Daily Briefing 101221

1.  Review.

I said “After bottoming at 1.3 the EURUSD rebound could be short lived. Probably the EUR is not stopping here and a real support could be the 1.27/8 level. So I would sell EURUSD on rallies, rather than buying on dips.” EURUSD rallied to 1.35, but then back to 1.3187. Rally was probably for negative US tax cut announcement. Any way the dollar ended at December highs at the end of the week. USDJPY is capped at 84.3/4 levels and a presumable top on US yields could put downside pressure on the pair.
Trades
Closed EURUSD long at 1.347 (-150 pips) and added a USDJPY long at 83.48.

2.  Analysis.

"Fundamental analysis data"
US Core retail sales, PPI and CPI were greater than expected
US unemployment claims were stable at 420k
ZEW (EU and German better than expected).
German ifo at highest levels (109) since German reunification in 1991.

"Fundamental analysis"
US tax cut: even if there was a USD sell off on the new, at the end the tax cut can be viewed positively because: 1) it can be viewed as another fiscal stimulus, improving the US growth and reducing the likelihood of QE3, a major dollar negative event. 2) a raise in the USD yields, supportive for the dollar and the prospect of a need of higher interest rates. In the near term FED assurance that interest rates will remain low, will add limit to the dollar upside.
EUR: a permanent resolution mechanism was agreed in case of sovereign debt crisis starting from 2013. Euro bong proposed idea need to mature again.
UK data was mixed, but the market focused on bad outlook and we believe further growth downside is ahead. Gold and silver remains a strong demand because of investor differentiations against fiat money.
Oil demand for 2011 was revisited at the upside, stockpiles are declined; oil price is revised on the upside in the next weeks.

"Technical analysis"
EURUSD bottomed at 1.313 after recovering to 1.34. A close below 1.31 would suggest a test of the 1.2970 level. A clear breakout will lead at the 1.26/7 area.
US yield looks like to have reached a top, confirmed by the USDJPY capped at 84.4
COT JPY up at 18k (-30k)
COT USD up to 30.4k (-16k)
COT EUR at 41.1k (+3k)
COT AUD up 74k (+17k)
TYN up to 3.32% (-0.2%)
JGB at 1.2% (+0.03%)
Bunds at 3.02%. (+0.8%)

German/Greece up to 8.89% (+0.1%)
VIX down to 16.1 (-2.2)
Gold/Oil up to 15.5 (-0.5)

"Market dynamics”
After bottoming at 1.3 the EURUSD rebound was short lived. Probably the EUR is not stopping here and a real support could be the 1.27/8 level. So I would sell EURUSD on rallies, rather than buying on dips. Especially on this December tiny and volatile market.

Median grid
EURUSD GRID 1.310 - 1.37, down bias
USDJPY GRID 80.00-84.00, up bias
AUDJPY GRID 73.00-81.00, long bias

Prices
US up at 1228, (+18, Q4)
GOLD to at 1375, (+25, Q4+)
Crude 88.6 (+0.3$)
EURUSD 1.3180 (-0. 08, Q1)
USDJPY 84.0 (-0.4, Q4)
AUDJPY 82.95 (+-0.9, Q4+)

3.  Plan
No big plans: try to fix the loss in EURUSD and square USDJPY

EURUSD
I will enter a short if resistance 1.34 holds and enter a short B&B on the yob level (1.3255) and maybe another lot at 1.3105. I will hedge on a couple of level up (-100 pips). I will take profit at 50-100 pips.
Comment:< >

USDJPY
I will add a dip: I will enter a long if support 82.5 holds and enter a long B&B on the yob level (83.17). I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips. Comment:< >

AUDJPY
Comment:< >

EURNOK
Comment:< >

4.  Trades
4.1 open trades, their type & their value:
1 Open 05-set-10 USDJPY L 84.2600 83.2600 Q1 0.2 B&B 84 -26.0000 -6

3 Open 13-dic-10 USDJPY L 83.4800 83.2600 Q1 0.2B&B 84 52.0000 5.2000 3.714.2
9 Open 29-nov-10 EURUSD S 1.3097 1.3247 Q2 0.2 Hedge (8) 1.3182 -85.0000 -8.5000
Leverage

Aggregate position size expressed as a gearing ratio (Ex = 3:1)

Total positions per currency:
USDJPY +2
EURUSD -1
AUDJPY 0
Position
USDJPY -6,+5
EURUSD -7
AUDJPY 0

4.3  Effect of planned trades

Account summary:
Saxo live account
Starting capital: 1000
Line in the sand level:  7500

1.  Account balance (Settled trades) and growth as a percentage.  (10032=0.3%)
2.  Account equity (Including open positions) .  (10019= +0.2%)
3.  Account equity if planned trades go wrong: 1011
4.  Pip distance to line in the sand level.  2500, with gear (0.2) 12000

Daily Briefing 101022

1.  Review.

I said “USD, that was supposed to go down, strengthen, suggesting a correction in extreme short positions. But this could end up in a significant shift in the market direction, as we see relative growth prospects in monetary policy as he ground for further USD strength. Growth slowdown is weighting on EUR and JPY.” USD recovered again versus EUR and JPY, with the Irish crisis still opened, but risk turned off at the end of the week, where EZ crisis looks under control. “Further USD strengthen suggest commodities and gold weakness in the week ahead. WTI reached pivotal 84-85$ prices; weakness below would suggest a decline to 80 level on next week”. Crude reached 80$ level and gold declined to 1330; rebound at the end of week “ I would expect both gold and crude to decline sustaining a strong USD. I think there is some guidance to exploit EZ sovereign debt during G20 (maximum exposure) to hide the QE2 effects, showing a strong US that is not. Then I will be long EUR if the 1.36 level holds and long USDJPY if dipping.”. 1.36 is holding, after a small dip at 1.3490, JPY did not dipped
Trades
Shorted EURUSD at 1.530, expecting a range to 1.34 but I closed with loss at 1.3670. Closed a USDJPY long from 83.25 at 83.5

2.  Analysis.

"Fundamental analysis data"
US retails sales: 1.2%, better than expected
AUD RBA minutes: rate hike was well pondered, a modest hike was prudent.
ZEW: EZ 13.8 against 2.3; German 1.8, against an expected -5; first increase since seven months. German GDP growth is expected to be 3.7%, faster growth since 1991.
USD PPI: 0.4% against a 0.7% reflecting low car, truck and computer demand. Low PPI keep a lid on lower inflation; Companies are not increasing prices but reducing off-the-shelf package size.
US TIC: long term securities purchases were 80bl against 100bl expected, low from previous 120bl reading
US CPI: 0% against expected 0.1%, to a record low inflation.
US unemployment claims: +2k to 439, less than expected 442k
US housing data weak down 11%. That is not helping employment and giving credit to QE.
US Philly Fed Manufacturing Index strong at 22, 4 times the expected value.
German PPI m/m: 0.4% as expected, that accelerate inflation in respect of previous year.
CNY CPI: 4.4% against 3.6% expected, that suggest a new RRR rate hike of 50 bps, expected end of year

"Fundamental analysis"
EUR industrial production for Q3 is suggesting a slowdown in EUR growth and this is still expected to be more in Q4. USD data was again more upbeat. Bernanke justify QE2 with these unemployment numbers. CNY rate hike announcement caused a small risk off but it was good digested by the market; good US data, no bad EZ, end of Irish crisis and QE2 free money are still supportive for risk on.
US yields increased and this could be supportive for the USD.
Risk about EZ peripherals countries is rising again (spreads and CDS rising again) caused EUR to move down in the 1.35 area. the Irish story is QUITE over and a rescue package is coming. BoJ is not intervening at these YEN level .

"Technical analysis"
USD gained further of the pre-QE2 levels after QE2 release losses, but lost gains at the end of week especially against EUR. EURUSD tumbled at 1.35. Support at 1.36 look like to hold. 1.36 area is still a key support for EUR, because is the area where started dipping in the 1.2 levels. COT data are below, basically flat. USD close to 78.5, sill above the 78.4 support, before resistance; USDJPY traded stable comfortably in the 82 area after weeks jumped in the 83 area. Again at this level BoJ would intervene if the 80 level will be broken. Gold all time highs at 1.3060; US futures stable again in to the 1180. GOLD/Oil ratio stable, little rising; VIX stable to low levels. 2.8 is a critical resistance for US yields, to be watched for the USDJPY correlation.
COT JPY up at 24.1k (-12k)
COT USD up to 10.6k (+2.2k)
COT EUR at 10.1k (-13kk)
COT AUD down 26.9k (-13k)
TYN up to 2.87% (+0.1%)
JGB at 1.07% (+0.03%)
Bunds at 2.7%. (+0.2%)
German/Greece up to 8.86% (-0.01%)
VIX down to 18.4 (-0.4)
Gold/Oil up to 16.5 (+3.8)

"Market dynamics”
Again this week USD, that was supposed to go down, strengthen, suggesting a correction in extreme short positions. Further US strengthen is expected in the week ahead, especially versus EUR if market shift attention to other peripherals or Spain. Further USD strengthen suggest commodities and gold weakness in the week ahead. WTI reached pivotal 84-85$ prices; weakness below would suggest a decline to 80 level on next week. I would expect both gold and crude decline to sustaining a strong USD. Anyway Dirk opinion is not to love too much USD beyond this Irish episode. I would agree more with this view if support holds and risk does not turn on. Then I will be long EUR is the 1.36 level holds and long USDJPY if dipping.

Median grid
EURUSD GRID 1.320 - 1.40, grid change up bias
USDJPY GRID 80.00-84.00, up bias
AUDJPY GRID 73.00-81.00, up bias

Prices
US up at 1197, (+3, Q4)
GOLD to at 1353, (-13, Q4)
Crude 81.8 (-3$)
EURUSD 1.375 (-0. 0, Q2)
USDJPY 83.56 (+1.0, Q4)
AUDJPY 82.38 (+-1.1 Q4)

3.  Plan
I will buy EURUSD +1 at these levels. 1.32/3 buffer. Still long USDJPY expecting BoJ intervention, but add stops. Buy a dip.

