Daily Briefing 100426

1.  Review.

Last week I said that basically we would see a correction on risk positions and lower risk ahead. I was basically wrong . The correction lasted only few hours with Friday Goldman Sack news. Risk off lasted very few and we are back at the same range top as last week.
Trades

I am stuck with the hedged USDJPY (edged at the extreme low at 91.7); I should worked out better the covering, looking that we were at the grid low and maybe close the hedge before getting to the long position level. I added a USPJPY at 93 level (the mean, probably not a good deal). It worked better the AUDJPY edge ( a profit). EURNOK finally rallied short to the 7.8 with profit closed. I was lucky with a long opened at grid top (1160) very in depth, that was back to 1160 level after Greece help request.

2.  Analysis.

"Fundamental analysis"
ZEW German index end business climate were better than expected. Despite good EZ data Greece request for founding weighted to the EUR. US earning were ahead then expectation too, as PPI, existing and new home sales and the important core durable goods orders. All this suggest that recovery is gaining momentum.

"Technical analysis"

EURUSD filled the gap, reached the range bottom and went back to 1.33. COT data shows JPY short high (-50k) since 2007, EUR shorts increased again (-75k), US still long at 24k, decreasing. UDB sees EURUSD at 1.3 in three month forecast. Lot of double tops on AUDJPY around 87.4 value. USDJPY rallied to 94. JPY crosses are around top of ranges

"Market dynamics".
No Fed changes are expected this week. Fundamentals are expected confirming the recovery, including PPI from China. China is expected to have a credit tightening, US notes are expected lowering and yields increasing. With the current positive correlation with USDJPY this would lead USDJPY to gain. l I would expect risk on remaining for the next week. JPY top breakout are to be monitored closely and soon. I would expect EURUSD rally to last short and be under pressure again.

Median grid

EURUSD GRID 1.3100 - 1.3700, short bias
USDJPY GRID 88.00-92.00, long bias
AUDJPY GRID 78.00-86.00, long bias, maybe a grid adjustment
Basically still a risk-on bias

Prices

US up at 1212, (Q4)
GOLD at 1157 (Q4)
Crude 85.0
EURUSD 1.338 (M)
USDJPY 93.96 (Q2)

3.  Plan

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

EURUSD
I will enter long on the yob level (1.34), 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 (93.2, even if looks like a median price; maybe is a good buy at 92.67 level) as pullback 1:1, I will hedge on a couple of level down (-100 pips). I can open a new toe in long same level. I will take profit at 50-100 pips
Comment:< >

AUDJPY
Too much on the high levels. Take profit of one position if breaks to top. I will add a long on the previous yob level (85.32) as pullback 1:1, I will stop out on a level down (-100 pips).
Comment:< >

EURNOK
Take profit at 7.89 and add another short if pullback at 7.91.
Comment:< >

4.  Trades

4.1 open trades, their type & their value:
13-apr-10 USDJPY L 93.2400 Q3 1:1 B&B 94.0000 76.0000 70.8624
19-apr-10 USDJPY S 91.6100 Q1 1:1 Hedge 94.0000 -239.0000 -218.9479
19-apr-10 USDJPY L 93.4800 Q1 1:1 B&B 94.0000 52.0000 48.6096
1 Open 15/04/2010 AUDJPY L 86.3700 Q4 1:1 B&B 87.1500 78.0000 67.3686
3 Open 20-apr-10 AUDJPY L 86.5100 Q4 1:1 B&B 87.1500 64.0000 55.3664

4.2 Leverage

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

Total positions per currency
USDJPY +2,-1
EURUSD 0
AUDJPY +2
Position
USDJPY 118 (218)
EURUSD 0 (0)
AUDJPY 117 (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.  (1379= 1%)
2.  Account equity (Including open positions) .  (1381= 1%)
3.  Account equity if planned trades go wrong
4.  Pip distance to line in the sand level.  6300, with gear 1263