Hi all,
As predicted, I will probably be the least active contributor on this blog due to my style of stock investing. As it is there is no material change in the makeup of my portfolio, this post will be just an update on the Forex market and my trade.
This week has been a very interesting week in the FX market. In my previous post, I predicted the Aussie will rise to parity therefore I took a long position in the Aussie. With the RBA announcing a surprise rate hike to 4.75% this week, it pushed my current AUD position to an all time high which was around parity.
I decided to hold on with hopes that the Fed annnouncement of QE2 will be at least as expected which will have a dollar weakening effect. (Taking abit of risk here). With Fed announcing asset purchase of 600 Bn. The AUD rise up to another all time high since it has been free floating in the 80's. I subsequently closed my trade at a profit of abt 200+ pips.
Going forward, the FX market will be probably be event driven with the underlying dollar weakness flowing thru most pairs. Although I believe there are still opportunities to short the dollar, I'm increasingly wary of the whiplash that we may face when the institutional speculators unwind their short dollar positions, therefore I should be going for a tighter TP point and in general shorter trade duration compared to previous weeks. There are still ECB and BOJ announcments to come this week ensuring a choppy market. Personally, I would stay out of the yen dollar trade due to the risk to BoJ intervention as yen is approaching its 15 year strongest against the dollar.
Till next time.
IceCorp
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