EURUSD
I will enter a long if support 1.355 holds and enter a long B&B on the yob level (1.3558) and another lot at 1.3707. I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips.
Comment:< >

USDJPY
I will add a dip: I will enter a long if support 82.5 holds and enter a long B&B on the yob level (82.67) and another lot at 2 you levels. I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips.
Comment:< >

AUDJPY
Comment:< >

EURNOK
Comment:< >

4.  Trades
4.1 open trades, their type & their value:
1 Open 05-set-10 USDJPY L 84.2600 83.2600 Q1 0.2 B&B 83.5-72.0000 -8.000
4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 3:1)

Total positions per currency:
USDJPY +1
EURUSD 0
AUDJPY 0
Position
USDJPY -8
EURUSD 0
AUDJPY 0

4.3  Effect of planned trades

Account summary:
Saxo live account
Starting capital: 1000
Line in the sand level:  7500
1.  Account balance (Settled trades) and growth as a percentage.  (10038=0.3%)
2.  Account equity (Including open positions) .  (10030= +0.3%)
3.  Account equity if planned trades go wrong: 1011
4.  Pip distance to line in the sand level.  6270, with gear (0.1) 12000

Daily Briefing 101015

1.  Review.

I said “FED announcement, dollar pumps and good far east data are basically set a risk on environment. This is also good for US stocks. But with late of week USD recovery and good data releases (ISM orders, NFP) I will go into next week with a USD cautiously optimistic view.” USD strengthened and risk was off due the Irish debt crisis and some CNY rite hike fears. “Recent QE2 may lead to further rise in commodities prices and then lead to higher inflation, especially in AUD. Further rate hikes are expected and the some AUD upside.” Gold surged but dropped sharply on the end of week. “Anyway there is a risk that G-20 meeting will give US a free pass to weaken further USD. I will monitor US official statements. EUR peripheral concerns are likely to come back in this year end. ECB confirmed exit strategy and FED dollar pumps in the market are strengthening the EURUSD, but I see difficult to maintain gains above 1.45. Anyway after QE2 even with good US data, I don’t expect that USD will be strong at the height of the PIIGS story (EURUSD 1.200).” EUR dropped to 1.36, a critical level before the EUR-goes-to-zero March story. “I think that BoJ will wait G-20 to apply a coordinate intervention.” It was. “The basic medium term view is a risk on through the end of the year, that can be stopped maybe for:
1. A unknown developing crisis (any of sort) – not yet
2. China will dip prices to reenter commodities at lower levels – rate hikes supposed, but anything of fear
3. The PIIGS story back if EURUSD will rise at uncomfortable levels of 1.5 – EUR dipped, probably all the story is priced in at 1.36 level”.
Trades
Closed the short EURUSD with profit. I was not able to pull the trigger for a USDJPY long at 80.7

2.  Analysis.

"Fundamental analysis data"
A quite light week:
Thursday CYN CPI: 4.4%, more than expected; this is suggesting there is no stress in China growth and that can cause a new rate hike.
Friday German GDP: 0.7%, slightly below consensus, but reading suggest Germany economy is booming
Friday US UoM consumer sentiment: 69.6, positive outlook thanks to improved job numbers.
Good employment data from AUD; bad industrial production numbers from JPY.
"Fundamental analysis"
Weak EUR industrial production for Q3 is suggesting a slowdown in EUR growth and this is expected to be more in Q4. USD data was more upbeat.

Good CNY data and QE2 free money are still supportive for risk on.
US yields increased and this could be supportive for the USD.
Risk about EZ peripherals countries is rising again (spreads and CDS rising again) caused EUR to move down in the 1.36 area. Probably the Irish story is all over and already full priced in. BoJ is not intervening

"Technical analysis"
USD gained further of the pre-QE2 levels after QE2 release losses. EURUSD tumbled at 1.37. Support at 1.3950 did not hold. 1.36 area is a key support for EUR, because is the area where started dipping in the 1.2 levels. COT data are below, basically flat. USD traded up to 78.2, close to the 78.4 resistance; USDJPY traded stable comfortably in the 82 area after weeks. Again at this level BoJ would intervene if the 80 level will be broken. Gold all time highs at 1.3060; US futures stable again in to the 1180. GOLD/Oil ratio stable, little rising; VIX stable to low levels. 2.8 is a critical resistance for US yields, to be watched for the USDJPY correlation.
COT JPY up at 44.1k (+0k)
COT USD up to 8.4k (+0k)
COT EUR at 35.1k (+0k)
COT AUD down 49.7k (+0k)
TYN up to 2.78% (+0.2%)
JGB at 1.03% (+0.1%)
Bunds at 2.5%. (+0.1%)

German/Greece up to 8.87% (-0.31%)
VIX down to 18.64 (+0.2)
Gold/Oil up to 16.1 (-1.4)

"Market dynamics”
USD supposed to go down strengthen, suggesting a correction in extreme short positions. But this could end up in a significant shift in the market direction, as we see relative growth prospects in monetary policy as he ground for further USD strength. Growth slowdown is weighting on EUR and JPY. Further USD strengthen suggest commodities and gold weakness in the week ahead. WTI reached pivotal 84-85$ prices; weakness below would suggest a decline to 80 level on next week. I would expect both gold and crude to decline sustaining a strong USD. I think there is some guidance to exploit EZ sovereign debt during G20 (maximum exposure) to hide the QE2 effects, showing a strong US that is not. Then I will be long EUR is the 1.36 level holds and long USDJPY if dipping.

Median grid
EURUSD GRID 1.340 - 1.42, up bias
USDJPY GRID 80.00-84.00, up bias
AUDJPY GRID 73.00-81.00, long bias

Prices
US up at 1194, (-30, Q4)
GOLD to at 1368, (-30, Q4+), all time high at 1422
Crude 84.8 (-3$)
EURUSD 1.369 (-0. 34, Q1)
USDJPY 82.56 (+1.3, Q2)
AUDJPY 81.25 (+-1, Q4)

3.  Plan
I will buy EURUSD +1 at these levels. 1.36/4 buffer. Still long USDJPY expecting BoJ intervention, but add stops. Buy a dip.

EURUSD
I will enter a long if support 1.355 holds and enter a long B&B on the yob level (1.3605) and another lot at 1.3755. I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips.
Comment:< >

USDJPY
I will add a dip: I will enter a long if support 81.5 holds and enter a long B&B on the yob level (1.3605) and another lot at 1.3755. I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips.
Comment:< >

AUDJPY
Comment:< >

EURNOK
Comment:< >

4.  Trades
4.1 open trades, their type & their value:
1 Open 05-set-10 USDJPY L 84.2600 83.2600 Q1 0.2 B&B 82.5 -176.0000 -12.9000
2 Open 07-ott-10 USDJPY L 82.3600 83.2600 Q1 0.2 B&B 82.5 +16.0000 +1.1000
4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 3:1)

Total positions per currency:
USDJPY +2
EURUSD 0
AUDJPY 0
Position
USDJPY -12.0, +1
EURUSD 0
AUDJPY 0

4.3  Effect of planned trades

Account summary:
Saxo live account
Starting capital: 1000
Line in the sand level:  7500

1.  Account balance (Settled trades) and growth as a percentage.  (10022=0.2%)
2.  Account equity (Including open positions) .  (1011= +0.1%)
3.  Account equity if planned trades go wrong: 1011
4.  Pip distance to line in the sand level.  6270, with gear (0.2) 12000

Daily Briefing 101025

1.  Review.

I said “QE2 (bond buy program to push interest rates low) effects: we will have more USD unwinding and USD strength if we will have a QE2 large or medium, stepped in. This because QE2 will move FED away from any interest rate hiking. US rates low and for longer will stay and put pressure on USD”. After a USD sell off, USD recovered pre-QE2 levels after good NFP data “ If QE2 is that small than big initial numbers, after a short rally and closer to the grid low is the announcement, we will see EUR back to the top side of the grid to the 1.41-2 levels” .We didn’t get it. “PIMCO comments that this could be the end of the bond bull market; QE2 is like to pay your debt not getting the money from new creditors (i.e. banks) but writing a new check from your own (worst than a Ponzi’s scheme…). Then hedge funds and Wall Street are seeking alpha returns in EM and commodities, selling USD for that, until they will be hurt so much.” TYN did not move that much, but we have to monitor the next week. “BoJ is still expected to intervene to use measures to get the market out from these levels. The market is positioned for the BoJ to do something but the BoJ would wait the FCOM decisions.” BoJ waited but didn’t acted.
Trades
Short EURUSD //TODO.

2.  Analysis.

"Fundamental analysis data"
Monday CNY manufacturing PMI accelerated in October, up for the third consecutive month in back of new stronger orders and productions. US ISM on Wednesday and Friday NFP payroll surprised at the upside.
Good CNY data where supportive for the surprising RBA interest rate hike. RBA concern of China sharp slowdown are receded.
"Fundamental analysis"
Some fundamental comments by Jack Crooks, to underlay a very broad perspective:
US$↓ = ∫(GC)≈ + QE2↑=+ EM ∞↑

GC = Global Cooperation, QE = Quantitative Easing, EM = Emerging Markets

It says that dollars goes lower if global cooperation does not go any better, QE2 is greater than expected and emerging markets continues to grow without bubble burst risk.

US$↑ = ∫(GC)↑or↓ » QE2 ≤+ EM∞ ↓global cooperation improves (between US and China), low QE2; If cooperation goes bad or emerging markets starts to burst the dollar will go high on risk off sentiment.

