Market commentary

9.08 bst

The yen pairs have finally stabilized around 95.6 and 122.70 which is near the 50% of the drop from 125.80 – 119.15. I am fairly pleased that I managed to capture some pips from this move. My system was long EJ at 119.6 and UJ at 93.40, and still remains long. I like to test it through big event risk so over time I build up a good understanding of how my system rules work out under extreme event risk.

The AUDUSD has dropped, I guess as a reaction of USD strength which drives down gold. Gold and AUDUSD are strongly correlated. Although in hindsight I should have reversed my long into a short as my system did, I am pretty comfortable with the long AUDUSD, especially keeping in mind the nice daily interest payments on long AUD positions. I don’t count interest payments in my account performance worksheets but in the real account it certainly counts.

EURUSD has produced a clear sell signal today, the first one at 1.2830 and a more definitive signal now at 1.2790. I feel tempted to take this trade but having lived through many of Draghi’s press conferences, I don’t want to take the risk. I can always make low-risk pips after the dust settles.

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