Daily Briefing 100329

1.  Review.

EUR got some gain after EUM meeting, having anticipated lows before the meeting. USDJPY paused the sell off around the expected 92 level.

Trades

I exit last USDJPY long, a long time entry that was out of the money for a month.

I exit the AUDJPY with some profit.

I have only a couple if EURNOK, that suffered from the non hike of the rates.

2.  Analysis.

"Fundamental analysis"

Real USD driver looks like to be a selloff of US treasuries that are increasing yields and bringing USD higher.

JPYUSD and TNX are strongly correlated since 2010. Lack of participation from the China to USD treasury auction could send yield to 4.0 %. From this correlation we could expect USDJPY rising to 95-96 level. UBS suggest anyway some caution in using bond spread differential as driver of fx market.

A unified response to the Greece crisis between EU members helped EUR to recover from recent lows. Next Greece bond sales will be vital to its fiscal program: a poor sales could force Greece to ask help (especially from Germany) and could trigger a contagious to the next Portugal PIGS .

Except new home sales, fundamentals were good last week, especially unemployment claims. Forecasted data shows positive signs for the hold of the recovery.

RBA is expecting rising rates in may, and this would suggest a appetite of AUD.

"Technical analysis"

EURUSD reentered the grid at the lows. A double bottom would suggest that the 1.33 level is holding. UBS forecast 1.30 level in 3 months. UBS see EURUSD at 1.30 in three months.

USDJPY run quickly to the 92.5 level, hitting a double top. UBS is expecting a USJPY at 95 in three months, but quite stable to 90 in a year forecast.

"Market dynamics"

Recent move in USJPY would suggest that investor are expecting increase in the rate differentials. We are looking to see carry trades increasing and more risk on. Increasing yields and not still clear recovery certain (especially from banks) will lead to increasing volatility in the next period. As relative value, UBS set US as the strongest currency for now.

Median grid

EURUSD GRID 1.3500 - 1.4100, short bias, maybe a grid adjustment

USDJPY GRID 88.00-92.00, long bias

AUDJPY GRID 78.00-86.00, long bias

Basically still a risk-on bias

Prices

US up at 1163, (Q2)
GOLD at 1106 (Q3), almost same value as beginning of year
Crude 80.1
EURUSD 1.3409 (Q4-)
USDJPY 92.53, (Q4+)

3.  Plan

Add new trade I will do B&B trades with long term trades.

EURUSD

I will enter long on the next yob level (1.3508) as pullback 1:1, I will hedge on a couple of level up (-100 pips). I will wait then for a dip to enter a short B&B again at 1.3508 and a Toe In trade, same level.

Comment:< >

USDJPY

I will enter a long B&B on the next yob level (91.75) as pullback 1:1, I will hedge on a couple of level down (-100 pips). I can open a new toe in long at 91.15 opened. I will take profit at 50-100 pips

Comment:< >

AUDJPY

I will do B&B. I will enter long on the next yob level (82.32) as pullback 1:1, I will stop out on a level down (-100 pips). I wait if prices come down to the previous 82 value area

Comment:< >

EURNOK

Add another short if pullback at 8.095.

Comment:<>

4.  Trades

4.1 open trades, their type & their value:

4.2 Leverage

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

Total positions per currency

USDJPY 0
EURUSD 0
AUDJPY 0

Position

USDJPY 0 (0)
EURUSD 0 (0)
AUDJPY 0 (0)

4.3  Effect of planned trades

Account summary:

ActivTrades live account

Starting date: 1/1/2010
Starting capital: 1233
Line in the sand level:  750
1.  Account balance (Settled trades) and growth as a percentage.  (1366= 9%)
2.  Account equity (Including open positions) .  (1346= 8%)
3.  Account equity if planned trades go wrong
4.  Pip distance to line in the sand level.  6000