Bottom line: If the US continues to fuel risky asset prices the dollar will stay low. But this could be also an extreme sentiment of dollar bearishness that can finish as soon as someone is hurt on risky assets.
Good CNY data, RBA interest rate hike, QE2 free money are supportive for risk on.
Risk about EZ peripherals countries is rising again (spreads and CDS rising again) is capping potential EUR move over the 1.42 area.
BoJ is not intervening

"Technical analysis"
USD recovered at same pre-QE2 levels after QE2 release losses. EURUSD spiked at the 1.4280 level after QE2, but retraced to 1.4030 on good NFP data; I think current trading range is broken. Support at 1.3950 and resistance at 1.42. COT data are below. USD still trading 76-78 range, after a plunge at 75.5; USDJPY traded in a strict 81 area, making a fresh low at 80.35 and some stop hunting up and down. Again at this level BoJ would intervene if the 80 level will be broken. Gold all time highs at 1.3060; US futures stable again in to the 1180. GOLD/Oil ratio stable, little rising; VIX stable to low levels.
COT JPY up at 44.7k (+2.2k)
COT USD up to 8.4k (+3k)
COT EUR down to 35.1k (-3k)
COT AUD down 49.5k (- 6k)
TYN up to 2.51% (+0.5%)
JGB at 0.93% (-0.1%)
Bunds at 2.41%. (-0.1%)

German/Greece up to 9.1% (+1%)
VIX down to 18.2 (-3)
Gold/Oil down to 15.4 (-1.4)

"Market dynamics”
FED announcement, dollar pumps and good far east data are basically set a risk on environment. This is also good for US stocks. But with late of week USD recovery and good data releases (ISM orders, NFP) I will go into next week with a USD cautiously optimistic view. Recent QE2 may lead to further rise in commodities prices and then lead to higher inflation, especially in AUD. Further rate hikes are expected and the some AUD upside.
Anyway there is a risk that G-20 meeting will give US a free pass to weaken further USD. I will monitor US official statements. EUR peripheral concerns are likely to come back in this year end. ECB confirmed exit strategy and FED dollar pumps in the market are strengthening the EURUSD, but I see difficult to maintain gains above 1.45. Anyway after QE2 even with good US data, I don’t expect that USD will be strong at the height of the PIIGS story (EURUSD 1.200). I think that BoJ will wait G-20 to apply a coordinate intervention.
Th basic medium term view is a risk on through the end of the year, that can be stopped maybe for:
1. A unknown developing crisis (any of sort)
2. China will dip prices to reenter commodities at lower levels
3. The PIIGS story back if EURUSD will rise at uncomfortable levels of 1.5

Median grid
EURUSD GRID 1.340 - 1.42, up bias
USDJPY GRID 80.00-84.00, neutral bias
AUDJPY GRID 73.00-81.00, long bias

Prices
US up at 1222, (+40, Q4)
GOLD up to at 139 (+45$, Q4),
Crude 87.8 (+7$)
EURUSD 1.4031 (-0. 10, Q4)
USDJPY 81.26 (+0.9, Q2)
AUDJPY 82.5 (+2, Q4+)

3.  Plan
I will reverse the EURUSD -1 in +1 at these levels. I see risk on mode to leave roomfor the EUSUSD to go to 1.45. Still long USDJPY expecting BoJ intervention, but add stops.

EURUSD
I will exit the short if support 1.3950 holds and enter a long B&B on the yob level (1.3982) I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips. I will hedge on a couple of level down (-100 pips), before FCOM if reached.
Comment:< >

USDJPY
No more positions to add
Comment:< >

AUDJPY
Comment:< >

EURNOK
Comment:< >

4.  Trades
4.1 open trades, their type & their value:
1 Open 05-set-10 USDJPY L 84.2600 83.2600 Q1 0.2 B&B 81.3 -297.0000 -21.9000
2 Open 07-ott-10 USDJPY L 82.3600 83.2600 Q1 0.2 B&B 81.3 -107.0000-7.9000
5 Open 31-ott-10 EURUS S 1.3968 1.3818 Q4 0.2 Contra 1.4031 -63.0000 -6.3000 -4.49
4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 3:1)

Total positions per currency:
USDJPY +2
EURUSD 0
AUDJPY 0
Position
USDJPY -27.0, -13
EURUSD 0
AUDJPY 0

4.3  Effect of planned trades

Account summary:
Saxo live account
Starting capital: 1000
Line in the sand level:  7500

1.  Account balance (Settled trades) and growth as a percentage.  (9979=-0.15%)
2.  Account equity (Including open positions) .  (9938= -0.6%)
3.  Account equity if planned trades go wrong: 9939
4.  Pip distance to line in the sand level.  6200, with gear (0.2) 12000

Daily Briefing 101025

1.  Review.

I said “It should be a trading range for EURUSD between 1.40 and 1.38, waiting the FCOM announcement” It was that. “Probably investor are already placed for November 3 Fed meeting and now there will be a wait-and-see mode” It was basically a trading range week. Even if risk is on, I will expect potential further up move for EURUSD not exceeding the 1.41/1.42 levels, but probably a trading range around the 1.38 level as a consolidation”. Range was still centered on 1.39. “QE2 will be supportive for risk on because it will give money to big guys to invest in risky markets; so I am long of risk currency against USD (not JPY).” Riks assets were instead sold off. “I will look to spread Greek German bonds and US, JGB in general”. Greece spread recovered to 8.04 “Unilateral BoJ intervention is expected again, especially if prices drops below 80 handle. I will put ISDJPY stops t protect against USDJPY weakness.” USDJPY traded around 81 handle and no with no BoJ intervention.
Trades
No trades. I was not able from the expected trading range environment.

2.  Analysis.

"Fundamental analysis"
Some comments about interest rates: in the past interest rates levels were used to gauge economy recover or recession; now with zero interest level rates this pricing is gone and everyone is guessing on almost anything. This is causing a wild market volatility. G20 meeting was not causing surprises: everyone recognized the central banks should refrain from competitive devaluation; zero interest rates are causing problems to EM; US rhetoric says that US is supportive versus a strong dollar.
Risk about EZ peripherals countries is rising again (spreads and CDS rising again) is capping potential EUR move over the 1.42 area.
BoJ is not intervening but the 80-85 are is the line in the sand. BoJ knows how to manage yen at sub 90 level, but not in the sub 80 levels. Buying of Japan assets over the JPY 5 tritons could trigger JPY weakness.
QE2 looks like to be already factored in price so new expectation of 500 billion in six months is causing some USD unwinding. This QE2 size is expected to have the effect of a half-three quarter point interest rate reduction. Advance in GDP is still low in the third quarter at 2.0%

"Technical analysis"
EURUSD traded again at the 1.39 levels, with a short sell off at 1.37; lack of risk off data and wait for FED meeting probably will bring to a trading range again in the beginning of the next week; because is expected a trading range there will be some stop hunting at the extremes. Support at 1.38 and resistance at 1.42. COT data are below. USD still trading 77-78 range; USDJPY traded in a strict 81 area, making a fresh low at 80.35 and some stop hunting up and down. Again at this level BoJ would intervene if the 80 level will be broken. Gold again at 1.3060; US futures stable again in to the 1180. GOLD/Oil ratio stable, little rising; VIX stable to low levels.
COT JPY down at 41.7k (-2.2k)
COT USD up to 5.4k (+2.4k)
COT EUR up to 38.1k (-8k)
COT AUD down 55.5k (- 4k)
TYN up to 2.61% (+0.5%)
JGB up to 0.94% (+0.4%)
Bunds up to 2.51%. (+0.4%)

German/Greece up to 8.1% (+1.3%)
VIX up to 21.2 (+2.5)
Gold/Oil up to 16.63 (+0.4)

"Market dynamics”
QE2 (bond buy program to push interest rates low) effects: we will have more USD unwinding and USD strength if we will have a QE2 large or medium, stepped in. This because QE2 will move FED away from any interest rate hiking. US rates low and for longer will stay and put pressure on USD. If QE2 is that small than big initial numbers, after a short rally and closer to the grid low is the announcement, we will see EUR back to the top side of the grid to the 1.41-2 levels. PIMCO comments that this could be the end of the bond bull market; QE2 is like to pay your debt not getting the money from new creditors (i.e. banks) but writing a new check from your own (worst than a Ponzi’s scheme…). Then hedge funds and Wall Street are seeking alpha returns in EM and commodities, selling USD for that.
BoJ is still expected to intervene to use measures to get the market out from these levels. The market is positioned for the BoJ to do something but the BoJ would wait the FCOM decisions.

Median grid
EURUSD GRID 1.340 - 1.42, up bias
USDJPY GRID 84.00-88.00, neutral bias
AUDJPY GRID 73.00-81.00, long bias

Prices
US up at 1187 , (+13, Q3)
GOLD down at 1358 (+30$, Q4),
Crude 81.8 (0$)
EURUSD 1.3945 (-0. 010, Q3)
USDJPY 80.33(-1.0, Q2)

3.  Plan
I will try to profit from this expected trading range, entering long EURUSD on dips and selling highs till FCOM announcement, positioned with a long EUR at the low grid level. Still long USDJPY expecting BoJ intervention, but add stops.

EURUSD
I will enter a quick short B&B on the yob level (1.3982) I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips. I will enter a long on the yob level (1.3757) I will hedge on a couple of level down (-100 pips), before FCOM if reached.
Comment:< >

USDJPY
No more positions to add
Comment:< Still underwater…>

AUDJPY
Comment:< >

EURNOK
Comment:< >

4.  Trades
4.1 open trades, their type & their value:
1 Open 05-set-10 USDJPY L 84.2600 83.2600 Q1 0.2 B&B 80.5 -370.0000 -27.9000
Open 07-ott-10 USDJPY L 82.3600 83.2600 Q1 0.2 B&B 80.5 -186.0000-13.9000
4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 3:1)

Total positions per currency:
USDJPY +2
EURUSD 0
AUDJPY 0
Position
USDJPY -27.0, -13
EURUSD 0
AUDJPY 0

4.3  Effect of planned trades

Account summary:
Saxo live account
Starting capital: 1000
Line in the sand level:  7500

1.  Account balance (Settled trades) and growth as a percentage.  (9979=-0.15%)
2.  Account equity (Including open positions) .  (9938= -0.6%)
3.  Account equity if planned trades go wrong: 9939
4.  Pip distance to line in the sand level.  6200, with gear (0.2) 12000

Daily Briefing 101025

1.  Review.

I said “Prices did not move against USD after the Friday QE2 confirmation, suggesting again the QE2 expectation is already priced and maybe it will stop the USD weakness temporarily. A sharp drop in CRB and risk index could confirm this”. USD dropped in for a couple of days, but recovered then to the beginning of the week levels. CRB dropped a little “Probably investor are already placed for November 3 Fed meeting and now there will be a wait-and-see mode” It was basically a trading range week. Even if risk is on, I will expect potential further up move for EURUSD not exceeding the 1.41/1.42 levels, but probably a trading range around the 1.38 level as a consolidation, as grid mean (but end of year outlook is 1.45/1.5)”. Range was more center on 1.39 level than 1.38. “QE2 will be supportive for risk on because it will give money to big guys to invest in risky markets; so I am long of risk currency against USD (not JPY). Maybe it will be less stronger than QE1 because the expectations are like this” Investors are still waiting Nov 3 FED. I will look to spread Greek German bonds and US, JGB in general”. TYN recovered from the historical lows to 2.55. “Unilateral BoJ intervention is expected again, especially if prices drops below 80 handle. I will put ISDJPY stops t protect against USDJPY weakness.” USDJPY traded around 81 handle and no with no BoJ intervention.
Trades
No trades

2.  Analysis.

"Fundamental analysis"
Data from US were better than expected; this caused a some USD strength with some profit taking due to a high exposure to USD shorts; probably FED will have a QE2 incremental approach and thus QE2 is already priced now. We have to wait November 3 FED meeting to be sure that there will not be more USD lows. In case of the expected QE2 this could be a catalyst for USD rebound. Probably a cold QE2 will cause a nice dip to buy EUR. EUR data ZEW was better than expected, to confirm German recovery even at this EUR levels. China increase of interest rate is a good move to cool down growth to avoid overheating and avoid bubble burst. This would lead to a conviction that recovery could be in place even without US spending.

"Technical analysis"
EURUSD traded at the 1.39 levels, with a short sell off at 1.37; lack of risk off data and wit for FED meeting probably will bring to a trading range in the next week; because is expected a trading range there will be some stop hunting at the extremes. COT data are below. USD still trading 77-78 range; USDJPY traded in a strict 81 area, making a fresh low at 80.85 and some stop hunting up and down. Again at this level BoJ would intervene if the 80 level will be broken. Gold sell of till 1.3000; US futures raised again in to the 1180. GOLD/Oil ratio stable; VIX stable to low levels.
COT JPY stable at 43.7k (-2.2k)
COT USD up to 3.4k (+4k)
COT EUR up to 45.1k (+3.5k)
COT AUD down 59.5k (-8k)
TYN stable at 2.55% (+0%)
JGB stable at 0.89% (0.01%)
Bunds up to 2.47%. (+0.1%)

German/Greece up to 6.8% (-0.3%)
VIX down to 18.7 (-0.5)
Gold/Oil stable to 16.2 (-0.6)

"Market dynamics”

Median grid
EURUSD GRID 1.340 - 1.42, up bias
USDJPY GRID 84.00-88.00, neutral bias
AUDJPY GRID 73.00-81.00, long bias

Prices
US up at 1174 , (+30, Q2)
GOLD down at 1328 (-40$, Q4),
Crude 81.8 (0$)
EURUSD 1.3955 (+0. 020, Q3)
USDJPY 81.43(-0.10, Q2)

3.  Plan
I will try to profit from this expected trading range, entering long EURUSD on dips and selling highs. Still long USDJPY expecting BoJ intervention, but add stops

EURUSD
I will enter a long B&B on the yob level (1.3757) I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips. I will enter a short B&B on the yob level (1.4057) I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips
Comment:< >

USDJPY
No more positions to add
Comment:< Still underwater…>

AUDJPY
Comment:< >

EURNOK
Comment:< >

4.  Trades
4.1 open trades, their type & their value:
1 Open 05-set-10 USDJPY L 84.2600 83.2600 Q1 0.2 B&B 81.37 -289.0000 -28.9000 -20.7
Open 07-ott-10 USDJPY L 82.3600 83.2600 Q1 0.2 B&B 81.37 -99.0000-9.9000 -7.24
4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 3:1)

Total positions per currency:
USDJPY +2
EURUSD 0
AUDJPY 0
Position
USDJPY -29.0, -8
EURUSD 0
AUDJPY 0

4.3  Effect of planned trades

Account summary:
Saxo live account
Starting capital: 1000
Line in the sand level:  7500

1.  Account balance (Settled trades) and growth as a percentage.  (9985=-0.15%)
2.  Account equity (Including open positions) .  (9978= -0.25%)
3.  Account equity if planned trades go wrong: 9973
4.  Pip distance to line in the sand level.  2475, with gear (0.2) 12000

Daily Briefing 101018

1.  Review.
I said “Prices did not move against USD after the NFP, maybe the QE2 expectation is already priced and maybe it will stop the USD weakness temporarily. I will not expect potential further up move for EURUSD to the 1.4 but a trading range around the 1.38 level as a consolidation” Price instead went to 1.415, but returned to beginning of week level, maybe suggesting that QE2 is priced in, after the Friday announcement that QE2 is coming. “I will be data watching to see Fed reaction for confirmation QE and for risk on support. QE2 will be supportive for risk on because it will give money to big guys to invest in risky markets. Maybe it will be less stronger than QE1 because the expectations are like this. I will look to spread Greek German bonds” Spread decreased and market seems do not care about European sovereign debt  for the moment. “and US, JGB in general.” That  remains at historical lows, probably because lot of money is parking there waiting for QE2 “Unilateral BoJ intervention is expected again, especially if prices drops below 82 handle.” Price reached 80.93 but no intervention
Trades
No trades
2.  Analysis.
"Fundamental analysis"
Lack of immanent bad news and Greece bond spread lowering reinforced a risk on bias. Disclosure of QE2 (even if not the entity) caused some profit taking but it is good for risk (basically free money to put in risky trades) . Stocks are up, mainly for the same reason because employment data still suggest that economy is not recovering.  Lack of JPY carry trades caused JPY to strengthen again; it needs interest differential  to change after some good US job reports. Total lack of bad news from risk generator events (PIIGS and China bubble, confirmed by a cooled trade balance data) are driving a risk on, essentially good for currencies versus USD.
"Technical analysis"
EURUSD broke  the 1.40 levels; the move could still have a correction, because the move was quick and strong, mainly because of lack of risk off data. COT data are below. USD still trading 77-78; USDJPY traded in the 82-81 area, making a fresh low at 80.93. Probably *again( at this level BoJ would intervene. US futures jumped again in to the 1170, closing above 100 and 200 MA: it look like a break to new  highs. GOLD/Oil ratio stable;  VIX stable to low levels.
COT JPY stable at 45.9k (+0k)
COT USD stable at -1.4k (-0.1k)
COT EUR down to 41.5k (-7k)
COT AUD down 67.5k (-2k)
TYN up to 2.55% (+0.15%)
JGB stable at 0.88% (0.01%)
Bunds up to 2.37%. (+0.12%)
German/Greece down to 6.5% (-1%)
VIX down to 19.03 (-1.25)
Gold/Oil up to 16.8 (+0.6)

"Market dynamics”
Prices did not move against USD after the Friday QE2 confirmation, suggesting again the QE2 expectation is already priced and maybe it will stop the USD weakness temporarily. A sharp drop in CRB and risk index could confirm this. Probably investor are already placed for November 3 Fed meeting and now there will be a wait-and-see mode. Even if risk is on, I will expect potential further up move for EURUSD not exceeding the 1.41/1.42 levels, but probably a trading range around the 1.38 level as a consolidation, as grid mean (but end of year outlook is 1.45/1.5). QE2 will be supportive for risk on because it will give money to big guys to invest in risky markets; so I am long of risk currency against USD (not JPY). Maybe it will be less stronger than QE1 because the expectations are like this. I will look to spread Greek German bonds and US, JGB in general. Unilateral BoJ intervention is expected again, especially if prices drops below 80 handle. I will put ISDJPY stops t protect against USDJPY weakness.

Median grid
EURUSD GRID 1.340 - 1.42, (grid change), up bias
USDJPY GRID 84.00-88.00, neutral bias
AUDJPY GRID 73.00-81.00, long bias

Prices
US  up at 1174 , (+30, Q2)
GOLD up at 1368 (+30$, Q4+), all time high
Crude 81.4 (-1$)
EURUSD 1.3975 (+0. 040, Q3)
USDJPY 81.46(-0.30, Q2)

3.  Plan
I will try again profit of this risk on sentiment, entering long EURUSD on dips; prudence at these lofty levels. Still long USDJPY expecting BoJ intervention, but add stops

EURUSD
I will enter a long B&B on the yob level (1.3730) as retracement after a 1.3900 clear break; I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips
Comment:<I did a short instead >

USDJPY
Comment:< Still underwater…>

AUDJPY
Comment:< >

EURNOK
Comment:< >
4.  Trades
4.1 open trades, their type & their value:

1 Open    05-set-10 USDJPY L 84.2600 83.2600 Q1 0.2 B&B 81.47    -279.0000 -27.9000 -19.932
Open    07-ott-10 USDJPY L 82.3600 83.2600 Q1 0.2 B&B 81.47    -89.0000-8.9000 -6.36
4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 3:1)
Total positions per currency:
USDJPY  +2
EURUSD 0
AUDJPY 0
Position
USDJPY -28.0, -7
EURUSD 0
AUDJPY 0

4.3  Effect of planned trades

Account summary:
Saxo live account
Starting capital: 1000
Line in the sand level:  7500
1.  Account balance (Settled trades) and growth as a percentage.  (9985=-0.15%)
2.  Account equity (Including open positions) .  (9978= -0.25%)
3.  Account equity if planned trades go wrong: 9973
4.  Pip distance to line in the sand level.   2475, with gear (0.2) 12000

Daily Briefing 101011

1.  Review.

I said “I will look for potential further up move for EURUSD to the 1.4 area and a break of the 1.35 level would be a potential for a consolidation”. EURUSD reached the 1.4026 and retraced to 1.3900 after NFP; it looks like a consolidation move around those values. USD was under pressure waiting for a non good <nfp announcing a new QE2. “Price is pricing US QE expectation, then I will be data watching to see Fed reaction for QE and for risk on support. I will look to spread Greek German bonds and US, JGB in general.” Greece bonds spread deceased and JGB and US 10 years are at historical low. “ Unilateral BoJ intervention is expected again. After the 83.6 test I do not expect to be broken if data will be good for risk on.” BoJ announced further policy stimulus but the market did not paid attention to it. ” Friday job report could be a driver event for USD weakness.” After a USD selloff spike prices did not move that much after announcement.
Trades
EURUSD contra trade short at 1.396 and another long <USDLPY at 83.30 (this bet on JPY weakness is costing me a lot of money).

2.  Analysis.

"Fundamental analysis"
Lack of immanent bad new drove the EUR up to 1.4, mostly a lack of risk off derivers. Bad US NFP, last before next FCOM meeting is viewed as a confirm for the next QE2. Good data came from German industrial production; best then expected AUD employment data support risk on environment. USD and JPY rates are at lowest levels. Lack of use of JPY as carry currency is something new to be watched; maybe USD only is enough to do carry trades. Total lack of bad news from risk generator events (PIIGS and China bubble) are driving a risk on, essentially good for currencies versus USD.

"Technical analysis"
EURUSD tested the 1.40 levels; the move could have a correction, because the move was quick and strong, mainly because of lack of risk off data. COT data are below. USD index broke the 80 support area and is trading 77-78; USDJPY traded in the 82-83 area, making a fresh low at 81.75. Probably at this level BoJ would intervene. US futures jumped again in to the 1140, closing above 100 and 200 MA: it look like a break to new highs. GOLD/Oil ratio stable; VIX stable to low levels.
COT JPY up at 45.9k (+15k)
COT USD down at -1.5k (-3k)
COT EUR up to 48.5k (+7k)
COT stable AUD 69.5k
TYN down to 2.39%
JGB down to 0.87%
Bunds down to 2.25%.

German/Greece down to 7.5%
VIX down to 20.71
Gold/Oil down to 16.25

"Market dynamics”
Prices did not move against USD after the NFP, maybe the QE2 expectation is already priced and maybe it will stop the USD weakness temporarily. I will not expect potential further up move for EURUSD to the 1.4 but a trading range around the 1.38 level as a consolidation, waiting for more QE2 confirmation, for the moment (but end of year outlook is 1.45/1.5). I will be data watching to see Fed reaction for confirmation QE and for risk on support. QE2 will be supportive for risk on because it will give money to big guys to invest in risky markets. Maybe it will be less stronger than QE1 because the expectations are like this. I will look to spread Greek German bonds and US, JGB in general. Unilateral BoJ intervention is expected again, especially if prices drops below 82 handle.

Median grid
EURUSD GRID 1.340 - 1.42, (grid change), up bias
USDJPY GRID 84.00-88.00, neutral bias
AUDJPY GRID 73.00-81.00, long bias

Prices
US up at 1160 , (Q1)
GOLD up at 1346 (Q4), all time high
Crude 82.81
EURUSD 1.3933 (Q3)
USDJPY 81.91(Q1--)

3.  Plan
I will try again profit of this risk on sentiment, entering long EURUSD on dips; prudence at these lofty levels. long USDJPY expecting BoJ intervention

EURUSD
I will enter a long B&B on the yob level (1.3730) as retracement after a 1.3900 clear break; I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips
Comment:< >

USDJPY
Comment:< >

AUDJPY
Comment:< >

EURNOK
Comment:< >

4.  Trades
4.1 open trades, their type & their value:
3 Open 07-ott-10 EURUSD S 1.3970 1.3820 Q2 0.2 Contra 1.3933 37.0000 3.7000 2.66
1 Open 05-set-10 USDJPY L 84.2600 83.2600 Q1 0.2 B&B 81.92 -252.0000 -25.2000 -16.7

2 Open 07-ott-10 USDJPY L 82.3600 83.2600 Q1 0.2 B&B 81.91 -45.0000 -4.5000 -3.21
4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 3:1)

Total positions per currency:
USDJPY +2
EURUSD +1
AUDJPY 0
Position
USDJPY -16.0, -3.2
EURUSD +2.66
AUDJPY 0

4.3  Effect of planned trades

Account summary:
Saxo live account
Starting capital: 1000
Line in the sand level:  7500

1.  Account balance (Settled trades) and growth as a percentage.  (9985=-0.15%)
2.  Account equity (Including open positions) .  (9978= -0.25%)
3.  Account equity if planned trades go wrong: 9973
4.  Pip distance to line in the sand level.  2475, with gear (0.2) 12000

Daily Briefing 101004

1.  Review.

I was away from markets for a couple of weeks. I need to reenter and get the feeling of what is going on
Trades
No new trades this week.

2.  Analysis.

"Fundamental analysis"
Data confirmed a reverse in short term market sentiment to risk on, even with bad US data. Tuesday bad US consumer confidence index acted as catalyst for USD selling. Markets gave to Ireland a rest but Spain economy is getting worse and if it will be the next target it will put lot of pressure on EUR; Greece spread decreased, but sovereign default are not imminent to send EUR to zero. Good data should be risk on positive until the US is out of double dip risk, then USD differential should play in favor of the USD.

"Technical analysis"
EURUSD trended quickly to the 1.37 levels; the move could be have a correction, even with no real data to support. COT data are below. USD index broke the 80 support area and is trading 81-82; USDJPY traded in the 78 area, making a fresh low at 78.22. Probably is staying down here in these dips. US futures jumped again in to the 1140, closing above 100 and 200 MA: it look like a break to new highs. GOLD/Oil ratio stable; VIX stable to low levels.
COT JPY down at 28.9k
COT USD down at 1.3k
COT EUR up to 35.5k
COT AUD 69.5k
TYN down to 2.5%
JGB down to 0.96%
Bunds down to 2.28%.

German/Greece down to 7.85%
VIX stable to 22.5
Gold/Oil down to 16.1

"Market dynamics”
I will look for potential further up move for EURUSD to the 1.4 area and a break of the 1.35 level would be a potential for a consolidation. Price is pricing US QE expectation, then I will be data watching to see Fed reaction for QE and for risk on support. I will look to spread Greek German bonds and US, JGB in general. Unilateral BoJ intervention is expected again. After the 83.6 test I do not expect to be broken if data will be good for risk on. Friday job report could be a driver event for USD weakness.

Median grid
EURUSD GRID 1.320 - 1.380, (grid change), up bias
USDJPY GRID 84.00-88.00, neutral bias
AUDJPY GRID 73.00-81.00, short bias

Prices
US up at 1140, (Q4)
GOLD up at 1308 (Q4+), all time high
Crude 81.27
EURUSD 1.2375 (Q4)
USDJPY 83.28(Q1)

3.  Plan
I will try again profit of this risk on sentiment, entering long EURUSD on dips and log USDJPY expecting BoJ intervention

EURUSD
I will enter a long B&B on the yob level (1.3658) as retracement after a 1.3800 clear break; I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips
Comment:<No retracement >

USDJPY
Comment:< >

AUDJPY
Comment:< >

EURNOK
Comment:< >

4.  Trades
4.1 open trades, their type & their value:
2 Open 13-ago-10 EURUSD L 1.2873 1.1673 Q3 0.2 B&B 1.2724 -149.0000 -14.9000 -11.71
1 Open 05-set-10 USDJPY L 84.2600 83.2600 Q1 0.2 B&B 83.32 -92.0000 -9.2000 0.00

4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 4:1)

Total positions per currency:
USDJPY +1
EURUSD 0
AUDJPY 0
Position
USDJPY -9.0
EURUSD 0
AUDJPY 0

4.3  Effect of planned trades

Account summary:
Saxo live account
Starting capital: 1000
Line in the sand level:  7500

1.  Account balance (Settled trades) and growth as a percentage.  (9985=-0.15%)
2.  Account equity (Including open positions) .  (9975= -0.25%)
3.  Account equity if planned trades go wrong: 9973
4.  Pip distance to line in the sand level.  2475, with gear (0.2) 12000

Daily Briefing 100913

1.  Review.

I wrote “I will expect action should move from intraday related moves”. It was a quiet and small ranging week. ” I will be data watching to see Fed reaction for QE and for risk on support”. Data showed positive sign for the risk on theme. I will look to spread Greek German bonds and US, JGB in general. Regarding JPY and BoJ intervention I will monitor USDJPY price action during any risk off & risk on events. Unilateral BoJ intervention will be unlikely. Probably we can see a 83.6 test but I do not expect to be broken if data will be good for risk on.” New fresh low for JPY crosses. Rumors of BoJ intervention are at 82 level
Trades
No new trades this week.

