that, price action movements which cuts through nicely below both MAs with yesterday's high a good minor resistance and at the point of entry, my indicators were on my side. On top of that, I used a little bit of co-relation using EUR/GBP chart to counter my analysis.

My Target Profit was at 1.8540 (83pips) near to yesterday's low and Stop Loss at 1.8647 (24pips). Risk : Reward = 24 : 83 = 1 : 3.45.

I moved my Stop Loss into Protective Stop gradually with the movements of the market and after market has barely hit my Target Profit before going for a breather, my final Protective Stop shifting was around after 07:00pm (Singapore Time) | 11:00pm (GMT) which was at 1.8597 (26pips) as a conservative precaution that the stupidity movements of the market might continue. Then I went out for dinner with my wife.

I just came back from dinner and my Protective Stop was hit at 08:30pm (Singapore Time) | 12:30pm (GMT). 26pips profit for this trade :) More opportunities to come once a clear break has happened :)

Peace and trade safely everyone...

U.S. Dollar Could Rally Further As Interest Rate Expectations Move on Its Favor

Source: Daily FX

A Sudden Shift in Interest Rate Expectations has been helping the U.S. dollar

This week, several of the world’s most important central banks announced their interest rate policy. Yet, despite their different economic circumstances, they all decided to keep rates unchanged. In fact, the Federal Reserve kept rates at 2%, the ECB at 4.25%, the BoE at 5% and the RBA at 7.25%. So if there were no major surprises why the U.S. dollar rallied so much during the last two weeks?


The average daily trade volume in the foreign exchange is almost US$ 4 trillion and trying to identify the trigger behind such a sharp dollar appreciation is no easy task. Nonetheless, we think that a significant shift of interest rate expectations in favor of several interest rate hikes by the Federal Reserve has been the main driver behind the recent strength in the greenback. However, trying to judge which central banks will be more aggressive in 2008/2009 is hard to measure. In this article, we argue that interest rate expectations can be measured by using Libor rates with different maturity. Indeed, by comparing several interest rate term structures across the globe one can have a good idea on how many rate cuts or hikes different central banks have reserved for us in 2008/2009. Judging by the study we did posted below, the U.S. Federal Reserve will be one of the most aggressive central banks and we expect them to increase rates by at least 144 bps in the next 18 months. On the other hand, traders are now pricing a series of rates cuts by the Reserve Bank of New Zealand and also by the Reserve Bank of Australia which could make their currencies very vulnerable to a carry trade unwind. But Is This The Dollar Breakout?

High Inflation Could Pressure the Fed and Help the Dollar

Source: Daily FX

In order to keep up with Inflation, we expect the Fed to increase rates by almost 150 bps in the next 18 months. A higher yield could help the U.S. dollar and propel USD/JPY to 120.

This week, the release of inflation figures for several countries is likely to catch the attention of many traders. Indeed, we expect consumer prices to increase to record levels but also to be close to peaking since energy prices are significantly lower than they were in the previous month. In this article, we argue for more dollar strength in the months ahead. Currently, the U.S. dollar offers negative interest rates when adjusted by inflation and the U.S. Federal Reserve could be pressured to increase rates faster than traders had previously expected.

Why inflation matters to currency trading?
Last week, we had several central banks announcing their interest rate decision. Yet, despite their different economic circumstances they all have the same concern. In fact, despite the recent easing in the price of oil, central bankers remain concerned with inflation and second round effects of the spike in energy prices. But why inflation matters to currency trading? Inflation is one of the most important indicators used by central banks to make interest rate decisions and since yield differentials have been the main drivers behind many trends in the currency market, inflation indicators do matter for the forex trader.

Forecast for the U.S. dollar based on Real Interest Rates
Currently, the U.S. dollar offers negative real interest rates because the U.S. Federal Reserve believes there are still some down side risks to growth. In fact, the recent strength in economic activity reflects more the spending of taxes rebates than anything else. Yet, the substantial easing of monetary policy to date should help to rescue the U.S. economy from technical recession and going forward the main concern will be price stability. We expect the Federal Reserve to increase rates by 144 bps in the next 18 months and dollar strength to continue. We expect EUR/USD to trade below 1.45 in 3 months and USD/JPY above 120 in 6 months.

Singapore Dollar Gains On Greenback Weakness, Hong Kong Unemployment Falls To Decade Low

Source: Daily FX

The Singapore dollars strengthen against the dollar after hitting resistance at 1.4195, as the dollar weakened on higher oil and gold prices. The USDHKD would fall to as low as 1.4103 before finding support and consolidating at the 1.4130 price level. Expectations are growing that the MAs will intervene to slow the pace of the local dollar’s appreciation at their October meeting, as the country’s exports continue to slow. This policy action would be contrary to the recommendation of the IMF to allow further appreciation in order to battle rising inflation.

The USDHKD spent the overnight session stuck at 7.8140 as dollar weakness and a lower Hang Seng index offset each other. Meanwhile, unemployment in the country fell to a decade low of 3.2% despite the slowest growth in five months. The strong labor market has supported consumer consumption which beat expectations of 11.0% in June with a print of 11.6%. However, declining exports has slowed growth and may eventually lead to the employment deteriorating.

