by Amelia » Mon Dec 03, 2012 11:19 pm
Monthly Summary:
Number of Trades: 2
Winning Trades: 1
Losing Trades: 1
Total Pip Gain/Loss: +13.3
Yesterday:
Yesterday Pip Gain/Loss: +13.3
04 Dec 2012 Daily review by myfxpedia.com:
The Euro suddenly came back to life and kicking hard yesterday breaking above the psychological barrier of 1.30. Is this rally genuine? So let dissect into yesterday news and see what the reason behind the rally:
Firstly, we have the Greece government came out offered to buy back Bonds with expiration on the offer by 7th December. Although the offer of buy-back is somewhat about 60% haircut to the original Bond rate and yet the market rally due to better than market expectation. Oh, am I missing something? Is it the haircut to the initial Bond rate and the market love it....geez, Mr. Market must have expecting of getting nothing out of Greece. For that I just can’t wait to see the next round of Greece Bond auction, just wondering any gutsy investor(s) out there would buy into Greece Bond in the future? Ah, I forgot, maybe the European Central Bank (ECB) would smilingly put up both hands.
Next, came Germany Chancellor Angela Merkel opens up the can of worm, saying that Germany may ultimately accept a write off on Greek debt. Wow, what an astute investor decision that is, I cannot think of any sound investor would even contemplating of thinking about lending money to a debt ridden country or person and then announcing of probable writing off in near future. This surely can only be done by politicians since it’s not their hard earn dollars, ultimately, it’s tax payers money that they are dealing with. I just am gobsmack.
Finally, we have Spain coming out asking the ECB to bailout their banks and the euro rally some more..hahahaha. Note, Spain only request for bailout on their distress banks and not sovereign bailout. I guessed if it was actually the sovereign bailout request was make the euro would rally much harder. Damn, this is truly confusing for my cumquat little brain and so I thought...if one day Italy and then France came out requesting for bailout then the euro will probably shoot over the roof and out into the un-chart territory. Damn, that must be exciting.
Any, it just too hard to dissect into this awkward behaviour for my little cumquat brain and so we leave it there. I suppose the only thing we can do is to manage our trades and be patience until opportunity arrived and in the mean time we just have to sooth ourselves such that, the market can be irrational at time and the irrationality can be much longer than one’s pocket can bear.
At time of writing we are now only 2 ½ hrs away from the Reserve Bank of Australia Rate decision and I guess you all know my view on this as I have said it so many times in my daily updates. The only cloud that I can see that would make the RBA members to think twice in dropping rate was the much improve China Manufacturing report that released yesterday. Well, we just have to wait and see. It’s either our short positions in AUDUSD and AUDNZD will turn into candy or lemons, we will know in about 3 hrs time.
Impact News today:
03:00 am (NY) EUR – Spanish Unemployment Change
04:30 am (NY) GBP – Construction PMI
09:00 am (NY) CAD – BOC Rate Statement; Overnight Rate
07:30 pm (NY) AUD – GDP
Trading Positions:
AUDUSD – H4. This pair is currently being under short term downward pressure and trades within the downward channel. We took an initial short position yesterday.
AUDNZD –Daily. This pair has been in a major downtrend since November 2011. It reached the low 1.2370 in last October 2012. This low has not been retested to confirm actual low. Over the last 2 weeks it has showing sign of weakness and upon break the upchannel to the downside will ultimately seeing the pair retesting the last low.
EURCAD – H4. Yesterday we took an early entry (although, we already have a higher pending sell order) due to initial price behaviour at the 1st resistance (eclipse). Unfortunately, with much “excited” news came out of the Euro zone the prices continued its upward momentum and also triggered our initial Pending Sell limit that has been set sometimes last week. From chart below, you can see that prices is well extended on the 4 hr chart with momentum being overbought as well as showing Negative Divergences on H4 and H1. We will look initially for price to pull back to the 3rd degree uptrend line as target 1.
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