Daily Briefing 101025

1.  Review.

I said “Prices did not move against USD after the Friday QE2 confirmation, suggesting again the QE2 expectation is already priced and maybe it will stop the USD weakness temporarily. A sharp drop in CRB and risk index could confirm this”. USD dropped in for a couple of days, but recovered then to the beginning of the week levels. CRB dropped a little “Probably investor are already placed for November 3 Fed meeting and now there will be a wait-and-see mode” It was basically a trading range week. Even if risk is on, I will expect potential further up move for EURUSD not exceeding the 1.41/1.42 levels, but probably a trading range around the 1.38 level as a consolidation, as grid mean (but end of year outlook is 1.45/1.5)”. Range was more center on 1.39 level than 1.38. “QE2 will be supportive for risk on because it will give money to big guys to invest in risky markets; so I am long of risk currency against USD (not JPY). Maybe it will be less stronger than QE1 because the expectations are like this” Investors are still waiting Nov 3 FED. I will look to spread Greek German bonds and US, JGB in general”. TYN recovered from the historical lows to 2.55. “Unilateral BoJ intervention is expected again, especially if prices drops below 80 handle. I will put ISDJPY stops t protect against USDJPY weakness.” USDJPY traded around 81 handle and no with no BoJ intervention.
Trades
No trades

2.  Analysis.

"Fundamental analysis"
Data from US were better than expected; this caused a some USD strength with some profit taking due to a high exposure to USD shorts; probably FED will have a QE2 incremental approach and thus QE2 is already priced now. We have to wait November 3 FED meeting to be sure that there will not be more USD lows. In case of the expected QE2 this could be a catalyst for USD rebound. Probably a cold QE2 will cause a nice dip to buy EUR. EUR data ZEW was better than expected, to confirm German recovery even at this EUR levels. China increase of interest rate is a good move to cool down growth to avoid overheating and avoid bubble burst. This would lead to a conviction that recovery could be in place even without US spending.

"Technical analysis"
EURUSD traded at the 1.39 levels, with a short sell off at 1.37; lack of risk off data and wit for FED meeting probably will bring to a trading range in the next week; because is expected a trading range there will be some stop hunting at the extremes. COT data are below. USD still trading 77-78 range; USDJPY traded in a strict 81 area, making a fresh low at 80.85 and some stop hunting up and down. Again at this level BoJ would intervene if the 80 level will be broken. Gold sell of till 1.3000; US futures raised again in to the 1180. GOLD/Oil ratio stable; VIX stable to low levels.
COT JPY stable at 43.7k (-2.2k)
COT USD up to 3.4k (+4k)
COT EUR up to 45.1k (+3.5k)
COT AUD down 59.5k (-8k)
TYN stable at 2.55% (+0%)
JGB stable at 0.89% (0.01%)
Bunds up to 2.47%. (+0.1%)

German/Greece up to 6.8% (-0.3%)
VIX down to 18.7 (-0.5)
Gold/Oil stable to 16.2 (-0.6)

"Market dynamics”

Median grid
EURUSD GRID 1.340 - 1.42, up bias
USDJPY GRID 84.00-88.00, neutral bias
AUDJPY GRID 73.00-81.00, long bias

Prices
US up at 1174 , (+30, