The Beast Trade Closed |
The US Dollar continued to get hammered on Friday in a relatively quiet trading. No explosive moves that I could see, but the Aussie made another all time high while the Euro gained as well. To put the USD weakness in perspective, it even dropped in relation to Japanese Yen. That is probably only temporary, the sell off in the JPY will likely resume, but it should illustrate just how precarious the USD has become. We can blame it on the discord regarding the budget, however, now that an “agreement” was reached, it is still unclear if that will help the Dollar next week. Probably very little long term impact, since the spending “cuts” were cosmetic at best, accounting for, what, 3-4% of one year deficit? Until we start reducing these imbalances by 30-40%, all this is a lip service and not a serious attempt to create a balanced budget.
This minor resurgence in the Yen put a little kink in my beast trade, the long GBP-JPY position. It was partially closed few days ago for 275 pips gain. I still expected the price to rally to 141.00 or so. On Friday it moved briefly above 140.00 but failed to remain there and pulled back. Given that the weekend was about to start and wanting to give up too much gains, I closed the trade 139.04, or 309 pips profit. For now I placed a new buy order at 140.15 expecting the rally to resume next week.
Earlier this week I wrote about a possible trade in the NZD-CHF. This particular set up, as well as a NZD-CAD from last week, did not work out. The Kiwi has been too strong but these orders remain valid, for a possible fill in coming days…. Have a great weekend!
Mike K.
About the author: Mike Kulej
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