Boris and Kathy's FX Blog www.bktraderfx.com
10/25/2006
ITS BEEN ANOTHER BUSY DAY!
Today's Email Alerts:
Alert # 7 Tighten Stop on T2 for NZD/JPY
We are up approximately 65 pips on our second lot of NZD/JPY and although we have already made sure that this winner will never turn into a loser, we want to lock in some profits as well.
Therefore, we are moving our stop on the second lot of NZD/JPY to 78.22, which would ensure that we have banked 48 pips on the second lot. Tack on the 27 pips from the first lot and we have earned a minimum of 75 pips on this entire trade!
Our second target is still at 77.85.
Alert # 6 T1 Hit in NZD/JPY
Just as we expected, the RBNZ Kept interest rates unchanged at 7.25 percent and gave us an extra bonus when they said that Q4 inflation would be unusually low.
Our first target on NZD/JPY was hit easily, banking us 27 pips. Our stop on the second lot of the position is now at breakeven. Our T2 target is 77.85.
Alert # 5 FOMC Instant Comments
For the third meeting in a row, the Federal Reserve left interest rates unchanged at 5.25 percent. This decision was fully priced into the market and not what traders were sitting on the edges of their seat waiting for. Instead, everyone was focused on the FOMC statement and wanted to see the Fed put their concerns about core price inflation on paper. The statement was virtually unchanged expect for two things. The Fed added the line "Going forward the economy seems likely to expand at a moderate pace." and deleted the reference to commodity prices contributing to the high level of resource utilization. Aside from that, they did not change their stance on inflation. The lack of more hawkish comments has disappointed traders as they send the US dollar and yields lower, resurrecting the possibility of a rate cut early next year. However, even though the comments on inflation did not change much, we want to point out that the statement is still slightly more positive than the last, thanks to the more optimistic take on growth. The take away is - Do not expect the Fed to change rates again any time soon and the knee jerk reaction is more a reflection of reversals on trades by speculators who were looking for more from the Fed. For the time being, 1.25 and 120 will still hold in the EUR/USD and USD/JPY and we expect more dollar bulls to begin to move to the sidelines.
Alert # 4 Looking for Weakness in NZD/JPY
New Zealand had crappy CPI numbers last night. The market was banking on a strong CPI release to justify a rate hike by the RBNZ tonight - and judging from last night's softer data, its not likely that we will see one. Japan on the other hand had stronger trade data out last night and should print hotter CPI numbers tomorrow night.
We are selling NZD/JPY here at 78.70, stop at 79.15. First target is 78.43, second target is 77.85. As usual, if the first target is reached, move your stop to breakeven on the second lot.
Alert # 3 For all those still in EUR/GBP
We took a stop at 6695 today, but many of you may still be in the trade since our original stop was 6690 and we moved it up in the middle of the night. IF you are still holding this trade move your stop to 6695 and place T1 target to 6715.
The bullish IFO numbers may have turned sentiment around in this pair and for those of you stil in the trade its definitely worth to hang in there. Let's see if it can rally to our T1 target.
Alert # 2 Stopped on Long EUR/GBP
We are stopped out on EUR/GBP at 6695 (-11 points) on the trade. Comments by BOE's Bean that inflation remains a worry put the bid back into the pound and scuttled the trade. One of our key rules when trading these short term moves is - we are right or we are out.
We are sidelined for the time being, but tons of event risk later in the day should offer some opportunities. Stay tuned.
Alert #1 Update on Long EUR/GBP
EUR/GBP hasn't moved since yesterday with the market clearly ignoring the weak UK CBI data. We are going to move our stop from 6690 to 6695 risking only 10 points on this trade. German IFO comes out at 4AM EST (8AM GMT) and if it is an upward surprise the pair should move our way if not we are going to take a very small loss an look for better idea later on in the day.
Note also that we going to set T1 target at 6715 for the first 1/2 of the position if it goes our way. If the T1 is hit be sure as always to move stop to breakeven.
