Running On Three Wheels

I am still running my operation on three wheels after the data center running my hosting provider’s systems moved operations to a new location last weekend, allegedly without advising them (or me) ahead of time. I actually doubt that is true but it’s what I’m being told and I won’t waste time arguing with them as my focus lies in getting things back operational.

Anyway, I have been waiting for my VPS to come online since Sunday night and it’s been very disruptive on my end as well. As you can imagine I’m already shopping around for a new data provider as this pretty much was the straw that broke the camel’s back. Just signed up for a test VPS at a new provider that specializes in hosting forex VPS on Windows Server and they promise 100% uptime.

My hope is that I will get access to the old VPS sometime today or tomorrow after which I will start copying my entire setup over to the new VPS for testing. If everything works there then I’ll officially migrate to the new data center and tell my current hosting guys to go and pound sand.

I have been keeping a close eye on the EUR/USD since Fed chairwoman Yellen last week hinted that rate hikes are a-coming this December and most likely over the next year. Quite frankly this is a pretty fascinating situation technically speaking. On the weekly panel (on the left) we are now seeing a bit of weakness right after a technical break out which looked like it was about to launch a short squeeze of biblical proportions.

The monthly panel (right) shows us a touch of a support range that kept the EUR bouncing (and the USD reversing) after the 2008 financial crisis all the way into 2013. Purely technically speaking a reversal from here would be the perfect setup for a sustained drop back toward par, but let’s not get up our hopes (or fears if you’re over here in Europe) just yet.

The short term panel is currently in the process of painting a pretty steep series of lower highs and lower lows. If that 25-day BB can be breached then it’s possible the EUR/USD drops all the way to 1.15 before thinking about a bounce. However this drop has been pretty fast given the prior advance, so a bit of profit taking here may produce at least a temporary bounce.

The main reason why I’m still a bit skeptical regarding a possible surge in the Dollar is the USD/JPY. It’s been pretty lackluster thus far and even managed to drop over the prior two sessions with a small bounce currently in process. If we get a more in depth retest of the 100-day SMA then I’d be up for a long campaign assuming I see continued weakness on the EUR front.

On a long term basis the AUD/USD is in a similar configuration as the EUR/USD and it looked like it was about to run for the sky when Yellen dropped in and ruined the party. There has been weakness over the past week, which actually started two weeks earlier. And that’s exactly what has me worried as the current configuration seems like an awesome opportunity for a long campaign.

I’ll continue to monitor the situation and if I see things move in sync then it may justify a lottery ticket or two. My reasoning is the old rule in trading which especially holds true on the forex side. If something is supposed to happen (stronger Dollar) and it’s not then usually the inverse reaction moves with a vengeance. In other words, it’s possible forex vigilantes are setting up a pre-Christmas Dollar stomping campaign before Yellen steps in to show everyone who’s boss.

Campaign Updates

The USD/CAD has been running fine albeit not as zippy as I had imagined. Trailing stop goes to below 1.2313 as I want to give it plenty of space to run. Preliminary target range here is around 1.26 plus minus.

Crude finally got out of the gate, wohoo! Took it a while and I’m now locking in about 1R in profits (my stop was pretty wide). This one could turn into a runner but if it corrects now then it’ll probably drop back quite a bit deeper, giving us an opportunity to go back in.

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