So there I was with an empty beer and a two day old USD/JPY short I’d almost lost hope on when out of the blue my friend emailed me this article from Bloomberg. Apparently supermodel Gisele Bundchen prefers to be paid in Euros for pitching Pantene and Dolce & Gabbana products!

So the way I see it, if Buffet and Bundchen are both dumping dollars perhaps there is hope for my USD/JPY short after all! Them-Thar’s some fundamentals for ya!

All I know is that my trade is now in the money after coming within 5 pips of my stop order and my beloved Dallas Stars stomped the Ducks 5 – 0 last night.

I think this is going to be a great week!

Side note; being against the carry is expensive when the interest difference is 4%. Don’t try this at home boys and girls unless you really, really mean it.

It’s time for some executive decisions on the USD/JPY sell from my October 21st entry. If you’re trading multiple lots I recommend you take some profit now and move your stop order to break even. If you’re trading one lot, at least move your stop to break even or seriously consider taking some profit.

The market has failed to make a new low over the last 5 days and we are nudged up against daily chart support now.

I know the “risk-to-reward” ratio is skewed but no one has ever gone broke taking a profit.

-Ryan

Today was one of those trading days I’d like to take a mulligan. Good news is my analysis for EUR/USD and USD/CAD was spot on, bad news is I was unable to make a good entry and ended up missing both trades! I hope you were able to sell some dollars today because the “Loonie Locomotive” took us on a 100+ pip ride yet again!

The reason I missed today’s trades was due to my strict money management limits. I use chart based stops and I only risk 2% of my funds at any given time which means if I can’t find a logical place on the chart (where price hasn’t been) to place my protective stop order within a 2% risk tolerance I don’t take the trade. By the time I got up this morning (and I got up early) the market had moved beyond my comfort range so I stayed on the sidelines.

While this practice keeps me out of some good trades it also keeps me from marrying a trade in progress and trading for the sake of “being right”. While it can be frustrating to watch a huge profit slip away from you, it is far more important to protect your capital and be ready for the next trade when the risk ratios work out in your favor.

Looking Forward

I’m not terribly excited about Wednesday’s market overall, in my opinion there just aren’t many good S/R setups but EUR has a handful of economic events that might get it moving overnight. I think it is interesting EUR/USD failed to mount the $1.4280 high set back on September 27th, watch the lower trend line around $1.4190ish, I’ll have more thoughts on that later.

GBP/USD may need to test support around $2.0440ish before moving higher but I’m not terribly thrilled with the idea.

Overall it is a wait and see game in my opinion…

Best of Luck,
Ryan

Photo Credit bgilliard

Following the nice dollar rally this morning markets are quite and I’m still stalking the CAD sell I talked about yesterday. I believe Loonie is positioned nicely this evening to give up the sell we are looking for in the morning following the Canadian Retail Sales report but only time will tell. Overall we are looking at one technical and two fundamental reasons to sell dollar tomorrow:

1. Oil looks poised to make another run at $90.
2. CAD Retail sales are expected to be .3% over -.3% (less autos).
3. You’d be awfully dense to buy dollar against the “Loonie Locomotive” downtrend near the top of a stubborn channel.

I’ve included my current CAD chart as well as today’s intraday Light Sweet Crude chart for your own eyes…

Where To Get Long EUR Again?

I’m also watching EUR/USD tonight. I’d like to get long EUR again but finding the right price is the hard part. There are a number of reports due out overnight for the Euro but nothing that is expected to be a big deal. I’d like to try and buy a dip into the trend line and fibbonacci retracement to buy a purley technical play, somewhere around $1.4140.

Best of luck!

-Ryan

Dollar didn’t get any help from the G7 summit over the weekend, I think this quote from FT.com sums it up nicely:

”The G7’s statement effectively gives a green light to continue selling the dollar,” Michael Woolfolk, senior currency strategist at the Bank of New York Mellon

Many trading opportunities as a result will continue to be on the cross pairs with EUR and GBP against JPY but USD/JPY had an opportunity to find support along a daily chart trend line and blew though it during early trading tonight. This may open a potential short trade opportunity if the market tests and fails to mount the trend line during European trading. I’d like to sell the pair in the $114.80 / $115.20 range if it prints a bearish test overnight.

For channel trading, my pick is the USD/CAD, the pair is stuck in a nice downtrend channel and is behaving properly at the bottom range of the channel. I’m waiting to sell the pair again at the top of the channel, somewhere in the $0.9760 / $0.9790 range depending on how long it takes the pair to get back up. Canadian Retail Sales and Oil will be key to watch this week when planning this trade.

Best of luck…

-RO