Today's Email Alerts:
Alert # 7 Tighten Stop on T2 for NZD/JPY
We are up approximately 65 pips on our second lot of NZD/JPY and although we have already made sure that this winner will never turn into a loser, we want to lock in some profits as well.
Therefore, we are moving our stop on the second lot of NZD/JPY to 78.22, which would ensure that we have banked 48 pips on the second lot. Tack on the 27 pips from the first lot and we have earned a minimum of 75 pips on this entire trade!
Our second target is still at 77.85.
Alert # 6 T1 Hit in NZD/JPY
Just as we expected, the RBNZ Kept interest rates unchanged at 7.25 percent and gave us an extra bonus when they said that Q4 inflation would be unusually low.
Our first target on NZD/JPY was hit easily, banking us 27 pips. Our stop on the second lot of the position is now at breakeven. Our T2 target is 77.85.
Alert # 5 FOMC Instant Comments
For the third meeting in a row, the Federal Reserve left interest rates unchanged at 5.25 percent. This decision was fully priced into the market and not what traders were sitting on the edges of their seat waiting for. Instead, everyone was focused on the FOMC statement and wanted to see the Fed put their concerns about core price inflation on paper. The statement was virtually unchanged expect for two things. The Fed added the line "Going forward the economy seems likely to expand at a moderate pace." and deleted the reference to commodity prices contributing to the high level of resource utilization. Aside from that, they did not change their stance on inflation. The lack of more hawkish comments has disappointed traders as they send the US dollar and yields lower, resurrecting the possibility of a rate cut early next year. However, even though the comments on inflation did not change much, we want to point out that the statement is still slightly more positive than the last, thanks to the more optimistic take on growth. The take away is - Do not expect the Fed to change rates again any time soon and the knee jerk reaction is more a reflection of reversals on trades by speculators who were looking for more from the Fed. For the time being, 1.25 and 120 will still hold in the EUR/USD and USD/JPY and we expect more dollar bulls to begin to move to the sidelines.
Alert # 4 Looking for Weakness in NZD/JPY
New Zealand had crappy CPI numbers last night. The market was banking on a strong CPI release to justify a rate hike by the RBNZ tonight - and judging from last night's softer data, its not likely that we will see one. Japan on the other hand had stronger trade data out last night and should print hotter CPI numbers tomorrow night.
We are selling NZD/JPY here at 78.70, stop at 79.15. First target is 78.43, second target is 77.85. As usual, if the first target is reached, move your stop to breakeven on the second lot.
Alert # 3 For all those still in EUR/GBP
We took a stop at 6695 today, but many of you may still be in the trade since our original stop was 6690 and we moved it up in the middle of the night. IF you are still holding this trade move your stop to 6695 and place T1 target to 6715.
The bullish IFO numbers may have turned sentiment around in this pair and for those of you stil in the trade its definitely worth to hang in there. Let's see if it can rally to our T1 target.
Alert # 2 Stopped on Long EUR/GBP
We are stopped out on EUR/GBP at 6695 (-11 points) on the trade. Comments by BOE's Bean that inflation remains a worry put the bid back into the pound and scuttled the trade. One of our key rules when trading these short term moves is - we are right or we are out.
We are sidelined for the time being, but tons of event risk later in the day should offer some opportunities. Stay tuned.
Alert #1 Update on Long EUR/GBP
EUR/GBP hasn't moved since yesterday with the market clearly ignoring the weak UK CBI data. We are going to move our stop from 6690 to 6695 risking only 10 points on this trade. German IFO comes out at 4AM EST (8AM GMT) and if it is an upward surprise the pair should move our way if not we are going to take a very small loss an look for better idea later on in the day.
Note also that we going to set T1 target at 6715 for the first 1/2 of the position if it goes our way. If the T1 is hit be sure as always to move stop to breakeven.
posted by BKTrader # 10/25/2006 07:08:00 PM 
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