FX Trade Diary 21 Sept 2011

New format and more content from today onwards!

I am decided to throw in my trade ideas and also write on my take on macro economics. Trade ideas will come with H1 and H4 charts.

EUR/USD

21/9/2011 1940 Hours :

Market appears to be entering a consolidating period. It may be a good idea to take a long at position at the demand zone at 1.3594-1.361. I will be monitoring the approach of the price into the zone. I am still holding my pending short at supply 1.3785, SL 1.382, TP 1.346.

Basically this is my trade idea for the next day or two. Please do not trade this. This is not 4D.

EURCHF

21/9/2011 1940 Hours :

EURCHF is really a crazy pair after the announcement of the soft peg of the Swissy to the Euro. While the whole world wonders whether the SNB will really stick to their equally crazy statement, market rumors on Wednesday on SNB's intention to move the soft peg to 1.25 sent EURCHF rallying in a dizzying heights in a matter of minutes.

Market comments aside, this pair is not really trade-able but if you feel like taking a small bet, you might want to try the small demand zone at 1.214-1.216. This isn't really an ideal trade due to the massive pinbar sticking into the supply at 1.203, which might invalidate the idea that 1.214-1.216 is a valid demand zone. The rumors mentioned 1.25, but the valid supply zone is really at 1.26-1.266.

21/9/2011 2157 Hours :

This move towards the upside is not going to be sustainable. According to Reuters and Zerohedge, SNB sold 1500 tons of their 2500 tons inventory of gold recently, which is worth approximately 86.4 billion US dollars. The money from the sale is very likely used up in the crazy purchase of worthless Euros from 1.1 to 1.22. It does seem highly plausible that the US$90 billion (or was is in Swiss franc) used in the purchase of Euros was in fact, coming from the sale of the gold, which in turn was likely to be purchased by China and India. That doesn't give SNB much room as their war chest is therefore limited. It is likely that it will not be long before Mr Market continue to short EURCHF and SNB will have to resort to all out printing of the Swissy. Currency wars ahoy!

At near term, given the limit amount of ammo in SNB war chest, they could only spread fear and drive speculators to do their work for them. Perhaps 1.26 is possible but the downside back to parity is starting to look very frightening. If the drop does happen, it will happen in a very short span of time.

I really pity the Swiss people and curse their short sighted SNB. This is really the Brown's bottom version 2.

XAUUSD

21/9/2011 2130 Hours :

I got a couple of friends getting really interested in gold. I took a look at the prices of gold and saw that there is a very strong demand at 1692-1706. This means any hopes of going below 1700 will require nothing short of a gangbang or a economic disaster. Given that economic disaster is scheduled for 2012, the only way gold can move is towards 2000. If it ever hits 1700, do buy some of it.

As one of my friend likes to say, SELL HOUSE AND BUY! (Your neighbour's house too)

USD/CAD

21/9/2011 2311 Hours:

This pair looks like it will continue to consolidate in a upward channel. It should move into Supply at 1.001-1.006. Depending on the depth of the pentration of the supply zone, it may be possible to look for a short to supply at 0.98-0.984.

GBP//USD

21/09/2011 2335 Hours :

I had neglected this pair for a long time and realised my folly. It was in a clear down channel for so long. Never too late, there is still an opportunity to sell it into the next major demand zone at 1.551. There are 2 possible entry points for a sell position, supply at 1.572-1.575 and 1.578-1.58.

1. Entered pending sell at 1.579, SL 1.583, TP 1.551.
2. Entered pending sell at 1.573, SL  1.5765, TP 1.551.
   I am contemplating moving the SL to 1.583 to take a full swing down though.