Currency forecast, July 8th 2013

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Currency forecast, July 8th 2013
Currency forecast, July 8th 2013

Well, that NFP number surprised me a bit. Not the number itself, as it was more or less as expected, but the reaction on it. Stocks and USDJPY rallied like the number was twice as good as expected which wasn’t the case. I think that move was completely wrong and we will see the turnaround very soon.

We still have the crisis in Portugal – I think it is only a matter of time until the government has to resign due to the high unemployment rate plus the protests of the Portuguese people. And we must not forget, also Greece and Spain have still the big issue with the high unemployment rate and there has not been any solution for it yet. Cyprus is kind of a small country but still it is a problem for the European Union, and believe me, Cyprus knows very well how to play with the government of the European Union.

They have seen how to do that when Greece had the negotiations with the European Union. First they agree to get help and the money and then Cyprus will start negotiations again and again to change all those necessary things to get the aid.

All those things are telling me that the next wave is under way and I would suggest to trade the following assets to get prepared:

I still like to be short USDJPY and short EURCHF (also because of the story about Croatia, which I wrote last time).

Also, gold looks again quite cheap and I would go long, should we see the 1.210,00-1.215,00 level.

By the way (it is still far away, but we have to start thinking about it), the elections in Germany get closer and closer. There will be the time when people close at least a part of their positions, because it looks like that we will get a very close result as the SPD would only work with the Green-party and the CDU/CSU would only work together with the FDP and both coalitions would not have a majority currently if you trust the surveys. It will need a few more weeks until this topic comes into the game, but it definitely will.

Good luck.

Current trades, positions and levels:

For info how the model works: The P/L is always calculated with the size of 1. So if the position is 1 and it makes a profit of 100 pips, the P/L would be +100 pips. If the position is 2 and it makes a profit of 100 pips, the P/L would be +200 pips of course – it is always calculated with the position size of 1. The position could go up to 3, in case the system has a strong view

Current spot: EURUSD 1,2885 , USDCHF 0,9590 , EURCHF 1,2355 , USDJPY 100,25 , EURJPY 129,20 , EURHUF 294,30 , USDCAD 1,0530 , GOLD 1.242,15

EURUSD
(Entry lvl):
Current position: flat
Target:
Stop lvl:
Last trade:
P/L (ytd): -110 pips

USDJPY
(Entry lvl):
Current position: Short 3 @ 99,65 (1@ 99,00 and 1@ 99,70 and 1 @ 100,25)
Target:
Stop lvl: 101,50
Last trade: Sold 1 @ 100,25
P/L (ytd): +780 pips

EURJPY
(Entry lvl):
Current position: flat
Target:
Stop lvl:
Last trade:
P/L (ytd): +230 pips

USDCHF
(Entry lvl):
Current position: flat
Target:
Stop lvl:
Last trade:
P/L (ytd): -240 pips

EURCHF
(Entry lvl):
Current position: Short 2 @ 1,2355
Target:
Stop lvl: 1,2430
Last trade: Sold 2 @ 1,2355
P/L (ytd): +180 pips

EURHUF
(Entry lvl):
Current position: flat
Target:
Stop lvl:
Last trade:
P/L (ytd): +1560 pips

USDCAD
(Entry lvl):
Current position: Short 2 @ 1,0490
Target:
Stop lvl: 1,0610
Last trade:
P/L (ytd):

XAUUSD (Gold)
(Entry lvl):
Current position: flat
Target:
Stop lvl:
Last trade:
P/L (ytd): +86.000 USD