We witnessed a very violent week for any Japanese Yen related trade. The currency has been in free fall over the past few weeks and is caught in crossfire from the world’s two weakest economies, the ugly stepsister Japan and U.S., which has pressured the Yen against all major trading partners. Japan enjoys its weak Yen as it makes exports cheaper for them. Please view or update on the Japanese Yen we posted for all open trades related to that currency (Japanese Yen Update).
In other news Mario Monti announced his resignation (Monti announces resignation) while Silvio Berlusconi announced his plans to comeback from political darkness as his country needs him. His party withdrew support for Monti’s austerity measures which the ECB and Brussels have forced onto Italy. Monti said that without support from Berlusconi’s party as well as their former alliance partner, the Northern League, he is not able to govern Italy.
China on Friday announced adjustments to its QFII (Does China’s QFII Adjustment Matter?). The regulatory change allows qualified institutional investors to apply for an increase in investment above the current $1 Billion threshold. In general it does not change the investment landscape as QFII is capped at $80 Billion and currently only $36 Billion are allocated.
Overview of profits for the week which ended December 14th
EURGBP: 47 pips
AUDNZD: 100 pips
NZDUSD: 91 pips
Total: 238 pips
Monday, December 10th
EURGBP Long Recommendation
We recommended a long position at 0.8040 with a take profit level of 0.8090 (EURGBP searches for Support). We closed this pair on December 12th for a profit of 47 pips.
EURNZD Long Recommendation
We recommended a long position at 1.5500 with a take profit level of 1.5630 (EURNZD at Triple Bottom). This pair has moved higher, but has not reached its take profit level and we recommend traders to remain in this trade as advised.
Exit from trades of previous weeks
AUDNZD Short Position
We closed our two open AUDNZD short positions at 1.2500 for a profit of 100 pips. We opened those trades on October 2nd and October 16th respectively.
NZDUSD Long Position
We closed our NZDUSD long hedge at 0.8447 for a profit of 91 pips. We opened this hedge on December 10th.
We had a total of two trading recommendations this week. One was closed for a profit of 47 pips. We also closed two older positions for a profit of 191 pips which brings our total profits for the week to 238 pips.
In addition to our one open position from this week we carry seven positions from previous weeks. We have four open USDJPY short positions which currently carry a floating trading loss of 2,198 pips. This represents an increase of 620 pips compared to last week. We advise traders to remain in this trade, but to increase the take profit level to 79.50.
We also have one open USDCAD long position which currently carries a floating trading loss of 70 pips. This represents an increase of 27 pips compared to last week. We advise traders to remain in this trade as recommended with a take profit level of 0.9990.
We have two open NZDUSD short positions which currently carry a floating trading loss of 441 pips. This represents an increase of 365 pips compared to last week. We advise traders to remain in this trade as recommended, but to increase the take profit level to 83.00.
We have one open NZDJPY short position which currently carries a floating trading loss of 229 pips. This represents an increase of 210 pips compared to last week. We advise traders to add to their existing short positions next week if the pair trades above 70.70 and to adjust the take profit level upwards to 69.00.
We have one open GBPUSD short position which currently carries a floating trading loss of 132 pips. This represents an increase of 148 pips compared to last week. We advise traders to hedge their open short position with a long position at 1.6170 and to add to their shorts at the same level while raising their take profit level to 1.6050.
We have two open CADJPY short positions which currently carry a floating trading loss of 967 pips. This represents an increase of 380 pips compared to last week. We advise traders to remain in this trade with a take profit level of 81.30.
We have three open AUDJPY short positions which currently carry a floating trading loss of 1,431 pips. This represents an increase of 713 pips compared to last week. We advise traders to remain in this trade, but to increase the take profit level 85.00.
The Japanese Yen has added to our floating trading losses this week and we would like to point traders to our update on the Japanese Yen and trades associated with it (Japanese Yen Update). Floating trading losses associated with the Japanese Yen have risen to 4,825 pips, an increase of 1,942 pips. We can only reiterate that traders should not exit those trades and record losses. Those trades have topped out and started to turn around late Friday visible on their D1 charts.
We hope that you will enjoy your weekend and that we will see you back on Monday.
