Texas Trade Forex Report For the Week of 08-12-2013 thru 14-12-2013

Good Morning, Good Afternoon or Good Evening where ever you are in the world. This is Texas Trade Report for the week of The Week of 8-12-2013 thru 14-12-2013. I will be talking about the GBP/AUD, AUD/CAD, NZD/CAD, NZD/USD, and CAD/JPY, and EUR/JPY currency pairs in these week report. This is sole focus of this report.  Before I can go any further, here is the risk disclaimer.

Risk Disclaimer:
  Trading Forex is a risky business and sometimes you will lose the money that you traded. You are leveraged 50:1 or even more. There is the risk of loss of the money have invested. Never invest money that you are not committed losing. There is a possibility of losing your original investment. If you are not sure about investing, seek the help of registered investment adviser.

Also, the purpose of this trading lesson is education. This does not constitute trading advice. Nor do I give out trading signals. All opinions are my own and not Blogger.com nor Google.com.

On to the focus of this week’s report, GBP/AUD is the first pair that I will be looking at. This currency pair has been trending up since November 5th. I am expecting it to retract back down near the 61.8 percent retracement level at 1.7547 and 1.7384 at 50 percent level. This pair has been steadily rising. I do expect for it to continue higher that retracement is need to continue the trend upward. There has been much speculation about Mark Carney and company at the Bank of England raising rates. I don’t expect that to happen in 2014. It could happen in 2015. But, it is more like the RBA would raise rates than the BOE at this point. The numbers out of China came out relatively position like the trade balance came out at 33.801B versus 31.100B. Exports are up and came in at 12.7%. I am expecting this pair to open down when the markets open at 5 PM Eastern Standard Time. This is a huge improvement from last month. The exports were 5.6%. It is a big jump. Forex Trendy did find this pair and help me to assemble this pair of the report. I was not able to find it at the time. I am going to buy at the November 5th low when it gets there. I am expecting the RBA to follow like RBNZ with regard to raising interest rates.

On to the NZD/CAD, I said earlier that this pair had to bounce past our target of 0.8725 and it did. It made it to 0.8830 on Friday due to the Non-Farm Payrolls report. Forex Trendy did help to find this pair and it made a good call. I did place a trade on it. Also, I do highly recommend having this tool when you can’t get to a trade and will find trade possibilities. I do expect it to go a bit high especially since the release of the Chinese data that just came out. This pair has been trading sideways on the daily chart. We are in a range between 0.8564 and 0.8830. I do expect when we open later at 5 PM Eastern standard time in the US, it will be higher on the release of the Chinese data. The release will add needed fuel to the fire of this being higher. I am looking for to short between 0.8950 and 0.9000 because it needs to retrace to go higher. The risk theme is coming into play. I would not be likely to short good data coming out of China. I have to go with what the data is at the moment. I could not play to speculate whether the data is false or not. It would take up too much time to go into. I am going with what is already there and don’t know if there are old measures in the past to measure economic data like the US. But, I do expect to retrace after it makes new highs on the release of the China and opening at 5 pm EST in the US.

Onto the NZD/USD, this pair has been trading sideways since 3rd of September 2013. It has touch around the 0.8403 handle several times.  I do expect it to touch there again and will press for a short of it hitting there again. The talk of taper is not having the impact on the markets as it had back in June 2013. I don’t expect any taper this month. I do expect that the taper could happen like in March is more probable. What will be the impact of the taper? It is anyone’s guess. I do expect a retracement and will expect a wash for pairs like NZD/USD. It has shown itself to be very resilient more so than EUR/USD. Especially, since the EU has debt problems much like a house that looks good on the outside and has hidden from view termites eating away at the foundation and the buyers are not allow to see what is really happening. This is why I am remaining short the Euro long term. Back to the NZD/USD currency pair, I do expect that will go higher the charts show it starting a downward trend. I am bit more cautious with it especially on the release of the Chinese data that we had yesterday with the trade balance report and export report.  I do expect that this pair will go even higher longer term because of interest rates going higher in 2014.

