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Last week we did not issue a weekly update but instead released a trade alert in GBPJPY, which we were able to exit with a profit. Our USDCNH trade is holding a nicely as our dip-buying strategy paid off. For the first week of September 2014 we found two entries in the FX market that appear to contradict each other.
EURAUD Technical Analysis
EURAUD daily is providing us with a technical entry to long the FX cross at market price. We are perfectly aware of the European Central Bank (ECB) monetary policy meeting on Thursday where a new QE may be introduced. In such a scenario, the Euro is expected to be heavily sold against a basket of currencies including against the Australian Dollar (AUD).
EURAUD Daily Chart
Please click on the chart to enlarge:
However, we are not planning to remain in the trade until Thursday. If the upcoming economic data from China will fail to deliver, the Australian Gross Domestic Product (GDP) due in the early hours of Wednesday morning will definitely seal the fate of our trade. With little time remaining until economic figures will flow from China, our long trade in EURAUD is at market price, protective stop layered at 1.4013, targeting 1.4190. The estimate for duration for this trade is 4 days so we are no concerned by the negative swap rate that may be incurred.
NZDJPY Technical Analysis
NZDJPY is also providing us with a technical long entry in the Forex market. We recognize the potential for reversed Head-And-Shoulders (H&S) on the daily chart where an entry already being confirmed at the time of this writing.
NZDJPY Daily Chart
Please click on the chart to enlarge:
We are aware of the correlation between the commodity currencies so an apparent contradiction is seen in buying EURAUD and NZDJPY, especially ahead of key economic figures from China. As this is a technical entry we chose not to argue with the graph and accept the entry. By buying NZDJPY the positive swap will negate the losses of rolling over EURAUD long trade. We are entering NZDJPY at market price, protective stop order layered at 86.35, targeting 88.80.
There is a fair possibility one of the trades will be stopped out while the other will be in a decent profit. We are willing to accept the risk as we believe a profit will be made when all trades will be closed.
Key Economic Figure
This week is enriched with economic data. Naturally, the US Non-Farm Payrolls is the key economic figure for this week. We would also pay strong attention to the ECB monetary policy meeting, which is likely to have a great impact on all EUR pairs and crosses.
You may review our Trades Performance and note a profit was made by the end of each month since we began issuing trade alerts and market research. Updates regarding the above trades will be made at bottom of this page. To be notified when a trade update is released, please subscribe to DDMarkets.com.
01/09/14 UPDATE: NZDJPY is trading at 87.39 at the time of this writing. we are closing 20% of the trade at market price. EURAUD is trading at 1.4056 at the time of this writing, no action is taken.
01/09/14 UPDATE II: NZDJPY long trade is almost +50 pips profit at the time of this writing, trading at 87.44 at the time of this writing. We are closing 10% of the long trade at market price and shift the protective stop loss order as we have gained a sufficient distance from our bullish entry.
01/09/14 UPDATE III: NZDJPY has painted a reversal pattern on the hourly chart, initiating the first dip before a resumption of the uptrend. As a precaution, we are liquidating another 10% of the long trade at market price (87.33).
02/09/14 UPDATE: Ahead of the Building Approvals data from Australia EURAUD is trading at 1.4086 at the time of this writing. We are closing 10% of the long trade at market price.
02/09/14 UPDATE II: EURAUD spikes higher, trading at 1.4100 at the time of this writing. We are liquidating 35% of the trade at market price ahead of the RBA monetary policy.
02/09/14 UPDATE III: EURAUD continues to soar as it trades at 1.4118 at the time of this writing. We are closing 20% of the trade at market price and shift the protective stop loss order to 1.4094.
02/09/14 UPDATE: IV: EURAUD is trading at 1.4135 at the time of this writing. We are liquidating 15% of the long trade at market price and shifting the protective stop to 1.4100. NZDJPY is trading at 87.37 at the time of this writing.
02/09/14 UPDATE V: NZDJPY is trading at 87.25 at the time of this writing. To recap, our protective stop loss for NZDJPY. We are closing another 10% of the trade at market price and continue to benefit from the positive swap rates. EURAUD is trading at 1.4146 at the time of this writing. We are shifting the protective stop loss to 1.4110.
02/09/14 UPDATE VI: We are closing 10% in EURAUD long trade at market price (1.4150), leaving only 10% of the trade in the market. Protective stop loss is shifted to 1.4120.
03/09/14 UPDATE: We were stopped out on EURAUD long trade after shifting the protective stop above the entry and realizing 90% of the trade with a decent profit. Our NZDJPY long trade is in a fair profit at the time of this writing (87.28) as we continue to benefit from positive swap.
04/09/14 UPDATE: NZDJPY attempted to break above the neckline on multiple occasions but without any success. We are closing 30% of the trade at market price (87.41) and shift the protective stop to 87.00.
09/09/14 UPDATE: We are continuing to earn on the positive swap rates and the exchange price. NZDJPY is trading at 87.72 at the time of this writing after breaking above the neckline. We are liquidating 10% of the trade at market price and shift the protective stop to 87.25.
Trade alerts are also issued in the weekly update.