And the Hits just keep on coming!

February 3, 2010 by banker
Filed under: Markets, Trades

Well for anyone who was wondering things didn’t get any better today. Today definitely felt like the market was going to blow up. Let’s start with the Euro. Just as Greece was gaining support from the EU for tackling is budget deficit by announcing additional measures to reduce its shortfall, Portugal was thrust into the spot light as the next country to face a significant budget deficit. The yield on their 10 year note rose significantly today as the Euro got hit hard. It is clear to me that attacking the Euro from the short side is the way to play it. With all the bad news coming out of the region and Emerging Markets under pressure traders will look to the Dollar as a safe(r) haven.

Latin America:

The Chilean Peso was under a lot of pressure once again today as pension funds were scrambling for Dollars at all costs. Local traders would not even take my calls as Dollars were at such a premium. Buy Dollars on any type of dip (if there is one)! I think we are looking at a minimum of 555.00. In Brazil also be long Dollars. This currency pair felt like it was set to pop today. REALLY POP! I traded from the long side all day and actually made a little money here. I will continue to do so. Colombia, this currency pair has really lagged the market. I would not sell it right now as it has shown only limited signs of life. I think it would be safe to put a small long Dollar position on, with a stop below 1950.00.

Asia:

I read today that China downgraded to of its Banks. Also that credit has severely slowed. This is exactly what the authority’s want. Now the question is, How long before the currency starts to strengthen? I think not long!

These markets are certainly loaded with fear. In the past two crisis (Asia 1996-99 and Credit 2007-09) markets moved quite violently. I have not seen this reaction yet, although it has certainly felt ready to pop many times. Will it happen, I am not sure, but right now I am not willing to bet against it.

Good Luck (to me too) and Good Forex Trading

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Will the Euro hit 1.3500 or 1.4500 First?

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