This week was a rather quiet week as bullish sentiment for equity markets seems to pause or fizzle out and summer doldrums set in. Earnings as well as economic reports yanked markets both ways, but some key bullish measures have been taken out and further upside will depend on earnings next week. Overall resistance starts to build across the board and the Japanese Yen strengthened especially over the last two trading days and broke through major support which opened the way for further downside.
The Australian Dollar continue to search for a bottom and appears to grind one out between the 0.9000 and 0.9200 level from where it could attempt a breakout and move higher while the New Zealand Dollar has shown strength and is approaching the 0.8100 level. We expect to see further strength from the Australian Dollar especially in the AUDUSD currency pair due to a short covering rally.
Additionally we expect the USD to strengthen compared to the Euro as well as Sterling amid profit taking before seeing a stronger mover higher. Over the summer we expect the EURUSD currency pair to move past 1.3400 while the GBPUSD currency pair could eclipse the 1.5500 mark; we do not expect this to take place until after a minor correction.
Overview of profits for the week which ended July 26th
- GBPUSD: 50 pips
- EURJPY: 75 pips
Total Profits: 125 pips
Monday, July 22nd
USDCHF Long Recommendation
We recommended a long position at 0.9400 with a take profit level of 0.9500 (USDCHF Breathes at Support). This was an addition to our existing short position which we took on June 13th at 0.9150 and this trade currently carries a floating trading loss of 255 pips. This represents a decrease of 7 pips compared to last week. We will maintain our take profit target for the long position at 0.9500 and 0.9150 for the short position.
Tuesday, July 23rd
EURUSD Short Recommendation
We recommended a short position at 1.3200 with a take profit target of 1.2850 (EURUSD Head-and-Shoulders). Our stop buy at 1.3275 was triggered as well and this trade currently carries a floating trading loss of 80 pips. We will maintain our take profit target for the short position at 1.2850 and 1.3375 for the long position.
Thursday, July 25th
AUDNZD Long Recommendation
We recommended a long position at 1.1425 with a take profit target of 1.1775 (AUDNZD Final Call). This was an addition to our previous two long positions which we took on July 1st and July 12th at 1.1825 and 1.1625 respectively and this trade currently carries a floating trading loss of 513 pips. This represents an increase of 187 pips compared to last week. We will maintain our take profit target for all three long positions at 1.1775.
Friday, July 26th
USDCAD Long Recommendation
We recommended a long position at 1.0250 with a take profit target of 1.0400 (USDCAD Rests at Support). This order has not been triggered yet and remains open for next week as we are within 30 pips of it.
Exit from trades of previous weeks
GBPUSD Hedge
We closed our open GBPUSD hedge for a profit of 50 pips on July 24th as our stop loss of 1.5350 was triggered.
EURJPY Hedge
We closed our open EURJPY hedge for a profit of 75 pips on July 24th as our stop loss of 132.50 was triggered.
We had a total of four trading recommendations this week. One was a new position and currently carries a floating trading loss of 80 pips, two were add-on positions to existing trades and currently carry a floating trading loss of 768 pips while one remains open and none were closed for a profit. We closed two positions from previous weeks for profits of 125 pips which equals our total weekly profits.
In addition to our trades from this week we also carry ten positions from previous weeks. We have three open NZDUSD positions, two long positions and one short hedge, which currently carry a floating trading loss of 237 pips. This represents a decrease of 151 pips compared to last week. We will maintain our take profit target of 0.8185 for the long positions and 0.79500 for the short position.
We have one open GBPUSD short position which currently carries a floating trading loss of 261 pips. This represents an increase of 116 pips compared to last week. We seek to add to this currency pair next week and adjusted our take profit target to 1.5125.
We have one open EURJPY short position which currently carries a floating trading profit of 20 pips. This represents an increase of 125 pips compared to last week. We will maintain our take profit target of 127.75.
We have three open EURGBP short positions which currently carry a floating trading loss of 1,637 pips. This represents an increase of 115 pips compared to last week. We will maintain our take profit target of 0.8275.
We have two open EURAUD short positions which currently carry a floating trading loss of 2,608 pips. This represents an increase of 16 pips compared to last week. We will maintain our take profit target of 1.3585.
We have two open CHFJPY positions, one short position and one long hedge, which currently carry a floating trading loss of 90 pips. This represents an increase of 18 pips compared to last week. We will maintain our take profit target of 103.75 for the short position and 107.75 for the long position.
We have four open AUDUSD positions, three long positions and one short hedge, which currently carry a floating trading loss of 1,112 pips. This represents a decrease of 185 pips compared to last week. We will maintain our take profit target of 0.9600 for our long positions and 0.9000 for our short position.
We have three open AUDJPY positions, two long positions and one short hedge, which currently carry a floating trading loss of 1,088 pips. This represents an increase of 130 pips compared to last week. We have adjusted our take profit target to 96.00 for the long positions and 89.00 for the short position.
We have three open AUDCHF long positions which currently carry a floating trading loss of 1,819 pips. This represents an increase of 117 pips compared to last week. We will maintain our take profit target of 0.9175.
We have two open AUDCAD positions, one long position and one short hedge, which currently carry a floating trading loss of 95 pips, equal to last week. We will maintain our take profit target of 0.9850 for the long position and 0.9400 for the short position.
Our floating trading loss at the end of the week for Tier I stood at 1,019 pips. This represents an increase of 276 pips or 37.15% compared to last week. Our floating trading loss at the end of the week for Tier II A stood at 2,129 pips. This represents a decrease of 43 pips or 1.98% compared to last week. Our floating trading loss at the end of the week for Tier II B stood at 6,627 pips. This represents an increase of 78 pips or 1.19% compared to last week.
We hope you enjoy your weekend and that we will see you back on Monday.