Wednesday, August 16, 2006

Sometimes, You Just Have to Take Your Chance

I got a little confused over the direction of the forex market this morning. The first signal to buy the dollar appeared at 8am for GBP/USD, USD/JPY and USD/CAD. Then I saw a dollar-short signal at 9am for USD/CHF and back to long USD for EUR/USD at 12pm. FYI, I didn't take any of the signals and chose to remain on the sideline.

By 1 pm (just before the release of the US report at 1.30pm) , there was a signal reversal on the USD/CAD which clearly alarmed me to short the dollar. I didn't have much confidence on the position but there was a chance for me to reenter a short USD/CHF position at 1.2356. Yes 1.2356! And I kept on pondering...

I didn't take it in the end... and I missed the rally.

The Fed is definitely done.

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