Boris and Kathy's FX Blog www.bktraderfx.com
10/18/2006
Today's Email Alerts:
Alert # 2 Looking for AUD/CAD Weakness
After a long stretch of strength, we are looking for a near term top in AUD/CAD. Whenever we trade AUD/CAD, it all boils down to Gold vs. Oil or what we call the G-O Spread. Gold prices are having a tough time breaking $600 while oil is showing signs of bottoming out above $58 We expect more weakness in gold and more strength in oil, which should pressure AUD/CAD lower. CAD is also beginning to come in stronger, with leading indicators printing higher this morning. The rally is getting exhausted technically and fundamentally, we have good reason to believe that the pair is due for a correction.
So we are shorting AUD/CAD here at market (0.8575) with a stop at today' high of 0.8615. Our usually conservative first target will be at 0.8547. Second target is 0.8485. Once the first target is reached, dont forget to move your stop to breakeven.
**We got a Q about a technical setup in the AUD/CAD trade that may be counter to our view > perhaps this is true, but with OPEC's emergency cut, oil looks poised for a bounce which should help the CAD. However, we never want people to follow us blindly. If you dont like the trade for your own reasons or disagree with us, feel free to pass on this one.
Alert #1 BOE Minutes Offer Few Clues
Minutes from the MPC meeting in October revealed 7-2 vote suggesting that the BOE clearly has a hawkish bent at the moment. However, the overall feeing from members was that the risks were finely balanced between growth and slowdown. Given that fact the Central Bank may assume a wait and see posture in November rather than hike outright. All of which leads us to consider EUR/GBP to the long side today risking no more than .6685 as the stop.
**For those who asked us about why we didnt take this trade, it is a soft recommendation, meaning we were certain in the view, but for whatever reasons such as risk/reward, pip opportunity, technicals etc, it may not have been attractive enough for us to make it a full recommendation although we may be in the trade ourselves
Alert # 2 Looking for AUD/CAD Weakness
After a long stretch of strength, we are looking for a near term top in AUD/CAD. Whenever we trade AUD/CAD, it all boils down to Gold vs. Oil or what we call the G-O Spread. Gold prices are having a tough time breaking $600 while oil is showing signs of bottoming out above $58 We expect more weakness in gold and more strength in oil, which should pressure AUD/CAD lower. CAD is also beginning to come in stronger, with leading indicators printing higher this morning. The rally is getting exhausted technically and fundamentally, we have good reason to believe that the pair is due for a correction.
So we are shorting AUD/CAD here at market (0.8575) with a stop at today' high of 0.8615. Our usually conservative first target will be at 0.8547. Second target is 0.8485. Once the first target is reached, dont forget to move your stop to breakeven.
**We got a Q about a technical setup in the AUD/CAD trade that may be counter to our view > perhaps this is true, but with OPEC's emergency cut, oil looks poised for a bounce which should help the CAD. However, we never want people to follow us blindly. If you dont like the trade for your own reasons or disagree with us, feel free to pass on this one.
Alert #1 BOE Minutes Offer Few Clues
Minutes from the MPC meeting in October revealed 7-2 vote suggesting that the BOE clearly has a hawkish bent at the moment. However, the overall feeing from members was that the risks were finely balanced between growth and slowdown. Given that fact the Central Bank may assume a wait and see posture in November rather than hike outright. All of which leads us to consider EUR/GBP to the long side today risking no more than .6685 as the stop.
**For those who asked us about why we didnt take this trade, it is a soft recommendation, meaning we were certain in the view, but for whatever reasons such as risk/reward, pip opportunity, technicals etc, it may not have been attractive enough for us to make it a full recommendation although we may be in the trade ourselves
posted by BKTrader # 10/18/2006 06:11:00 PM 
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