Update On Shanghai Index, EUR/USD And Gold

Shanghai Index: It seems to be following the same pattern as last time it dipped below the important 2,800 closing level. The last few days have been meandering with slightly higher closing levels. A clear break in either direction would be nice.

EUR/USD: we are not out of the position yet, and we keep our Stop level of a close below the 1.4590 level at the end of any given day (17:00 EST). Today has started out poorly, but we will see where the afternoon takes us. There are more and more analysts stating that they believe EUR/USD’s move higher has run its course, but many of them turned bearish on the pair at the start of August with the NFP release. Those analysts missed the last 7 big figures on the way up. We have been long since the end of July (www.backbayfx.com/blog.php) and remain in our “half” long position. Even if EUR/USD is starting to reverse it’s long term trend, we think there is a good possibility that the NFP numbers tomorrow will allow for a final push higher in the pair to shake out the weak players who have already put on short positions.

Gold: we missed the last move higher. We thought we would have a sharp breakdown in the last few days and that did not pan out. We remain committed to a long term (year plus) higher level in gold, but for our trading, we are on the sideline at the moment.

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