The economic calendar isn’t providing any event risk for the pair which will leave price action to the broader macro themes of oil and commodity prices. If oil continues to firm the ensuing dollar weakness may see both pairs trade lower throughout the day.

Global Events Calendar [18-08-2008] - [22-08-2008]

*Time displayed is based on Singapore Time (GMT+8:00).

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Global Events Calendar [18-08-2008] - [22-08-2008]
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Monday [18-08-2008]
7:01am GBP Rightmove HPI m/m
3:15pm CHF Retail Sales y/y
5:00pm EUR Trade Balance
8:30pm CAD Foreign Securities Purchases

Tuesday [19-08-2008]
1:00am USD NAHB Housing Market Index
6:45am NZD PPI Input q/q
6:45am NZD PPI Output q/q
9:30am AUD RBA Meeting Minutes
[Time Unknown] JPY Overnight Call Rate
2:00pm EUR German PPI m/m
[Time Unknown] JPY BOJ Press Conference
5:00pm EUR German ZEW Economic Sentiment
5:00pm EUR ZEW Economic Sentiment
8:30pm CAD Wholesale Sales m/m
8:30pm USD Building Permits
8:30pm USD PPI m/m
8:30pm USD Core PPI m/m
8:30pm USD Housing Starts
10:00pm USD FOMC Member Fisher Speaks

Wednesday [20-08-2008]
7:50am JPY All Industries Activity Index m/m
8:30am AUD WMI Leading Index m/m
2:00pm JPY BOJ Monthly Report
4:30pm GBP MPC Meeting Minutes
4:30pm GBP M4 Money Supply m/m
4:30pm GBP Public Sector Net Borrowing
6:00pm GBP CBI Industrial Trends Orders
8:30pm CAD Core Retail Sales m/m
8:30pm CAD Retail Sales m/m
8:30pm CAD Leading Indicators m/m
10:35pm USD Crude Oil Inventories

Thursday [21-08-2008]
6:45am NZD Visitor Arrivals m/m
7:50am JPY Trade Balance
9:30am AUD New Motor Vehicle Sales m/m
9:30am AUD RBA Bulletin
11:00am NZD Credit Card Spending y/y
2:15pm CHF Trade Balance
3:00pm EUR French Manufacturing PMI (p)
3:00pm EUR French Services PMI (p)
3:15pm CHF PPI m/m
3:30pm EUR German Manufacturing PMI (p)
3:30pm EUR German Services PMI (p)
4:00pm EUR Manufacturing PMI (p)
4:00pm EUR Services PMI (p)
4:30pm GBP Retail Sales m/m
4:30pm GBP Prelim Business Investment q/q
5:00pm CHF ZEW Expectations
7:00pm CAD Core CPI m/m
7:00pm CAD CPI m/m
8:30pm USD Unemployment Claims
10:00pm USD Philadelphia Fed Manufacturing Index
10:00pm USD Leading Index m/m
10:35pm USD Advance GDP Price Index

Friday [22-08-2008]
7:50am JPY Monetary Policy Meeting Minutes
4:00pm EUR Current Account
4:30pm GBP Revised GDP q/q
4:30pm GBP Index of Services 3m/3m
5:00pm EUR Industrial New Orders m/m
10:00pm USD Fed Chairman Bernanke Speaks
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My EUR/USD Trade (23-07-2008) --- Position Squared

Hello everyone,

First of all. I would like to apologise for not posting my trades regularly for the past few weeks. I was caught up with a lot of things. Tonight, I am going to post some of my trades, starting with this one :)



On [23-07-2008], I shorted the EUR/USD at the price line of 1.5781 at 9:05am (Singapore Time). Why I shorted this pair is because of price action. Price is dangling at support with strength to punch through it from the momentum created the previous day. To add icing on the cake, my "Advisors" are in my favour as well. Remember, I do not trade bias to my "Advisors". They are plainly my "Advisors" and not my decision maker :) Hence, I waited for a convincing price to enter.

My Stop Loss was at 1.5805 (24pips) and Target Profit at 1.5615 (166pips). Risk : Reward = 24 : 166 = 1 : 6.92.



The next day [24-07-2008], market has move in my favour. There was enough room for me to shift my stop loss and hence, I shifted my Stop Loss into Protective Stop at9:00am (Singapore Time) at the price line of 1.5760 which is 21pips in the money.



The following day [25-07-2008], market has lost a little bit of momentum and I shift my Protective Stop further at 9:05am (Singapore Time) at the price line of 1.5735 which is 46pips.



During the same day at 12:01pm (Singapore Time), I shifted my Protective Stop further to 1.5700 which is 81pips in the money, after the price action is not in my favour and my "Advisors" are indicating it is breathing.



True enough, at 12:05pm (Singapore Time) on the same day of [25-07-2008], my Protective Stop was hit and this gave me 81pips profit :)

Peace and trade safely everyone...