2.  Analysis.

"Fundamental analysis"
Data confirmed a reverse in short term market sentiment to risk on. AUD employment more than expected, BoC hiked interest rates. China should be buying AUD, that is good for risk positive. They are diversifying between crosses. Rumors about PIIGS put pressure on EUR; Greece is the only real issue, CDs and Bund spread increased (to May levels), but sovereign default are not imminent to send EUR to zero. Good data should be risk on positive until the US is out of double dip risk, then USD differentioal should play in favor of the USD.

"Technical analysis"
EURUSD traded around the 1.26 levels, in a 200 pips range; no further downside or the next stop is 1.24. COT data are below. USD index hold in the 80 support area but upside was limited and is trading 81-82; USDJPY traded in the 84 area, making a fresh low at 83.34. Probably is staying down here in these dips. US futures jumped in three days to the 1140, closing above 100 and 200 MA: need to see if only a range bound move or will break to new highs. GOLD/Oil ratio raised; VIX fell to lowest levels.
COT JPY stable at 49.9k
COT USD stable at 14.3k
COT EUR down to -23.5k
COT AUD 57k
TYN up to 2.8%
JGB up to 1.16%
Bunds up to 2.4%.

German/Greece up to 9.33%
VIX down to 21.99
Gold/Oil down to 16.3

"Market dynamics”
September is historically an underperforming month for stock; consider this if anything new, but only stock prices will determine market sentiment drive. I expect again that price moves will be more significant and should move from intraday related moves. I will expect that on further good data USD and JPY will be under pressure because of the risk on drive. I will be data watching to see Fed reaction for QE and for risk on support. I will look to spread Greek German bonds and US, JGB in general. USDJPY price action was quite stable at 84-83 while yield felt from 2.90 to 2.42, now back to 2.70 during the risk off events. Unilateral BoJ intervention will be unlikely. After the 83.6 test I do not expect to be broken if data will be good for risk on.

Median grid
EURUSD GRID 1.240 - 1.310, (grid change), up bias
USDJPY GRID 84.00-88.00, neutral bias
AUDJPY GRID 73.00-81.00, short bias

Basically still a risk-off bias by the end of week

Prices
US up at 1140, (Q4)
GOLD up at 1249 (Q3)
Crude 74.27
EURUSD 1.2708 (Q3)
USDJPY 84.28(Q1)

3.  Plan
I will try again profit of this risk on sentiment, even if uncertain entering long EURUSD and USDJPY

EURUSD
I will enter a long B&B on the yob level (1.2888) as retracement after a 1.2900 clear break; I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips
Comment:<No retracement >

USDJPY
Comment:< >

AUDJPY
Comment:< >

EURNOK
Comment:< >

4.  Trades
4.1 open trades, their type & their value:
2 Open 13-ago-10 EURUSD L 1.2873 1.1673 Q3 0.2 B&B 1.2724 -149.0000 -14.9000 -11.71
1 Open 05-set-10 USDJPY L 84.2600 83.2600 Q1 0.2 B&B 84.28 2.0000 0.2000 0.00

4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 4:1)

Total positions per currency:
USDJPY +1
EURUSD +1
AUDJPY 0
Position
USDJPY -0
EURUSD -11.7
AUDJPY 0

4.3  Effect of planned trades

Account summary:
Saxo live account
Starting capital: 1000
Line in the sand level:  7500

1.  Account balance (Settled trades) and growth as a percentage.  (9985=-0.15%)
2.  Account equity (Including open positions) .  (9975= -0.25%)
3.  Account equity if planned trades go wrong: 9973
4.  Pip distance to line in the sand level.  2475, with gear (0.2) 12000

Daily Briefing 100906

1.  Review.

I wrote “EUR felled very quickly; 1.28 first support area looks like broken, next will be 1.24.” 1.26 level hold and now EURUSD is back to 1.2890. “Spread Greek German bonds should be monitored and can sustain negative EUR action.” Spread fall late in the week. “ Short term financial data look like not supportive for EUR. I will watch closely the 1.28 support to confirm the EUR bullish sentiment.” German data are still supporting EURUSD “Regarding JPY and BoJ intervention I will monitor again JGB yields, US 10 yr yields, German bund yields and USDJPY price action during any risk off & risk on events. Those data will help to determine if JPY has bottomed.” BoJ supported some QE but the market ignored. USDJPY spiked on risk on event on Friday, but retraced as usual. Yields in safe haven increased confirming the risk on sentiment on Friday data. Prices and volatility were still in a tiny market.
Trades
I switched to my Saxo account. I opened EURUSD and USDJPY longs after Friday NFP.

2.  Analysis.

"Fundamental analysis"
Last week was characterized by Friday good employment NFP US data that confirmed a reverse in short term market sentiment to risk on. Better than expected AUD Q2 GDP, CNY data that confirmed a not too fast growth; but some bad data from German PMI, that is a serious not good for interest differential in favor of EUR. Large portion of the EZ is doing ok. All these weeks were in a tiny market action. Normal liquidity should return next week. Still valid that BoJ intervention is linked to US growth; if positive data JPY would weaken without need of intervention, but strong JPY could stay for a long time. Important from Fed meeting: Fed will be data watching; QE will be implemented only if data will be bad.

"Technical analysis"
EURUSD felled at the 1.26 levels, and then back to 1.28; no further downside to the next stop is 1.24. COT data are below. USD index hold in the 80 support area but upside was limited; USDJPY traded in the 84 area. Probably is staying down here in these dips. US futures jumped in three days to the 1100, closing above 100 and 200 MA: need to see if only a range bound move or will break to new highs. GOLD/Oil ratio raised; VIX fell to lowest levels.
COT JPY stable at 49.9k
COT USD stable at 14.9k
COT EUR down to -25.5k
COT AUD 43k
TYN up to 2.69%
JGB up to 1.14%
Bunds up to 2.35%.

German/Greece down to 8.86%
VIX down to 21.31
Gold/Oil up to 16.7

"Market dynamics”
Again I say that these days are more oriented for a short term approach based on risk-on/off. I expect that price moves will be more significant and probably we should not see any more data spike and retracement. I will expect action should move from intraday related moves. I will be data watching to see Fed reaction for QE and for risk on support. I will look to spread Greek German bonds and US, JGB in general. Regarding JPY and BoJ intervention I will monitor USDJPY price action during any risk off & risk on events. Unilateral BoJ intervention will be unlikely. Probably we can see a 83.6 test but I do not expect to be broken if data will be good for risk on.

Median grid
EURUSD GRID 1.240 - 1.310, (grid change), up bias
USDJPY GRID 84.00-88.00, neutral bias
AUDJPY GRID 73.00-81.00, short bias

Basically still a risk-off bias by the end of week

Prices
US down at 1077, (Q2)
GOLD up at 1246 (Q3)
Crude 74.27
EURUSD 1.2895 (Q3)
USDJPY 84.34(Q1)

3.  Plan
I will try again profit of this risk on sentiment, even if uncertain entering long EURUSD and USDJPY

EURUSD
I will enter a long B&B on the yob level (1.2888) as retracement after a 1.2900 clear break; I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips
Comment:< >

USDJPY
Comment:< >

AUDJPY
Comment:< >

EURNOK
Comment:< >

4.  Trades
4.1 open trades, their type & their value:
2 Open 13-ago-10 EURUSD L 1.2873 1.1673 Q3 0.2 B&B 1.2749 -124.0000 -12.4000 -9.73
1 Open 05-set-10 USDJPY L 84.2600 83.2600 Q1 0.2 B&B 84.1 -16.0000 -1.6000 -0.02

4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 4:1)

Total positions per currency:
USDJPY +1
EURUSD +1
AUDJPY 0
Position
USDJPY -0
EURUSD -9.7
AUDJPY 0

4.3  Effect of planned trades

Account summary:
Saxo live account
Starting capital: 1000
Line in the sand level:  7500

1.  Account balance (Settled trades) and growth as a percentage.  (9985=-0.15%)
2.  Account equity (Including open positions) .  (9975= -0.25%)
3.  Account equity if planned trades go wrong: 9973
4.  Pip distance to line in the sand level.  2475, with gear (0.2) 12000

Daily Briefing 100823

1.  Review.

I wrote “Even if a consider that one should more focused on interest differentials these days are more oriented for a short term approach based on risk-on/off. USD weakness looks like already priced, but further slowdown could be led to EUR strength (WA says after price is bottomed 1.24). EUR felled very quickly; 1.28 is a first support area, next will be 1.24.” Bad US data make the EUR fell to 1.27 breaking the 1.28 support level. “Irish bond auction should be monitored on Tuesday to see risk sentiment against EUR and CDS for Irish bonds. Short term financial data look like not supportive for EUR . I will watch closely the 1.28 support to confirm the EUR bullish sentiment.” The support held during the auctions but failed on bad Thursday employment data. “Tuesday there will be lot of numbers from US, PPI, house data and manufacturing.” Those number were mixed, bad Thursdays bad data switched to a risk off sentiment. “Regarding JPY and BoJ intervention I will monitor 1. JGB yields (I see it on CNBC ticker) its 1.00% now. 2. US 10 yr yields 2.72% now, low 2.67% since Fed. 3. German bund yields. 4. USDJPY price action during any risk off & risk on events. Those data will help to determine if JPY has bottomed”. JGB are 0.94%, TYN 2.62%, Bunds at 2.26%. JPY gained on bad data release at the 85.0, the support hold and recovery to the 86.5. This is the fourth failed test to the 85.0 handle in two weeks.
Trades
Bad drawdown at -630€ at the end of the week , still waiting for the risk-on increase; just a hope after bad US data?