On to the AUD/USD currency pair, the pair did go lower on the release of the Non- Farm Payrolls report on US dollar strength. I do expect this bounce at 5 PM EST in the US. Also, I do expect that there is a strong possibility that the Aussie dollar will probably go higher in 2014. I am not expecting it to go lower longer term. I expect it to go higher. Many analysts have said that China is slowing down compared to the US. But, I am using the old way of calculating unemployment. Even though the number came out good, I expect that it will be short lived longer term. I do expect the effects of the taper to be a wash. The effects of the taper will be on pairs where there is more emphasis like the Euro since majority analysts put too much emphasis on it as a benchmark of risk.  The danger is if we have 2010 event, the Euro is not a good benchmark to measure how much risk people are taking on. I like using the safe havens as benchmarks to measure how much risk is being taken on. Back to AUD/USD, it tested 0.8996 as a low on Friday and did bounce back little bit on Friday. It bounced back to 0.9102. The Chinese data will make this pair bounce even higher. It could open about 50-100 higher with the release of the Chinese data that just happen. I am expecting it to happen at the opening of the markets.

Onto to the AUD/CAD currency pair, this a pair will react the same as its US counterpart. I am expecting this pair will go higher. I do expect that any chance of a major retracement will be small. We might get minor retracement along the way. I am not expecting huge one. Looking at it, it could go higher and make it back to the high of 1.0010. I do expect it to. The Bank of Canada kept interested the same this past week. The unemployment rate in Canada kept the same at 6.9%.  The labor participation rate came in 21.6K versus 13.2K. While the Canadian Ivey Manufacturing in Canada was down to 53.7 from 62.8, I don’t expect a lot of activity for the month of December being very close to the Christmas holidays. I am expecting a bit of slowdown, which is natural for this part of the year.   I do expect this pair to go higher for the longer term.

On to CAD/JPY, this currency pair had jump much like its US counterpart on the news of Non-Farm Payrolls, I am not expecting to go higher short term. It could in the medium term go higher. It has been trending higher. At some point, I do expect that it could trend lower like much of the Yen pairs and been trending higher. The pair has been ranging between 92.19 as a low and a high of 100.94. I don’t expect that to hold. The Bank of Japan wants even more aggressive stimulus plan to lower rates and I do not think the BOJ wants to engage in the same type of practices that the Federal Reserve has been engaging in. The reason being is that a magic can only fool people for limited time has to show their hand instead of bluffing their way through the game of poker. I do believe the Yen is very much oversold and is due for rebound. The markets do not like anything to remain constantly oversold. An oversold Yen is a currency that can rebound very quickly. The numbers of Japan have been good of late. A major of firms and traders have oversold the Yen because the Japanese bond market yields. I believe this will be short lived the Yen will rebound.

Onto the EUR/JPY, the data out of Europe has been good, but questionable. This pair managed to go higher and got to the 141.00 level. I did get egg on my face 2 times on this pair. It is not playing very nice at this point. I still hold the view that it can’t continue to go up without retracement. It has managed to go track up without a retracement. I believe it is overdue for one even as the BOJ has made its remarks. I believe that Yen will rebound and the markets on Thursday confirmed the sell off on Thursday of US Equities and the specter of taper coming. I do hold the view of being bearish. I am not going use the USD dollar against the Euro. It is like pairing to lemons together for demolition derby. I want to pair a safe against the Euro because of considerations that the EU has really not gotten their act together in short period of time. A month or two month is really not long enough to say the debt crisis is over even though politicians in the EU are acting like it never appeared. It is a giant bluff. It is not one that I will engage in. I will short the EUR/JPY when I see it get extremely overbought. It has managed to get overbought and the Euro bulls have led the charge like a herd of stampeding cattle.  Longer term, I don’t see the Euro going higher against the Yen. Because the Yen is very much oversold against the Euro. I am expecting much larger retracement especially after the moves it has made. Take care and good luck trading this week.  I will put out another weekly report next Sunday and tomorrow I will put out a daily report. We will see what happens in the markets this week.

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