TRADING FORK EXTREMES – 3 month Setups.

[zunis-myst]

That's okay with USD/CHF. I have been in this pair with 2 trades (with low leverage). The first one I took 2 days ago: But these trades are just for the worst case (out of my view USD has it's peak) = in case that USD/JPY will be heading for 109 or higher.
We (you) shouldn't forget and should have in mind the present fundamentals. It doesn't look really promising positive when we have S&P 500 and DOW.

For this reason your tech view is very helpful, though it is contrary to mine this time. I have attached the USD/JPY where I just have drawn the new pitchfork.

I am also long with AUD/USD

[Summerset]

Originally Posted by zunis-myst

We (you) shouldn't forget and should have in mind the present fundamentals. It doesn't look really promising positive when we have S&P 500 and DOW.

Yes, fundamentaly stocks are weak. They are increasingly getting weaker by the day here too - (emerging markets). Incidently, that's why I am going for a stronger dollar in the intermediate term. The stock market here inversely relates with the dollar. I was under the impression that its the same co-relation with the S&P and Dow. When they weaken, doesn't the dollar strenghten ?

[zunis-myst]

First of all the Bla, bla from the Fed and It will be very interesting to see what Ben Bernanke does now, because he has always maintained that it is not actual inflation that is important to Fed policy, but inflation EXPECTATIONS!?
Whereas Trichet will raise rates next month. This is supportive for the euro.

The dollar was always in correlation with both S+P and Dow since beginning of 2008. If stocks were up so was USD. If they were down like today dollar is down, too.

[zunis-myst]

Summerset,
as we can see on the attached charts and the today's FOMC (decision) >announcement! No prediction from my side, but you can may be recognize that some bigger movement is in the air

[Summerset]

Hello Zunis,

I agree - the market should breakout once the FMOC decision is out.

I am still biased, and forecasting a south move for Eurodollar to 5360 initally, and beyound possibly to 4930-4850. That's why I am long Swissdollar at 1.0435 & 1.0405 targeting 1.0750. But had to move the stops down to 1.03

The swissdollar in particular is heavily oversold, and should make a strong breakout bounce. I also believe to have a correct "somewhat verified" wave count on it.

So Good Luck.

N.B:- The Aussiedollar is showing an ending diagonal by the way.

[zunis-myst]

Hello Summerset,
I hope and I am sure that you have realized what's going on now. Dow and S&P tumble, carry trade crosses tend to return downwards against Yen due to increasing USD weakness. Aussie heads as strongest southbound.

And, yes, I am still long AUD/USD. But no problem. It will come back some time soon.

[Summerset]

Originally Posted by zunis-myst

Hello Summerset,
I hope and I am sure that you have realized what's going on now. Dow and S&P tumble, carry trade crosses tend to return downwards against Yen due to increasing USD weakness. Aussie heads as strongest southbound.

And, yes, I am still long AUD/USD. But no problem. It will come back some time soon.

Hello Zunis,

Yes, U were right on this. The dollar seems very negatively corelated with the stocks. I have had to close half my position at loss, and hedge the other half by shorts at 1.03, looking for a re-bound at 1.016 to double the longs and close the shorts.

But of course, I don't like it, and feel that the Euro may breakout higher this time. On the daily charts the Eurodollar is doing a Flat all the way to 5800 and even 5850. And the indicator I am using will not give a breakout signal until end of Friday at least, so its very likely that if I am not very watchful to be trapped with more longs at 1.016, or even worse to be trapped with new shorts, if I liquidate the current ones now to take partial profits, & re-short, only to see the long side become active again. So I am doing a lot of watching & monitoring on this, which is something - I don't usually do or advocate.

Good Luck with the Aussie.

[zunis-myst]

Originally Posted by Summerset

...looking for a re-bound at 1.016 to double the longs and close the shorts....
...so its very likely that if I am not very watchful to be trapped with more longs at 1.016, or even worse to be trapped with new shorts, if I liquidate the current ones now to take partial profits, & re-short, only to see the long side become active again.

Well, I haven't entered USD/CHF short yet. But may be. More useful are shorting carry trades like AUD/JPY or EUR/JPY. I see Swissie going (down) up! towards 1 again