2.  Analysis.

"Fundamental analysis"
Last week was characterized by mixed US data and some bad data on Friday that led to a flight to safety and a risk-off sentiment again. Some good data come again ZEW and German data, but it was offset by bad US data and flight to safety. Long term upside move looks like limited, due to the austerity measures and the growth anyway slow. It is difficult to see a bottom in this risk reversal sentiment, after risk on played for a couple of weeks. Friday data ware totally unexpected, but show that US is not really on a growth path. Anyway the data are considered not that important and maybe could be a tiny market action. Gold jumped above 1200. China is buying EUR and JPY, dumping US bonds. Greece and German spread increased again (www.bloomberg.com/apps/quote?ticker=.GRK:IND). BoJ intervention is linked to US growth; if positive data JPY would weaken without need of intervention, but strong JPY could stay for a long time.

"Technical analysis"
EURUSD felled at the 1.27 levels, and the 1.28 did not hold; if further downside next stop is 1.24. EUR COT short increased after rising since June again (-7k), USD long increased (+18.7k) and USD index hold in the 80 support area; JPY is increasing long positions long (+50k). USDJPY traded in the 86 area. Probably is staying down here in these dips. US futures retraced from the 1100 highs to 1070 (confirming the failure to close above 100 and 200 day MA). AUD are increasing (54k), showing a bias versus risk-on positions, very strange in this risk-off sentiment. GOLD/Oil ratio raised at 16.3, from the 15 level since begin of July, with both oil down and gold surging; but VIX stays at the 25.5: did we saw a double bottom? Gold hit 1237, pointing to the previous high 1260 area.

"Market dynamics”
Again I say that these days are more oriented for a short term approach based on risk-on/off. USD weakness looks like already priced, but further slowdown could be led to EUR strength (WA says after price is bottomed 1.24). EUR felled very quickly; 1.28 first support area looks like broken, next will be 1.24. Spread Greek German bonds should be monitored and can sustain negative EUR action. Short term financial data look like not supportive for EUR. I will watch closely the 1.28 support to confirm the EUR bullish sentiment. Regarding JPY and BoJ intervention I will monitor again JGB yields, US 10 yr yields, German bund yields and USDJPY price action during any risk off & risk on events. Those data will help to determine if JPY has bottomed. Rumors of BoJ intervention and possible meeting with BoJ and government could cause JPY volatility.

Median grid
EURUSD GRID 1.280 - 1.350, (grid change), neutral bias
USDJPY GRID 84.00-88.00, neutral bias
AUDJPY GRID 73.00-81.00, short bias

Basically still a risk-off bias by the end of week

Prices
US down at 1077, (Q2)
GOLD up at 1237 (Q3)
Crude 72.17
EURUSD 1.2717 (Q1)
USDJPY 85.261(Q2)

3.  Plan
I will try again to work out of the money positions for JPY longs, just sitting on them for now. I will try to book the B&B long EURUSD and reenter position on a dip; I will monitor

EURUSD
I will close the long if further downside at 1.2630. If not I will enter a long B&B on the yob level (1.2795) as retracement; I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips
Comment:< >

USDJPY
Already too many positions (+6)
Comment:< >

AUDJPY
Already too many positions (+3)
Comment:< >

EURNOK
Hold short positions

Comment:< >

4.  Trades
4.1 open trades, their type & their value:
7 Open 13-ago-10 EURUSD L 1.2805 Q1 1:1 B&B 1.2717 -88.0000

2 Open 13-apr-10 USDJPY L 93.2400 Q3 1:1 toe-in 85.79 -713.0000
6 Open 05-mag-10 USDJPY L 94.5900 Q2 1:1 toe-in 85.79 -851.0000
10 Open 06-mag-10 USDJPY L 93.8600 Q3 1:1 Panic 85.79 -776.0000
16 Open 14-mag-10 USDJPY L 92.3000 Q1 1:1 B&B 85.79 -619.0000
18 Open 02-giu-10 USDJPY L 92.2100 Q2 1:1 B&B 85.79 -619.0000
19 Open 30-lug-10 USDJPY L 86.3400 Q2 1:1 B&B 85.79 -64.0000
6 Open 04-mag-10 AUDJPY L 86.0500 Q4 1:1 toe-in 75.83 -1021.0000
7 Open 06-mag-10 AUDJPY L 85.1300 Q4 1:1 toe-in 75.83 -929.0000
17 Open 03-giu-10 AUDJPY L 78.8500 Q1- 1:1 Hedge 75.83 -237.0000

4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 4:1)

Total positions per currency:
USDJPY +6
EURUSD +1
AUDJPY +3
Position
USDJPY -713, -851,-776, -619, -610, -64
EURUSD -88
AUDJPY -1021, -927, -237

4.3  Effect of planned trades

Account summary:
ActivTrades live account
682Starting capital: 1366
Line in the sand level:  750

1.  Account balance (Settled trades) and growth as a percentage.  (1445=5%)
2.  Account equity (Including open positions) .  (8794= -35%)
3.  Account equity if planned trades go wrong: 1000
4.  Pip distance to line in the sand level.  1294, with gear (10) 129

Daily Briefing 100816

1.  Review.

I wrote “EURUSD rally seems to be likely to stay at the 1.32 levels, as median (now 1.28 and 1.35 levels would be the range); EURUSD bias is to be set to neutral.  Interest differential are playing a role now: the spread between EUR and USD 3 month labor is at 0.4 boosting the EUR. Rising EUR labor is not a worry if not accompanied by a falling USD labor. There reason that the spread will weaken in the next weeks signaling a medium top in EURUSD.  For the moment USD is still a sell and I will enter on long on dips below the 1.3 level” EUR was sold off after the Fed meeting stopping the weakening at 1.28 level. “Next week FOMC meeting will be one of the most important of the year. If further QE will be announced bond yields will fall sending the USD lower (good for JPY long). If not, that is Fed will not buy back Treasuries) there is potential risk for a Treasuries sell off, sending  yields and USD higher (good for JPY shorts).”  No QE, but just bad outlook for the economy from the Fed and there was a fight to safety with JPY strength, low US T-Note yields and EUR sell off. Anyway lower yields did not strengthen JY that much, maybe is a JPY bottom here at 85 level.  JPY regained 86 handle at the end of the week. “ German data are good and the ECB bonds buy back is about to close; other parts of EZ do not show any sign of growth, giving not much space for tightening.  There is then some space to the upside but the medium term is still mined from fiscal concerns”. Good German GDP data did not make EUR rise.
Trades
Holding the same drawdown at -560€ at the end of the week , still waiting for the risk-on increase to decrease the drawdown. Entered a EURNOK short the 12/08 at 7.955 and a EURUSD the 13/08 long at 1.2805

2.  Analysis.

"Fundamental analysis"
Last week was characterized by the Fed meeting that led to a flight to safety and a risk-off sentiment. After that,  employment data was a bad data as usual. Good data from inventory and retail sales. Good data come again from GDP German data, but it was offset by bad bond auction in Italy and bad data from the periphery. Gold jumped as fight to safety surged. Yield from EZ periphery surged as German yields felt. CDS for Irish are at the 17 months high. Friday data did not had a big impact on EURUSD, but boosted the USD some pips.

"Technical analysis"
EURUSD felled at the  1.28 levels. Even if long positions could be taken on this dip, there is potential USD strength. Long term upside move looks like limited, due to the austerity measures and the growth anyway slow. EUR COT short decreased again (-7k), USD long are stable (+12.3k), no more divergence and USD index is now in the 80 support area; JPY is increasing long positions long (+48k).  USDJPY traded in the 86 area. Probably is staying down here in these dips. US futures retested the 1100 highs, but there is a failure to close above 100 and 200 day MA. AUD are increasing (49k), showing a bias versus risk-on positions. GOLD/Oil ratio is raised at 16, from the 15 level since begin of July, with both oil down and gold surging;  but VIX jumped at the 26: did we saw a double bottom? Gold hit 1213, pointing to the previous high 1260 area.

"Market dynamics”
Even if a consider that one should  more focused on interest differentials these days are more oriented for a short term approach based on risk-on/off. USD weakness looks like already priced, but further slowdown could be led to EUR strength (WA says after price is bottomed 1.24).  EUR felled very quickly; 1.28 is a first support area, next will be 1.24. Irish bond auction should be monitored on Tuesday to see risk sentiment against EUR and CDS for Irish bonds. Short term financial data look like not supportive  for EUR . I will watch closely the 1.28 support to confirm the EUR bullish sentiment. Tuesday there will be lot of numbers from US, PPI, house data and manufacturing.  Regarding JPY and BoJ intervention I will monitor  1.  JGB yields (I see it on CNBC ticker) its 1.00% now. 2.  US 10 yr yields 2.72% now, low 2.67% since Fed. 3.  German bund yields. 4.  USDJPY price action during any risk off & risk on events.  Those data will help to determine if JPY has bottomed. Long term questions are:
- how bad will be in US or when we will see the bottom (is this bad outlook just a swing in the recovery)?
- will be the global recovery possible without the US?
- what will be the position of EZ (as anti dollar) and China (they carry the flag “the globe can go alone”)
This is the main story but speculative position will be more short term oriented and risk-on/off based.

