Forex Portfolio Update | MulderFX.com

Sometimes the exact opposite happens of what you expect happens. In our last Forex Portfolio Update we indicated that we expected the USD to rise further because of the troubles in Egypt and a strong recovery of the USD on February 28th. The opposite happened. The return was under pressure early this week after a good result in January. The return of February plummeted on Tuesday/Wednesday to more than -10%. The turnaround came on Thursday and Friday, the return of February is now above 10%. We are satisfied with the good start of 2011. Especially the way how the performance is achieved is satisfactory. The last 36 closed positions are all positive. Click here for the complete account statement. One note here is that we have many positions open at the moment, we have the patience for these to be closed positively. After January and February, we are almost 50% return in 2011.

EUR/USD
The EUR/USD started at the beginning of the week slightly negative, just below 1.36, but on Monday there was a level above 1.37. In the days that followed the EUR/USD increased steadily to well over 1.38. The reversal came on Thursday after the ECB maintained the interest rate at 1%. That decision was not a surprise. The surprise came in the notes, ECB President Trichet showed absolutely no willingness to raise interest rates. This is surprising given the inflation level above 2%. On Friday, the decrease continued after the NFP figures. The EUR/USD ended the week around the level of the beginning of the week. The question is what now? Back to 1.38 or a further decline to 1.3250-1.3450 levels.

Other currency pairs in the spotlight
USD/JPY: Was trapped in a range of 81.30-82.00 last week. Only on Friday after the NFP figures there was a swift decline to just under 81.00. Then quickly back up to break the 82.00 level. Depending on the coming news, we expect next week the USD/JPY to remain trapped below the 83.40 (strong resistance) and 81.00 (strong support).

AUD/USD: An impressive rise from well below the 0.9900 level to well above 1.01. The increase is explained by rising oil prices. Last Friday the oil price started falling, is this a trend for the next few weeks? Or maybe a rate hike in China next week? Both events would be substantially lowering the AUD.

Forecasts next week
Our expectation for next week is that the market moves sideways, after the past volatile weeks. Except for the GBP and AUD, there is a lot of for next week on the macroeconomic agenda in these countries. We see the EUR/USD in a range of 1.3450-1.37 for next week. Of course it depends on what kind of news comes from Egypt, it has quite a strong influence on the Forex market lately. Will the safe haven currencies, CHF and JPY, become stronger next week when it begins to escalate? We keep an eye on all the developments and we are confident that with the current positions we are able to expand the good returns in the month of February.