FX Trading - Hey Joe

Been busy on several fronts and have been neglecting this blog. So here's a catch up with updates to remind myself of these interesting times in years to come.

Since the last post, the world looked like it was going to end again (apparently the 21 May 2011 date was a little off), as European concerns weighed and dollar buying picked up speed. Then we hit bottom and markets started to correct back, with most currencies and commodities, and the equity markets slowly and tentatively clawing higher after the recent huge sell-off. Whether this is just a pause before another leg down, or a reversal in the works, we'll have to see; 'cos most all fundamentals remain weak.

USDJPY

USDJPY - JPY still a safe haven currency ?!

Since our last post and the last peak circa 82.20, USDJPY still managed to spend some time above 82.00 before the bottom gave out on Thursday. Possible reasons? Well, US yields slid quite fast after weakish numbers out of the US, which led to USD sales across the board. Of course, don't forget the earlier statements from the BOJ Governor (see previous post). EUR, on the other hand, had other things on it's mind...

EURUSD

EURUSD - Nice chart to draw lines on

EURUSD was happily near the top of its channel on the recent correction when Junker's comments about possibly holding back aid to Greece took the market down over 100pips. Bot near the lows when heavy volume appeared to stop the sell-off, but never expected the strong move up in Asia on Friday morning. Excuses for Friday's move include a thin, stop-driven market, with China setting it's Yuan rate at another record high forcing Asian countries, notably Korea, to buy dollars to stem their currencies' appreciation. All these dollars were of course recycled into EUR's and such, according to anecdotal evidence.

GBPUSD

GBPUSD - X marks the spot

No prizes for naming the pattern. Got in late and nervously held to target; the move was counter-intuitive in most ways but if the chart says jump you jump. A big move lower in EURGBP kept GBP strong in recent days, and then dollar weakness on Thursday cemented the rally. UK fundamentals aren't exactly stellar, although one bright spot may have been an MPC member seemingly ready to support a rate increase, just as ultra-hawk Sentance is finishing his term.

So What's Up?

S&P - the representative chart

The S&P chart is rather representative of what's been going on so far. Worries abound of a global slowdown led by China and an anemic western world, and so you see the chart looking ready to roll over; although looking at the big picture this is nothing more than a correction in a crazy bull market. The line defining the up-trend may be broken yet, but even then we still have a long way to go before we see a meaningful correction of this last rally from around mid 2010 (I'm talking about those amazing numbers traders like to see from Mr Fibonnaci). 

So whatever happens folks, it's not the end of the world, yet. Species extinctions take place over long periods of time, and for you to actually witness the end of the human race in your puny little lifetime is more unlikely than winning the Powerball.

Peace.