Median grid
EURUSD GRID 1.280 - 1.350, (grid change), neutral bias
USDJPY GRID 84.00-88.00, neutral bias
AUDJPY GRID 73.00-81.00, short bias

Basically still a risk-off bias by the end of week

 Prices
US  down at 1081, (Q2)
GOLD up at 1213 (Q3)
 Crude 75.17
EURUSD 1.2767 (Q1)
USDJPY 86.23 (Q3)

3.  Plan
I will try again to work out of the money positions for JPY longs, just sitting on them for now. I will try to book the B&B long EURUSD and reenter position on a dip; I will monitor

 

EURUSD
I will enter a long B&B on the yob level (1.2958) as retracement; I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips
Comment:< >

USDJPY
Already too many positions (+6)
I will enter a long B&B on the yob level (85.16) as retracement, if the 85 level is hold; I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips
Comment:< >

 

AUDJPY
Already too many positions (+3)
I will enter a short  B&B on the yob level (78.31) as retracement; I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips
Comment:< >

 

EURNOK
Hold short positions

Comment:< >

 

4.  Trades
4.1 open trades, their type & their value:

7 Open 13-ago-10 EURUSD L 1.2805 Q1 1:1 B&B 1.2769 -36.0000

2 Open  13-apr-10   USDJPY  L   93.2400 Q3  1:1 toe-in  86.23 -701.0000  
6 Open  05-mag-10   USDJPY  L   94.5900 Q2  1:1 toe-in  86.23  -836.0000
10 Open 06-mag-10   USDJPY  L   93.8600 Q3  1:1 Panic   86.23 -763.0000
16 Open 14-mag-10   USDJPY  L   92.3000 Q1  1:1 B&B 86.23 -607.0000
18 Open 02-giu-10 USDJPY L 92.2100 Q2 1:1 B&B 86.23 -597.0000
19 Open 30-lug-10 USDJPY L 86.3400 Q2 1:1 B&B 86.23 -11.0000
6 Open  04-mag-10   AUDJPY  L   86.0500 Q4  1:1 toe-in  77.23 -882.0000
7 Open  06-mag-10   AUDJPY  L   85.1300 Q4  1:1 toe-in  77.23 -790.0000
17 Open 03-giu-10   AUDJPY  L   78.8500 Q1- 1:1 Hedge   77.23   -162.0000

4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 4:1)

Total positions per currency:
USDJPY  +6
EURUSD 1
AUDJPY +3
Position
USDJPY -701, -836,-763, -607, -597, -11
EURUSD -36
AUDJPY -882, -790, -162

4.3  Effect of planned trades

 

Account summary:
ActivTrades live account
682Starting capital: 1366
Line in the sand level:  750
 

1.  Account balance (Settled trades) and growth as a percentage.  (1445=5%)
2.  Account equity (Including open positions) .  (9536= -3%)
3.  Account equity if planned trades go wrong: 1000
4.  Pip distance to line in the sand level.   2036, with gear (10) 203

Risk on/off or interests differential approach

“There are now two divergent views in the currency markets. One has traders buying the dollar as a safe haven when the US data is bad, and selling dollars moving into ‘risk trades’ when the economic data in the US is positive. The other view which has recently started to catch on has currency traders selling dollars on bad economic news in the US, and buying the greenbacks when the data is strong. This is a more traditional approach, and focuses on interest rate differentials. When the US data is bad, the thought is that the FOMC will be forced to keep rates low. On the flip side, when the US data shows a stronger recovery, a potential FOMC tightening moves traders to buy the dollar. Choosing which strategy to use is determined by your thoughts on the global recovery. If you believe the global recovery can’t happen without the US consumer, then you choose the ‘safe haven’ approach. But if you feel, as I do, that the rest of the world is going to be able to recover without a strong US consumer, then your focus shifts back to interest rate differentials and the global growth story.”
Form Daily Pfenning 8/6/2010

Daily Briefing 100809

1.  Review.

I wrote “EURUSD rally seems to be likely to stay at the 1.30/1 levels, as median (1.25 and 1.32 levels would be the range); The chances are that the EURUSD will go back in the grid or a clear break of the 1.32 level will bring it to the 1.33/4 area. and I will enter on long on dips below the 1.3 level”. EURUSD broke 1.32 level on Friday US job report. No decent dips before this move to enter a long position. “Releases this week will be important for US almost every day and I will look on that as confirmation about US weakness”. I will not expect a strong JPY against US;” USD lose ground versus EUR , JPY and AUD.” BoJ intervention is expected below 85. “ JPY Trade minister said he is very concerned about yen rise and they would need to take some action in future. “Long term outlook is still positive for AUD and CAD. Weakness of JPY cross are more for risk off view (JPY as safe heaven) then for bad fundamentals”. Anyway wome data below the expected was disappointing for the AUD.
Trades
Holding the same now “only” -526€ at the end of the week , looking for the expected risk on increase to decrease the drawdown. No trades this week.

2.  Analysis.

"Fundamental analysis"
Last week was characterized by a lot of US fundamentals; employment data was a bad data, despite some positive comment by US president, determining again a dollar weakness, suggesting again that this a recovery with no employment and just supported by government spending. Only good data were ISM for manufacturing and non manufacturing. Good data come again from EZ, especially from the German data. Gold after a sharp decline regained its levels and jumped on US job jamboree. Fed is expected calling for more QE and moving forward rate hikes expectances. This factor anyway could be already priced in and QE announcement could not weaken the USD.

"Technical analysis"
EURUSD jumped around 1.33 levels. Long positions could be taken on dips, but upside move looks like limited, due to the austerity measures and the growth anyway slow. EUR COT short decreased again (-7k), USD long are stable (+12.3k), no more divergence and USD index is now in the 80 support area; JPY is increasing long positions long (+48k). USDJPY traded in the 86 area. Probably is staying down here in these dips. US futures retested the 1100 highs, but there is a failure to close above 100 and 200 day MA. AUD are increasing (49k), showing a bias versus risk-on positions. GOLD/Oil ratio is stalling at 15 since begging of July, with both oil and gold surging; but VIX is not that volatile now at 21 support level. Gold after taking the 1156 lows high is now back at 1205, pointing to go back to the 1300 area.

"Market dynamics”
A good summary about the market sentiment comes from A Pfennig for Your Thoughts 8/6/2010; there are now two divergent views: the first is the risk-on/risk-off; they buy USD on bad USD data, as safe haven currency and they sell USD on good US data, moving into risk trades. The second has a more classical approach based on interest differentials; they sell USD on bad US data, because the interest will kept low and they buy USD when data are good, because of potential interest tightening. The last approach has recently got investors interest. I should chose one strategy based on the economy recovery expectation: if I think that the recovery cannot be without US consumers I will chose the first; if I think that the recovery can be without US consumers, but the rest of the world will be enough, I will chose the second, more focused on interest differentials. I think I will be for the second approach.
EURUSD rally seems to be likely to stay at the 1.32 levels, as median (now 1.28 and 1.35 levels would be the range); EURUSD bias is to be set to neutral. Interest differential are playing a role now: the spread between EUR and USD 3 month labor is at 0.4 boosting the EUR. Rising EUR labor is not a worry if not accompanied by a falling USD labor. There reason that the spread will weaken in the next weeks signaling a medium top in EURUSD. For the moment USD is still a sell and I will enter on long on dips below the 1.3 level. Next week FOMC meeting will be one of the most important of the year. If further QE will be announced bond yields will fall sending the USD lower (good for JPY long). If not, that is Fed will not buy back Treasuries) there is potential risk for a Treasuries sell off, sending yields and USD higher (good for JPY shorts). German data are good and the ECB bonds buy back is about to close; other parts of EZ do not show any sign of growth, giving not much space for tightening. There is then some space to the upside but the medium term is still mined from fiscal concerns.

Median grid
EURUSD GRID 1.280 - 1.350, (grid change), neutral bias
USDJPY GRID 88.00-92.00, neutral bias
AUDJPY GRID 73.00-81.00, short bias

Basically still a risk-off bias by the end of week

Prices
US up at 1119, (Q4)
GOLD up at 1205 (Q3)
Crude 80.82
EURUSD 1.3280 (Q3)
USDJPY 86.5 (Q3)

3.  Plan
I will try again to work out of the money positions for JPY longs, just sitting on them for now. I will try to enter a long EURUSD position on a dip; I will monitor EURSEK for a long if there is a retracement. I will add a short on EURNOK

EURUSD
I will enter a long B&B on the yob level (1.3020) as retracement; I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips
Comment:< >

USDJPY
Already too many positions (+6)
Comment:< >

AUDJPY
Already too many positions (+3)
I will enter a short B&B on the yob level (78.31) as retracement; I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips
Comment:< >

EURNOK
Hold short positions

I will enter a short B&B on the yob level (7.9) as retracement; I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips
Comment:< >

4.  Trades
4.1 open trades, their type & their value:

2 Open 13-apr-10 USDJPY L 93.2400 Q3 1:1 toe-in 85.50 -774.0000
6 Open 05-mag-10 USDJPY L 94.5900 Q2 1:1 toe-in 85.50 -859.0000
10 Open 06-mag-10 USDJPY L 93.8600 Q3 1:1 Panic 85.50 -784.0000
16 Open 14-mag-10 USDJPY L 92.3000 Q1 1:1 B&B 85.50 -627.0000
18 Open 02-giu-10 USDJPY L 92.2100 Q2 1:1 B&B 85.50 -618.0000
19 Open 30-lug-10 USDJPY L 86.3400 Q2 1:1 B&B 85.50 -72.0000
6 Open 04-mag-10 AUDJPY L 86.0500 Q4 1:1 toe-in 78.48 -757.0000
7 Open 06-mag-10 AUDJPY L 85.1300 Q4 1:1 toe-in 78.48 -665.0000
17 Open 03-giu-10 AUDJPY L 78.8500 Q1- 1:1 Hedge 78.48 -29.0000

4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 4:1)

Total positions per currency:
USDJPY +6
EURUSD 0
AUDJPY +3
Position
USDJPY -774, -859,-784, -627, -618, -72
EURUSD 0
AUDJPY -757, -668, -29

4.3  Effect of planned trades

Account summary:
ActivTrades live account
682Starting capital: 1366
Line in the sand level:  750

1.  Account balance (Settled trades) and growth as a percentage.  (1445=5%)
2.  Account equity (Including open positions) .  (9474= -31%)
3.  Account equity if planned trades go wrong: 1000
4.  Pip distance to line in the sand level.  1974, with gear (9) 219