Forex Thoughts No. 2
I’m pretty sure a short-term top is in for EURUSD and I’m trapped up there. :) I have four positions open at an average price of $1.36132 and with EURUSD trading around $1.35764, I have a long way to go before I see profits again. Still my neural trend models say to remain long so and I will be adding to this position on severe drips (around $1.3500 and then $1.34700). Its too early to tell if the Australian Dollar’s trend is resuming or if its still consolidating, either way the trend model retains an UP signal for this currency. I don’t regret selling my two AUDUSD positions but I’m mad that I didn’t wait for the mini rally yesterday. Lesson learned, I should always trust my trend model and buy on dips, not on new highs. I have to re-examine my Yen model because it gives me a lot of UP signals in a continuing downward trend. I find it awfully suspect but then again the market forces could be there to make the Yen pop. A stronger Yen will surely rein in the carry trade and help reduce the global liquidity glut. That will in turn firm up our mortgage interest rates push more sub-prime borrowers into bankruptcy or foreclosure. Oh what a tangled web we weave, when first we practise to deceive! - Sir Walter Scott