FX Trading - Play The Game

With all the weak numbers coming out recently, you'd think it's the beginning of the end. After all, we're just 2 quarters away from 2012. The threat of slower growth in the global economy is certainly hanging over our heads, as evidenced by the slide in the equity markets. Oh well, the show must go on.

This week sees RBA, RBNZ, BOE and ECB meetings, not together of course, and the one expected to hike rates? China! No, they don't tell you when they meet and make these earth shattering decisions. But it's all expected, and if it comes to pass will certainly keep markets on a downward path. Other than that, the ECB is expected to be the next one to raise rates, and the focus on this is probably what's keeping the EUR well bid, after European debt-crisis fears abated slightly with the IMF agreeing to dole out funds when the market feared it wouldn't.

Everyone's pushing back expectations of a hike from England and the US after recent data, although you still have officials pushing for a tightening soon. There's even talk of a QE3; well, who knows, if pigs could fly...

So what is one to do? The one 'sure thing' out there seems to be a bet on more USDJPY weakness. The pair has been dragged down with falling US yields (witness last week's sudden drops after US data releases), and a certain online broker showing >80% of traders long the pair. Well, they're just asking to be slaughtered. An assault on 80.00 is currently underway as we write, and an 'orderly' move lower is unlikely to attract intervention, so little stands in the way of further weakness.

EURGBP may yet be fulfilling the breakout move we talked about all those posts back, and we still support patient longs.

Patience - key word of the day.

Peace

Note: Just to get this down - saw it somewhere, can't remember the huge numbers but here it is, Greece's 4  largest creditors in descending order - France, US, Germany, UK. The states is in 2nd place...hmmm....