Daily Observations: January 22, 2013
- Long EURCHF from 1.2018 (1/2), Stop at 1.2218 (locked-in +200-pips), Target 1 at 1.2500 HIT, Target 2 at 1.2750
- Short GBPUSD from 1.5865, Stop at 1.5920, Target 1 at 1.5825, Target 2 at 1.5760
Recently Closed Positions:
- Closed Short AUDUSD from 1.0540 at 1.0520 for +20-pips
- Long USDJPY at 90.35, Stop at 89.50, Target 1 at 91.10, Target 2 at 93.30, Target 3 at 95.00
Time Frame: 1-day to 1-week
The Short AUDUSD trade taken early last week was exited yesterday for +20-pips, as the US Dollar lost ground across the board following the BoJ's policy changes that provoked an unwinding in short JPY positions. You can read about what I expected would happen below, and what has actually transpired in terms of Yen price action as well.
While the daily USDollar chart shows a potential Evening Star candle cluster (indicative of a potential bullish move for AUDUSD, EURUSD, and GBPUSD; and a bearish move for USDJPY), I think that any move will be primarily driven by the Yen, and secondly by the Euro. Thus: I remain adament about looking short AUDUSD and GBPUSD over the coming days. This view could be reinforced by two distinct events occurring: the Bank of England is close to shifting towards a much more dovish policy amid a weaker economy; and the S&P 500 is close to reaching topside resistance at 1505 in an Expanding Rising Wedge off of the August 2011 lows.
--- Written by Christopher Vecchio, Currency Analyst
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