Daily Briefing 100503

1.  Review.

I said “l I would expect risk on remaining for the week. JPY top breakout are to be monitored closely and soon. I would expect EURUSD rally to last short and be under pressure again.”. After the Greece crisis aid package solution the was a risk rally that looks like failed by end of Friday. EUR gained probably for short position covering.
Trades

I am stuck with the hedged USDJPY (edged at the extreme low at 91.7); I I cashed another EURNOK with profit closed and added another short on a dip. Gold is still hedged with loss.

2.  Analysis.

"Fundamental analysis"
US data is good and this confirm that recovery is gaining momentum even for increasing consumer spending (GDP 3.2%). No Fed changes were in this week. Fundamentals are confirming the recovery with positive PMI from China. Conference for Greece aid is expected this weekend and the expected package will support EUR. Rate differential are weighting EUR, cash rate is expected remaining the same as there are not inflationary signs around.

"Technical analysis"

Risk currencies topped at Friday suggesting recent ranges could held. Only Gold broke the top, a hard to break 1170 level, and this is probably a risk off sign. EURUSD gained the mid grid level, but the long term outlook is still south, UBS still at 1.3. EUR COT short are again at the historical lows (-89k), USD long are decreasing (+25k), JPY short are pausing (-49k), but still at historical lows. USDJPY 94.5 high hold. US futures were heavily sold off late Friday.

"Market dynamics".
I would expect risk on remaining low for the next week. If Greece aid package will be as expected we will see a EURUSD rally to resistance 1.340/1.345 area, where there could be selling pressure again. Low support is 1.320/1.325 area. AUD cash rate I expected rising 0.25 bps and this will cause a “sell the fact”.

Important unemployment claims will give support to the recovery and the USD, that now is view as growth currency.

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 1185, (Q3)
GOLD at 1178 (Q4+)
Crude 86.1
EURUSD 1.3295 (M)
USDJPY 93.85 (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 (1.33) for a quick B&B and 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 1.348.
Comment:< >

USDJPY
I will enter a long B&B on the next yob level (93.16, 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).
Comment:< >

AUDJPY
Risk off is mounting. I will add a long on the previous yob level (86.0 or 85.32) as pullback 1:1, I will stop out on a level down (-100 pips).
Comment:< >

EURNOK
Add another short if pullback at 7.87.
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
23-apr-10 USDJPY L 93.9800 Q1 1:1 B&B 94.0000 2.0000 1.6096
3 Open 23-apr-10 AUDJPY L 86.7100 Q4 1:1 B&B 19.1500 16.0000

4.2 Leverage

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

Total positions per currency:
USDJPY +2,-1
EURUSD 0
AUDJPY +1
Position
USDJPY 2, 76 (239)
EURUSD 0 (0)
AUDJPY 17 (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.  (1395= 2%)
2.  Account equity (Including open positions) .  (1382= 1%)
3.  Account equity if planned trades go wrong
4.  Pip distance to line in the sand level.  6300, with gear 1580