Daily Briefing 100615

1.  Review.

I said “Risk events are the EU finance minister meeting on Tuesday and the CNY CPI and other data on Thursday and Friday. Risk off sentiment looks like to last for some time (weeks?) so I will not add more risk positions to my portfolio. I will be a seller on EURUSD dips (UBS three month forecast is 1.15). JPY is expected to weaken for fundamentals (UBS three month forecast is 95), but near weakness is expected for risk aversion” . Chinese data were good for risk sentiment, and it was a week were risk sentiment rebounded (despite some weak data on Friday from US). EURUSD it going to reach the 1.23 target. Seeing the risk trade increasing I waited to add more risk positions and waited to sell the EURUSD. The 1.21 area was crowded and maybe the 1.23 is a more relaxed area. I will be in business trip in Far East and I don’t know how much I will be able to trade.
Trades
I close another USDJPY with a small loss. Still holding EURNOK shorts, despite the overshooting.

2.  Analysis.

"Fundamental analysis"
Global markets stabilized last week with no bad events and some good . Strong Chinese and Australian data prompted for risk on return. Fundamentals from US on Friday were somehow disappointing. Risk recovered marginally but doubts remains. Austerity measures are likely to undermine recovery and prices retested and hold recent lows, suggesting a consolidation instead of more risk taking actions.

"Technical analysis"
EURUSD after hit historical lows, and having strong break of the current Q1 levels range returned in the grid. It would be still short on rallies. Key support are 2006 1.18 and 2005 1.63 lows. EUR COT short are still decreasing at the historical lows (-112k), USD long are still there (+20k), showing a big divergence; JPY short are quite stable (-12k). USDJPY traded in the 90.2-92 area, now at 92 area. It is dangerous to a buy on these dips. US futures retested the 1100 high. AUD long decreased (+8k), unwinding the risk on positions. GOLD/Oil ratio is still high from a 13 in the last months to 16 and VIX is back to 28, pointing for a small risk off decreasing. Gold made a double top at 1252, very quickly.

"Market dynamics".
BoJ declared that they would not allow a strong yen and perhaps the pattern risk off/ strong yen will be limited, and maybe visible more on other crosses, like AUDJPY as expression of risk sentiment. I will remain short an EURUSD on medium basis, looking for sell on retracement, in the 1.23-1.24 area. High uncertainty is still alive and I would not add other risk positions.

Median grid
EURUSD GRID 1.2300 - 1.30, short bias (No grid change)
USDJPY GRID 88.00-92.00, neutral bias
AUDJPY GRID 74.00-82.00, short bias

Basically still a moderate risk-on bias

Prices
US down at 1100, (Q2)
GOLD up at 1220 (Q2)
Crude 75.3
EURUSD 1.23 (Q1)
USDJPY 91.2 (Q1)

3.  Plan
I will try to work out of the money positions for JPY longs;.

EURUSD
I will enter a long B&B on the next yob level (1.235); 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:< >

USDJPY
Already too many positions (+5)
Comment:< >

AUDJPY
Close the shorts on a dip (75)
Comment:< >

EURNOK
Hold short positions
Comment:< >

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

2 Open 13-apr-10 USDJPY L 93.2400 Q3 1:1 toe-in 91.70 -178.0000
6 Open 05-mag-10 USDJPY L 94.5900 Q2 1:1 toe-in 91.70 -313.0000
10 Open 06-mag-10 USDJPY L 93.8600 Q3 1:1 Panic 91.70 -240.0000
16 Open 14-mag-10 USDJPY L 92.3000 Q1 1:1 B&B 91.70 -84.0000

18 Open 02-giu-10 USDJPY L 92.2100 Q2 1:1 B&B 91.4000 -81.0000
6 Open 04-mag-10 AUDJPY L 86.0500 Q4 1:1 toe-in 77.81 -758.0000
7 Open 06-mag-10 AUDJPY L 85.1300 Q4 1:1 toe-in 77.81 -666.0000
16 Open 20-mag-10 AUDJPY S 72.8800 Q1- 1:1 Hedge 77.810 -560.0000

4.2 Leverage

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

Total positions per currency:
USDJPY +5
EURUSD 0
AUDJPY +2,-1
Position
USDJPY -178, -313,-240, -84, -84
EURUSD 0

AUDJPY -758, -666 (-560)

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.  (1345=1.6%)
2.  Account equity (Including open positions) .  (1189= -13%)
3.  Account equity if planned trades go wrong: 1000
4.  Pip distance to line in the sand level.  4369, with gear (6) 728