Since the start of this month gold has twice attempted, and twice
failed, to reach above the resistance in the 1350 area that was set for it last
October. This, combined with the Non Farm Payrolls report from the US last
Friday, which has beaten expectations and in the process confirmed, for the
market at least, that softer figures for the preceding two readings were
weather-related, and made the continuation of the tapering of Quantitative
Easing a racing certainty, has created a case for now selling gold short that
can only be described as compelling.
As can be seen, the price action here has also resulted in a double top,
which is visible on the four hour chart above.
There are still clouds on the horizon, mainly in the form of the
geopolitical tensions that are Ukraine
and the Crimea region, but then the Forex
situation is never absolute. We have set our software to go short gold when it
determines a suitable entry point.
The debut of our new
“Mandelbrot” software
We are always looking for new ways that algorithmic software can assist
us in our endeavours in the Forex trading arena. For a little while now we have been working
on a new routine, which we have named “Mandelbrot” in recognition of
the work done, particularly in the area of fractals, by Benoit Mandelbrot.
On the 5th March last, which was Wednesday of last week, the
Mandelbrot gave us a signal to enter the USDJPY pair on the long side (as a
buy). At the time we ignored that signal on the grounds that the Non Farm
payrolls report in the USA was imminent the following Friday and this diluted
the odds of such a trade being successful, because a third poor reading of
this measure would have played havoc with the markets.
We will now be acting on that signal and, once again, have set our
software to take a long position in USDJPY when a suitable opportunity presents
itself.
On the same basis, we have taken a short position in the Australian
dollar against the Kiwi (AUDNZD). The Aussie against the US dollar (AUDUSD) is also in prospect.
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