Daily Observations: January 22, 2013

RELATED QUOTES

SymbolPriceChange
AUDUSD=X0.9363+0.0005
EURCHF=X1.2171+0.0012
USDJPY=X102.3050+0.47
GBPUSD=X1.6800+0.0071

Current Positions:

- 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

Pending Positions:

- 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.

Read my current thoughts on the Japanese Yen here.

Read my prior thoughts on the Japanese Yen here.

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.

Any other trade ideas and general macroeconomic musings can be found in the Real Time Newsfeed, or by following me on twitter @CVecchioFX.

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

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Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    0.9362+0.0004+0.04%
    AUDUSD=X
    0.5573-0.0023-0.42%
    AUDGBP=X
    0.6774-0.0002-0.03%
    AUDEUR=X
  • Commodities
    Commodities
    NamePriceChange% Chg