. . . between Spot & Futures Market
Patience is indeed a virtue especially when it comes to waiting for the market prices move to a bias direction higher for the US dollar. Apparently, the as every trader / investor is looking forward to the Friday's report; market participants have already absorbed the inflationary effects and analysis from other indicators. However, the price fluctuated with a wider range including the GBPUSD which made a recovery up to 1.6515 that led to a corrective move for the GBPJPY as high as 134.02; wherein the key price to watch is at 133.65 on the recovery levels. Although, currently working at the 132.50 would now continue to make another attempt heading south to the 131.00 in anticipation before the news on Friday.
As the US Dollar Index is currently above the 75.05-20 bp would be gaining its momentum on speculative longs by institutional ahead of the report. If so, staying above these levels for the week would ignite a renewal for US Dollar bulls to dominate the market.
As it has reflected on the major pair that we have chosen & executed to hedge with the USDCHF (Spot Market) last May 05 @0.8607 long an equivalent to the USDX long @73.05 basis point (ICE Futures/spread & straddle strategy) versus an earlier short-sell on the GBPJPY @134.53 Therefore, the key levels to watch for the closing prices would entail the USDX to close above these levels to maintain a positive tone for the succeeding weeks to follow that would lead to a probable trend and price reversal confirmation. Which includes volume and open interest build up on the futures market as well.
These strategies are made more to maximize the market potential of the position and using the leverage / overall positive net positions to assure the strategic technique in protecting the gains against any possible adverse price fluctuation in the event of a surprising fundamental news that may otherwise do the opposite. A bit more expensive to carryout but investment well made based on a carefully planned and executed trade. Please refer to our market view & analysis report dated 6th of May 2011: An Effective Forex Trading Strategy on our website at http://www.megatrade101.com/
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