From the straddle trade I made awhile ago. Sell stop triggered. Gained an easy yet risky 15pips from that move. Risky because 72EMA was just below the entry point and indicators are already in the oversold zone. Same reason why I didn't put a trailing stop.
Showing posts with label oversold. Show all posts
Showing posts with label oversold. Show all posts
Happy 4th of July!
The US dollar was steady against other major currencies in morning trading here Wednesday as players remained on the sidelines before the Independence Day holiday in the US.
All 4 majors trend sideways since this morning. Thin liquidity is expected to persist until Thursday's announcements about interest rates in the UK and the euro zone. ECB is expected to keep rates on hold, while BOE is expected to raise rates by 25 basis points.
European bonds are trade lower in today’s session following an unwinding in safe haven flows as market participants jump back into equity. This is good news for carry trades.
EUR/CHF pair broke the upside trendline, but indicators are showing overbought. Might have to wait for a dip to get in.
GBP/CHF pair trend sideway with overbought conditions.
Contagion of Thoughts
The sentiment of carrys unwinding is still building up as of this moment. This has been the topic of all the information sites that I know of.
The Bear Sterns situation That I mentioned last friday, the undervalued Yen, expectations of another rate hike from BOJ, SNB pushes the repo higher last week. All this scares the shit out of me. This is the time I wish I'm not in the market.
What caught my attention is the rise of the bonds price last friday. This indicates that big players are pulling their funds out of the equities and diverting to a more safe investment-bonds. This kind of risk-avert move if continued will cause the carrys to unwind.
Carry trades will inevitably be a very important market focus for this week. Traders will need to be on high alert for comments from G8 finance officials.
Though EUR/CHF is at oversold zone right now, we might see some corrections later. Breaching above friday's highest high of 1.6638 means safe to hedge long. Bounce of the middle channel(pls. refer to the previous post chart) or 38.2 fibo means a continuation of the bear moves.
To focus away from EUR/CHF. Part of my analysis shows a good sign of going long for EUR/USD pair. A hammer candle has just formed on the weekly chart. This is not a recommendation to trade, it is just my observation. Trade it at your own risk.
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