Would my account have made out as well as it has this week if I was managing the positions that were on the books from last week (with stops and limits)? It is impossible to tell. Nonetheless, all of the positions that I had this past Friday have played out well. Coming back from the Expo, my USDCAD and USDCHF positions have both hit my second targets and are completely cleared. A relatively new position, my CHFJPY took only a couple of days to hit both the first and second targets. My distant objective was set to only the bottom of the prevailing, descending wedge formation (meaning I missed out on significant follow through); but I’m not greedy. As for my open interest, I am still short both EURUSD and EURGBP and well in the money on both. A first objective on the first pair has already been tripped; but the second pair has far more potential over the longer term given the fundamental outlook. There is something that needs to be pointed out from this net exposure, however. While my pairs were varied, my exposure was consistently short risk appetite. This increases risk; but my fundamental convictions offset my concern with net risk. You have to accept some risk to make return. As for new positioning, I am already in well-performing pairs at the momentum. Jumping in most of the yen crosses or other risk-sensitive pairs now is difficult because the market has already moved so far that entry would be quite expensive. That being said, I am still looking at a few potentials. I am still watching AUDCAD for the inevitable break from 0.9435/0.92; but that still seems a ways off. More immediate is the potential collapse of the steep rising trend channel for AUDCHF. A confirmed break below 0.99 would be my signal for entry; but my stop will have to be kept reasonable (around 100 points). The first objective would be set around 0.97.

GBPUSD has broken below support at 1.5171, the bottom of a range that had contained the pair since early April, with prices now testing major psychological support at the 1.50 barrier. The UK general election is in focus as months of speculation end with voters finally heading to the polls. A series of televised debates between the candidates for Prime Minister produced a serious contender in the Liberal Democrat’s Nick Clegg, meaning that displacing the broadly disliked Gordon Brown and his Labour party will not necessarily secure a majority for the top-contender Conservatives and threatening to create the first “hung parliament” since 1974. This could prove to have dire outcome for British Pound, with investors fearful that a divided government will not have the conviction to meaningfully deal with the nation’s soaring budget deficit, a gap approaching 12 percent of GDP. Alternatively, an outright Tory victory could send the UK unit sharply higher. I will remain on the sidelines for now to see how the situation plays out from here. A break below 1.4970 would expose the 1.4803.

The USD/JPY has found support at the 20-Day SMA at 93.49 where we also see short-term trend line support. Considering the resiliency of the pair in the face of the issues in Greece and a pull back in stocks, this could be an opportunity to get long. I would wait for a break back above 94.00 with a target of 95.00. However, a break back below the technical level could change my bias.

Following up with the EUR/GBP short recommendation from the previous week, the exchange rate tumbled 90+pips on Wednesday, which triggered the sell entry I had at 0.8584, and slipped to a fresh yearly low of 0.8440 during the overnight trade to exceed my target at the August low of 0.8455. However, as the daily RSI treads into oversold territory, we may see a corrective retrace going into the end of the week and I will look for a rebound before looking to sell the pair again, but the uncertainties surrounding the Greek bailout and the U.K. election could spark increased volatility in the exchange rate during Friday’s trade.