I said in Monday post that sentiment in Eurozone was turning positive and I made a call the $EURUSD should go higher, and it did, the pair now trading at 13325, not far away from resistance level 13340. For those of you long the pair, you made great profit like I did, but don't get too greedy. FOMC will meet next week and decide whether to taper or not, I don't think EURUSD will go much higher before the meeting. I set up a short entry at 13340, target 13290 and stop 13370.
My weekend post argued that UK economy was improving and we should see GBPUSD go higher, it did and exceed my expectation, On Tuesday I argued the good news was priced in and I shorted the pair at 15710, that didn't work out well, I stopped at 15745. I am not so sure how far this pair will go, sentiment is very important in FX market, right now there are many traders turn positive on the pound and it could go much higher. I don't want to long or short at this point, stay on the sideline and see how the market will go
On Monday I argued we will break 100 level and it did, I said price need to clear 100.25 level convincingly before it can move much higher, and it did not. Th pair is just range bounce now, should see support around 99.5 resistance 100.25. The thing is I don't think Japaneses want to see their currency weaken to 110 or 120 like other commentator said, that make no sense, Japaneses import lots of raw material for their manufacturing business, they don't want to see the Yen weaken so much to see their cost spike. Having said that, nor do they want to see Yen strength to level like below 90. So my advice, sell at 101 area and buy at 99 area, play the Ping Pong games !!!!!!
You know what, the rallied we saw on Aussie is completely short covering, net short position on the pair reached record in last few weeks, major investment banks like UBS made some ridiculous that Aussie will drop to 0.85, when market are too short and too negative, price rebound. So simple is that. Price could still go higher from this point, but not much before the FOMC next week, I will short at 0.936, stop 0.938 and target 0.93