Trader456's trading ideas

[trader456]

System signals buy for EURUSD


As mentioned in my previous posting, US dollar has rallied for the past one month. US dollar has rushed up too fast and too steep. Fundamentally and technically I think this rally is not sustainable. All you need is one bad US economic data to turn this US dollar direction around.

AUDUSD is already up, gold and silver price is already up, crude oil is already up, but EURUSD is still trading in a tight band of 1.4829 - 1.4967. In my view EURUSD is lagging behind. If USD is weaken, then EURUSD should go up higher.


Both Comm Channel and Stochastic had signaled buy for EURUSD

Bought 10,000 EURUSD at 1.4919
Stop level at 1.4818

Chart:Forex and Binary Trading: System signals buy for EURUSD

[trader456]

AUDUSD moving upwards


AUDUSD gained after commodities prices rose and traders bet the decline in the past month is overdone. Rising commodities prices will continue to provide support for this AUD crosses.

My system has continued to signal buy for AUDUSD.

I had placed working order to buy 10,000 AUDUSD at 0.8670
Place a stop level at 0.8570

[trader456]

Double-top formed for USDJPY


Fear in the financial market has strengthen Yen, at the same time USD has changed its direction from strong to weak.

Double-top formed for USDJPY on the hourly chart.

Shorted 10,000 USDJPY at 108.44
Stop level at 109.49
Target level at 107.00

[trader456]

I believe the bull run from commodities is not over, this will provide support to AUDUSD.

My trading system has signaled buy for AUDUSD.

Bought 10,000 AUDUSD at 0.8678
Stop level at 0.8578
Target level at 0.8790

Chart: Forex and Binary Trading: Bought AUDUSD at 0.8678

[trader456]

Bearish on New Zealand dollar


The Reserve Bank of New Zealand cut interest rates for the first time in 5 years on 24 July 08. Reserve Bank of New Zealand reported that economic activity is likely to remain weak over the remainder of 2008.

Retail sales had fallen by the most in 4 years and consumer confidence hitting record lows, the New Zealand dollar has weakened to the lowest level in 6 months.

RBNZ Governor Bollard promising more rate cuts and the futures curve pricing such action, the New Zealand central bank has become the most aggressively dovish policy maker of the G10.

Further weakness is expected in NZD and for it to fall below 66 cents against the US dollar before end of September.

NZDUSD tends to fall when daily stochastic shows oversold.

Chart: http://www.forexandbinary.com/2008/08/bearish-on-new-zealand-dollar.html

[trader456]

The Big Mac Index was introduced by The Economist in September 1986 as a humorous illustration and has been published by that paper annually since then.

See Wikipedia on the details on Big Mac Index.

According to Wikipedia, the Big Mac was chosen because it is available to a common specification in many countries around the world, with local McDonald's franchisees having significant responsibility for negotiating input prices.

Basically this index measures the cost of big Mac across different countries. Trader can base on this index to measure which currency is undervalued and which currency is overvalued.

According to Big Mac Index for this year, the most undervalued currency is Chinese Yuan, it is undervalued by 49%. The 2nd most undervalued currency is Japanese Yen, it is undervalued by 28%.

The overvalued currencies are the European currencies, EUR is 55% overvalued, Swiss Franc is 65% overvalued.

So base on the Big Mac Index, the ideal FX strategy is to short EUR/JPY.

Details: Investment News Update: Big Mac Index

[trader456]

On Monday I had shorted 10,000 USDJPY at 109.53, stop level at 11.46, target level at 108.20. Details here.

Triple top is formed in the hourly chart, looks like the uptrend is over for this cross.

USDJPY is now trading at 108.72, up 99 pips, profit is US$85.21.

My system has signal SELL for USDJPY since it was trading at 109.60, and it is still signal SELL now.

If you are interested to know the details of my trading system, send an email to me at metal.commodity@gmail.com.

Chart: http://www.forexandbinary.com/2008/08/usdjpy-profit-up-99-pips.html

[trader456]

On Monday I had shorted 10,000 USDJPY at 109.53, stop level at 11.46, target level at 108.20.

USDJPY is now trading at 108.20, up 108 pips, profit is US$88.15.

My system has signal SELL for USDJPY since it was trading at 109.60, and it is still signal SELL now. So I lower my target price from 108.20 to 107.50.

Chart: Forex & Binary Trading: USDJPY profit up 108 pips

[trader456]

Yesterday I had shorted 10,000 NZDUSD at 0.6962, stop level at 0.7080, target level at 0.6766. Details here.

Today Australia central bank had cut its interest rate by a quarter point to 7%, causing AUDUSD to plunge down, and dragged NZDUSD down as well.

Currently NZDUSD is trading at 0.6842, profit is up 138 pips, US$137.60.

I believe US dollar strength will continue until Australia, New Zealand, Europe and UK are done with their interest rate cut, which will take another 6 months at least in my view.

Hence I think its not too difficult to make money in the forex market by shorting EURUSD, AUDUSD, NZDUSD and GBPUSD during this period.

My trading system is still signal SELL for NZDUSD. If you are interested to know my trading system, send an email to me at metal.commodity@gmail.com.

Chart: http://www.forexandbinary.com/2008/09/nzdusd-trade-profits-138-pips.html

[trader456]

NZDUSD fell to a low of 0.6805 before rebounding up. I believe the overall trend for NZDUSD is still down, but it is oversold now, so we may see a rebound.

I decided to take profit first, bought back at 0.6871, profit is 91 pips, US$90.60.

If you do not want to miss the next downtrend for NZDUSD, click here to open a FX platform account.