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Wednesday, December 10, 2014

Be Wary of USD. Great Trades with NZD/CHF. WSJ News

Today was a great day for the NZD/CHF. great day for the NZD in general. I went long on the NZD/CHF pair this morning and within an hour and a half it jumped to my take profit of 44.5 pips. it was a decent little pop. I could have squeezed a few more pips out of the pair, but one of my top rules is to not be greedy.

I am still holding on to my dropping USD/MXN. There was an article in the Wall Street Journal yesterday about how the Mexican government is going to start selling back the USD in order to make the MXN go up in value. So I have a feeling that over the next month, there could be some major downward pressure on the pair if the Mexican government follows through. Also, the USD will start to have some major downward pressure in January.

Another article in the Wall Street Journal yesterday spoke about how the Fed is going to be dropping "considerable time" pledge. The considerable time pledge was that there is a considerable amount of time until the Fed will begin to up interest rates. They now believe that the economy is recovering so nicely that they don't need to keep selling cheap credit and they can begin to up interest rates. This increase of interest rates will definitely decrease the USD as many people will pull out of it due to higher rates. My hope is that my USD/MXN short will become profitable in mid-January when the Fed officially drops this pledge. Like I have said many times before, I am not one to trade based off of world news and policy, but sometimes when a trade is not going the way the technical indicators say, I delve into some economic news to see if I should get out for a loss or hold on for a potential profit. At lease shorting the USD/MXN I am making a few dimes every day from the interest (if you use Oanda like me) or the  rollS (if you use FXCM).

Anywho, that is my two cents for the day. I think it is a perfect time for people to short the USD/MXN. I may have shorted a bit soon, but I think it is still a good buy and I think doing it now would be the perfect buy... well the perfect sell haha. I think the Wall Street Journal nailed it when they said the USD is getting to large. It can't keep climbing. It has been for weeks now. Be wary fellow traders.

On a closing note. Feel free to follow me on Twitter. I just launched an account. @YoungWBuffett. I would love to build up a nice Twitter following. I will probably tweet about as much as I post here.

#YoungBuffett Out


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