Daily Briefing 100621

1.  Review.

I said “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” . USDJPY made some gain instead, reaching the 91 handle in the risk off sentiment at end of the week; instead AUDJPY stead at the same price level around 79. EURUSD gained the 1.24 level, worth the waiting for a new short at that level. US futures stayed falt during the end of the week.
Trades
No trades this week in Taiwan.

2.  Analysis.

"Fundamental analysis"
Last week was characterized by a dollar weakness, undermined by a potential slow down in the recovery., with tension over the Europe and no really good fundamentals data. EURUSD recovery but no risk currency gained the same time; gold surged at new all time highs and JPY gained versus the dollar too. Fundamentals were bad: low than expected ZEW, Philly Fed index, TIC was higher (US safe heaven)and still job losses. Bond auction had no problems.

"Technical analysis"
EURUSD left historical lows and now is in the current Q1 levels range (short bias) at 1.24. It would be still short on rallies. Key support are 2006 1.18 and 2005 1.63 lows. EUR COT short decreased in a jump (-602k), USD long are still there (+21k), showing the big divergence start to converge; JPY short are quite stable (-3k). USDJPY traded in the 90.2-92 area, now at 90 area. It is dangerous to a buy on these dips. US futures retested and stalled at the 1100 high. AUD long stalled (12k), showing the end of the unwinding of the risk on positions. GOLD/Oil ratio is still high from a 13 in the last months to 16; but VIX is still decreasing to 23, pointing for a small risk off decreasing. Gold made a double all time high at 1257, very quickly.

"Market dynamics”
EURUSD rally seems to be likely a short sell covering. Bank stress test expected to drain out uncertainness. Next week sentiment indicator are to be monitored and bad data could trigger a sell of the EUR again. I will be in alert of risk reverse sing as 1100 level in S&P, 1.25 in EURUSD and 77.5 in AUDJPY. High uncertainty is still alive and I would not add other risk positions.

Median grid
EURUSD GRID 1.900 - 1.250, short bias (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 1250 (Q2)
Crude 77.3
EURUSD 1.24 (Q1)
USDJPY 90.7 (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 90.70 -254.0000
6 Open 05-mag-10 USDJPY L 94.5900 Q2 1:1 toe-in 90.70 -389.0000
10 Open 06-mag-10 USDJPY L 93.8600 Q3 1:1 Panic 90.70 -316.0000
16 Open 14-mag-10 USDJPY L 92.3000 Q1 1:1 B&B 90.70 -147.0000

18 Open 02-giu-10 USDJPY L 92.2100 Q2 1:1 B&B 91.4000 -151.0000
6 Open 04-mag-10 AUDJPY L 86.0500 Q4 1:1 toe-in 77.81 -700.0000
7 Open 06-mag-10 AUDJPY L 85.1300 Q4 1:1 toe-in 77.81 -609.0000
16 Open 20-mag-10 AUDJPY S 72.8800 Q1- 1:1 Hedge 77.810 -616.0000

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 -254, -389,-316, -147, -151
EURUSD 0

AUDJPY -700, -606 (-616)

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) .  (1157= -15%)
3.  Account equity if planned trades go wrong: 1000
4.  Pip distance to line in the sand level.  4076, with gear (6) 679