Daily Briefing 100405

1.  Review.

After having close out all positions, I hoped to enter on some pullback but they did were there. Risk on was still playing giving AUD and USD strength. The bar after the employment claims set a clear risk on bias.
Trades

I just entered a not very smart short on USDJPY hoping to get some “sell the fact” profit, but after a small spike USD went to 94 level.

2.  Analysis.

"Fundamental analysis"
Risk environment is improving, leading stock, commodities and JPY crosses higher. EUR and GBP will lag, while AUD and CAD are leading. USD is gaining against JPY. Credit swaps (insurance against defaults) are at the highs for PGS, suggesting that the Greece issue is still there.
The March employment report confirms that the upward trend in jobs and generally in the economy is still up. Several leading indicators confirm this view. US economy is viewed as the best performer in the developed world (against the EZ, UK and Japan).
RBA is expecting rising rates in may, and this would suggest a appetite of AUD.

"Technical analysis"

EURUSD is trading in the grid middle, having changed it (see below). New high at 1.36 looks like a strong resistance, giving the amount of previous trading at that level.
USDJPY is running quickly to the 95 level, breaking the 93 high. UBS suggested a profit taking. AUDJPY broke the 86 high grid resistance.
JPY COT short are -30k level, EUR -85k, all time low level and USD long still remains high (35). I think it is worth to notice that COT EUR reports a all time high in the EUR large speculator position shorts at -85k (http://www.timingcharts.com/index.php). Price and shorts are going the same way: I think we should wait for a divergence to see the price reverse, and it not there for now.

"Market dynamics"

Recent carry trades increasing and more risk on set some crosses at highs near some psychological level. Next week fundamentals looks good for US and AUD. (ISM and employment). I would expect some profit taking before trying to break those levels, basically 95 for USDJPY and again 1.35 for EURUSD

Median grid

EURUSD GRID 1.3100 - 1.3700, short bias, grid adjustment
USDJPY GRID 88.00-92.00, long bias, grid adjustment

AUDJPY GRID 78.00-86.00, long bias, maybe a , grid adjustment

Basically still a risk-on bias

Prices

US up at 1179, (Q2)
GOLD at 1123 (Q3), almost same value as beginning of year
Crude 85.1
EURUSD 1.3498 (M)
USDJPY 94.53, (Q3)

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 (94.1) as pullback 1:1, I will hedge on a couple of level down (-100 pips). I can open a new toe in long around at 93. 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:

1 Open 02-apr-10 USDJPY S 94.0200 Q3 1:1 B&B 94.6000 -58.0000 -54.5316

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 -1 (-62)
EURUSD 0 (0)
AUDJPY 0 (0)

4.3  Effect of planned trades

Account summary:

ActivTrades live account

Starting date: 1/4/2010

Starting capital: 1366

Line in the sand level:  750

1.  Account balance (Settled trades) and growth as a percentage.  (1366= 0%)
2.  Account equity (Including open positions) .  (1360= -1%)
3.  Account equity if planned trades go wrong
4.  Pip distance to line in the sand level.  6100