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Daily Observations: May 10, 2013

Christopher Vecchio

Current Positions:

- Short AUDUSD from 1.0150, Stop at 1.0030(+120-pips locked-in), Target 1 at 1.0105 HIT (+50-pips), Target 2 at 0.9980 HIT (+170-pips), Target 3 at 0.9900 (+250-pips), Target 4 at 0.9860 (+290-pips) [final reward:risk 1.61]

- Long USDJPY from net 100.07, Stop at 101.10 (+103-pips locked-in), Target 1 at 100.65 HIT (+58-pips), Target 2 at 102.00 (+193-pips), Target 3 at 103.20 (+313-pips) [final reward:risk 2.32]

Typical Time Frame: 1-day to 1-week

The US Dollar is outperforming across the board today, truly a move that began yesterday afternoon and pushed my trades from pending to active. I'm trailing my stops on both the short AUDUSD and long USDJPY positions, watching the hourly 8-EMA as a guide (has been resistance in AUDUSD and support in USDJPY since the breakdown/out yesterday).

At this point, with +120-pips locked-in on AUDUSD and +103-pips locked-in on USDJPY, it's all about risk management at this point. I've added a target for USDJPY at 103.20, as I think this run up could extend into next week. I still plan on taking some profit at 102.00 as it remains channel resistance.

Are you new to FX or curious about your trading IQ?

As always, any other trade ideas and general macroeconomic musings can be found in the DailyFX Real Time News feed, or by following me on Stocktwits/Twitter @CVecchioFX.

I also host a weekly Live Trading Q&A in DailyFX Plus, on Tuesdays at 07:15 EST / 12:15 GMT, in which I delve deeper into my positions and thought processes behind my analyses.

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

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