The Weekly Update: The Japanese Yen and Crude Oil

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The ECB Aftermath and CHF

As we emailed last week we are focusing on crude oil (Nymex). The side-effects of the European Central Bank (ECB) monetary policy are felt across a basket of currencies and we believe additional time is required in order to allow us a safe entry in to the market. One of the main events this week is the Swiss National Bank (SNB) monetary policy on Thursday. There has been suggestions the SNB may act to weaken the Swiss Franc (CHF) but based on the Euro’s reaction to the ECB monetary policy we are uncertain any actions will take place. We do not have any entry in CHF pairs and crosses at the time of this writing.

There are early indications the Japanese yen (JPY) may strengthen against the US Dollar (USD) and Australian Dollar (AUD) but we may incur a ‘kick’ of between 80 – 100 pips, which we are unwilling to incur as these are only early indications rather than a decent entry. We our favouring USDJPY due to the low holding costs (interest at the rollover) but for the time being we will simply monitor the charts.

USDJPY Weekly Chart

Please click on the chart to enlarge:

USDJPY Weekly Chart 06/12/15

USDJPY Weekly Chart 06/12/15

We are aware Kuroda is due to speak at a financial forum that may trigger a strong JPY but we do not have a clean entry unless USDJPY gaps +70 pips (approx.) higher at the opening of the Forex market as a re-test (of the resistance) is possible,

Crude Oil Weekly Chart

Please click on the chart to enlarge:

Crude Oil Weekly Chart 06/12/15

Crude Oil Weekly Chart 06/12/15

Crude Oil Strategy

OPEC were quite reluctant in cutting the output on Friday but early reports already suggested the outcome of the meeting.  Crude oil found support on the weekly chart that may be firm enough to contain the weakness and unfold corrective gains in the commodity. A stronger support is at $35.00 (approx.) there is a fair possibility the current support will hold. If the price is able to break above the resistance further gains are expected.

Crude oil long trade is inline with our current USDCAD short trade as strong crude oil is often reflected in a strong Canadian Dollar (CAD). We certainly hope for a bearish gap as it would marginally reduce the required size of the protective stop, which is below $38. We can use an intraday stop but this greatly depends on the opening price of crude oil. Please note crude oil is subject to greater volatility than numerous currency pairs and the protective stop may be in accordance but within our risk management.

Unlike the Forex market crude oil will open at 23:00 GMT. We will assess the market and issue the trade alert via email, which will then be updated on this page.

Crude Oil Trade Alert Details

Please click on the chart to enlarge:

Crude Oil Weekly Chart II 06/12/15

Crude Oil Weekly Chart II 06/12/15

Crude oil long at market price (39.59)
Take profit: 47.40
Protective stop: 37.25
Risk Ratio (RR): 1 : 2.5 (approx.)
Estimated duration: 30 days

(We are aware crude oil dropped to 39.47 when the email was delivered).

08/12/15 UPDATE: Crude oil resumed its downtrend without being in a marginal profit. The price has triggered the protective stop loss order.

The Weekly Update: The Japanese Yen and Crude Oil
As crude oil short trade is closed this page can now be accessed by all traders. Open trades are restricted to members only. We have been providing trade alerts in the Forex market since May 2014.
The Weekly Update: The Japanese Yen and Crude Oil

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The Weekly Update: The Japanese Yen and Crude Oil

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The Weekly Update: The Japanese Yen and Crude Oil