SEVEN

SEVEN

 

Many of you must have seen this famous Pitt/Freeman movie called "Seven", a weild, suspense, scary criminal film about the "seven sins" of human being.

 

The FX market closed with most major currencies stuck at the "big-figure 7"----the EUR/USD closed at above 1.3700; GBP/USD at 1.5700; USD/CHF at 0.9700 and AUD/USD at 0.9700.

What's next? Will they all stuck at this low after their recent high or will it drop below the "line-7" and go towards "line-5" as some technical analyses show?

 

I continue to hold the idea that the USD will drop more eventually if one looks at the market till year-end. The period at present is a "consolidation" of prices reaching their first level peak as prices reached psychological peaks AUD/USD 1.0000; GBP/USD 1.6000; EUR/USD 1.4000 etc. The US authority also appears to be wanting a "slower pace" for the USD drop as seen by Tim Geithner's vague speech yesterday.

The crucial date is 3 November when the Fed will decide interest rates and whether and how the QE2 may come. It is also coincidentally clashes at the same time of the by-election. It does not need me to say what will happen then.

 

Strategically, this is "golden opportunity" for "position accumulation" on my beloved currency AUD. As I said above, I am not sure whether the "line-7" could break, really don't know. If you are not sure about the USD short-term run, go for GBP/AUD----i.e. short GBP against AUD. It also plays save by accumulation AUD in 2-3 lots, if it goes down at all. I really do not have a crystal ball.

 

As the Chinese saying, this is the time of "vulnerability", and it is also time to show who is the hero. I love it.

 

Victor Ho