Kruger Insights Thursday – December 12, 2013 by FirstMacro

BinaryOptionsNow | Published on December 12, 2013 at 12:32 pm

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Back In The Game – So things are finally heating up again for me, and I have been quite active over the past several hours. On Tuesday, I said I would be taking another shot at an S&P short and sold the market Wednesday at 1805 as per my recommendation. But I am going to be very careful with this one and have already eliminated the risk with a stop-loss at cost. Today, I am revisiting another trade that burned me at much higher levels earlier in the year, and have established a fresh long position in AUD/NZD at 1.0897. At the time of the establishment of the position ahead of the European open on Thursday, technical studies were showing oversold across the board from the monthly all the way down to the hourly chart. The price action was way too compelling to ignore. Throw in the fundamentals which should start to weigh on the higher yielding Kiwi in a risk off market environment and the trade becomes even more attractive. Ideally, we should get a quick bounce from sub-1.0900 levels, but I would like to hold this position over the medium-term as I see risk for significant upside. In my view, there is plenty of room for recovery well back above 1.1500 over the coming weeks, and it will be exciting to see how this plays out. So I have taken my shots with both these markets this year, and up to this point, both have gotten the better of me. But we live to fight another day and that day has arrived. It will be a sweet victory if I can come out on top with these two this time round.

kruger insights december 12, 2013

So Why Is The Euro Bid? – Moving on, many of you have been asking why the Euro has been so well bid in recent trade, and I warned to ignore the price action in the Euro on Wednesday. While I don’t think these Euro gains against the buck will be sustainable, and while I do see EUR/USD reversing lower over the short term, I am also not surprised with the relative strength. I believe a lot of the EUR/USD strength is less a function of the major pair itself and more because of the broader shift in dynamics away from risk correlated currencies. There are many market participants looking to diversify their safe haven investments, and many still believe the Euro to be an attractive option in the long run. So as market participants exit long commodity and emerging market currency positions, they are shifting back into both US Dollars and Euro. In the short-term, the Euro is the primary beneficiary, although I am not sure this will last much longer. Ultimately, I still believe the US Dollar will be the standout outperformer across the board over the coming months as the Fed signals reversal and risk assets capitulate. Elsewhere, EUR/CHF has managed a bit of a bounce in recent sessions, but with nothing truly supportive of this move, I wonder if the SNB has been active again. If we continue to see downside pressure in risk assets into the end of the year, I would be concerned if I were the SNB and would not be too confident that EUR/CHF will stay supported above 1.2200. Currency markets (other assets by extension) will get very exciting over the coming days and weeks if EUR/CHF 1.2000 is actually threatened.

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