Special Report1: Trading the GBPCHF / GBPJPY
| 08 November 2011
Is an alternate choice of the cross rates for the weeks to follow. The process of deduction based on the market's behavioral price movements has led to this preference. This process is not as easy as simply choosing which of the currency pairs would be appropriate to trade, aside from the market's potential that it would generate.
The market psychology has played a vital role based not only from the current price trends, volumes and open interest; but including the historical correlations of each currency pair with a dominating and least dominant pair to choose from.
Trading the GBPCHF for the following weeks ahead has bottomed to two basic reasons in part of its technical overview from the chart patterns. One reason is that the British Pound has shown its resiliency for the past few months from its recovery price reversal which was at the 1.5270 GBPUSD rate which has sustained from October 06, 2011 extension & base price. Secondly, the USDCHF rate of 0.7071 has been the strongest appreciation for the Swiss Franc then as compared with the Japanese Yen's 75.55 intervention price levels. Timing market price movements is never easy, although a lot of traders and analysts have tried to anticipate such market speculative reactions but not everyone would have the distinct privilege of riding in one.
The GBPJPY trade of October 27 is one of those times where such an anticipation and a speculative decision was made prior to the Bank of Japan's intervention on the USDJPY rate. Luck and skill did play well and paying off for this trade which has been riding the price trend to this writing. The irony of the market's reaction before and after such volatile price action would 'stall' or others would term it simply as directionless as pairs would consolidate at a tight range. And the next move would come towards the closing of the week or month where position adjustments are made.
STATUS UPDATE: As of Market prices November 11 on Special Report 2 - Sequence of Trades
A detailed Trade Plan for the GBPCHF; including the previously executed trade with the GBPJPY is included in this report on our website. Access to the full report which has been updated with trade data from the November 06 to the 11th includes trades with USDCHF and a level playing field with the GBPUSD as an offsetting trade position against a pullback of the USDX.
