14 September, 2009 by Stephen Leahy
Boston Sept 14 09:09 EST
I have been away for two weeks and feel refreshed. There is something to be said about disconnecting your technology and information leashes and just getting away for a while.
It is easy for me to write that, though, because the medium-term positioning that we have written about since early July has come true. Our two core positions (long EUR/USD and long Gold) have acted as we expected. So the question is, What Is Next?
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We will re-iterate that looking at any trade through one set of parameters or trade entry signals is a disaster waiting to happen. We always work to confirm multiple analyses before trading. But lets get started with some technical analysis:
Gold: The chart below is a daily chart. We used the same chart to call our last gold position from just below $950. At this time we see there is a combining of technical indicators near the $979 level which is where we took profit last time (see our Aug 21 posting www.backbayfx.com/blog.php). So we believe that this level will be a point of interest again. It looks to us like the mid-line of our Bollinger Bands AND the previous resistance level are in that same $979 area. Our concern is that we are confident that there are large Stop Loss orders up in the $1020 to $1030 levels. The largest of desks are incentivized to push gold higher and see what shakes out up there. So we are right in the middle of our two interesting price points…..we will sit out today to see what happens next.
EUR/USD: No questions, No rush, No problems. We remain committed to the 1.47xx handle on this move. Additionally, we are just now seeing the start of the expected parabolic build up of EUR/USD. Generally the peak of any movement is marked by an increasingly steep curve. To our eye, we have just begun that process.
Back Bay FX Services, LLC