EURUSD Longer Term Short Position

This is a very nice,longer term position that I took on August 27th. Just like its counterpart, USDCHF.

A classic tight range where the over and under pattern was once again present.

A 4H high was established @1.3400, on August 8, providing a nice resistance level. The level was once again tested on the 20th leaving a strong supply area rightabove it. Than, again, on the 27th, the level was visited once more. This time a Short position was established @ the 1.3997 area with stops above 1.3452.

This is was a text book over and under pattern trade with decent stops.

The pair was facing some exhaustion to the upside as suggested by the 4H MACD bear divergence pointing towards the 1.2990 level.

Therefore a bearish correction was due thus making this trade a no brainer.

Position currently secured by trailing stops with good floating profit.

Levels for the trade:

SL: 1.3455

Short @: 1.3997

TP @: 1.2995

USDCHF Long Position

This is a very nice,longer term position that I took on August 27th.

A classic tight range where the over and under pattern was once again present.

A 4H low established @ 0.9175, on August 8, provided a nice support level. The level was once again tested on the 20th leaving a strong demand area right below it. Than, again, on the 27th, the level was visited once more. This time a long position was established @ the 0.9177 area with stops below 0.9145.

This is was a text book over and under pattern trade with really tight stops.

The pair was facing some exhaustion to the downside as suggested by the 4H MACD bull divergence pointing towards the 0.9533 level.

Therefore a bullish correction was due thus making this trade a no brainer.

Position currently secured by trailing stops with good floating profit.

Levels for the trade:

SL: 0.9143
Long @: 0.9177
TP @:0.9533

Over & Under Pattern. Target already within reach.

USDJPY Diamond - Long and Short Term Setups

The Dollar Yen pair has presented a breakout of contracting range that began on April, 2013. This range presented itself as a clear cut diamond formation on the daily time frame.

A position LONG should have been established  around the 95.80 level. Some 30-40 pips SL would be a safe bet projecting the break towards the upside as the main diagonalof the formation is pointing down and therefore a break up was indeed to be expected.

The projected target to the upside is 108.85.

Levels for this trade that took place on August 8th 2013:

SL: 95.45
Buy: 95.85
TP: 108.85

Trailing stops already triggered.

If one was unable to catch the bottom of the formation, there was a chance to assume a LONG position last Tuesday (09.03.2013) and leave the position open 'betting' on USD strength due to the range breakout. Very conservative stops on this one.

Levels for this trade:

SL: 99.13
Entry: 99.32
TP 1: 100.00
TP 2: 108.85

Trade @ BE currently and partial close triggered @ 100.00.

Daily Chart Showing a Diamond Formation

A side note on this is that retail NET SHORT positions on USDJPY and crosses (YEN LONG) have surged by almost 150% since last week. Therefore, my contratrian view supports YEN weakness against all majors.

On another side note, there's always a possibility that the formation fails to deliver. However, a failed pattern is as good as the original plan because it clearly states that the market has chosen the opposite direction.  A MACD bear divergence on the daily time frame points towards the 90.90. So the pair is clearly showing early signs of exhaustion and a major turnaround shall not be disregarded as probable.

These were my predictions back in 2011.

Interesting they are slowly becoming a reality.

Best to all and stay healthy.

The U.S. Dollar and Commodities

As stated earlier, the U.S. dollar (USD) should gain against all currencies, except the JPY, in the coming years. I predict the USDX, currently at 76.50 + / -, to be about 99.50 + / -  by 2013.

What does this mean for commodities? The U.S. dollar has an inverse correlation with some commodities and stock market indices (equities).

So lets see,

Oil: The oil should keep falling the rising dollar. So we should see oil prices much lower than it currently is. The WTI is currently around 84.00, will rise to 90.50 approx. and then it should begin to fall again. Quite possibly we will see a barrel priced @ USD50.00 in a few years.

Gold: Gold is the current bubble. After reaching 1920 points and being considered the safe harbor, gold presents itself with  a huge MACD divergence on the weekly chart. This divergence should lead to a minimum target of 1043.900 in the upcoming years.  George Soros, not surprinsingly,  bought spot Gold as well as companies that exploit gold a few years ago. Soros sold most of his investments in gold by July / August this year. Needless to mention that Gold is also inversely related to the USD.

Silver: Almost a twin of Gold. We must also see Silver much lower in the coming years.

This will reflect directly in stocks related to commodities in Brazil for example. We should note, for example, significant drop in stocks of Petrobras and Vale in the coming years.  

The recommendation is to go short selling in the commodity spot corrections and also the papers linked to the commodity itself.

That is, when we look at the DOW @ 11,700 and oil above 90.00, the USDX at 76.00, you can indulge yourself short selling (short selling) Oil, Gold, Silver, Petrobras and Vale with good leverage. Conservative stops above the highs of the day, week or month depending on your risk appetite.

As stated before, the USD and other assets are in for a short-term correction. The minimum targets for these corrections are  already within reach. Possibly this could happen Monday. Let's look closely at the market at the beginning of next week.

Once they are reached , these targets should resume the dollar uptrend, the decline in stocks and commodities in the long run.

Cheers to all.

;-)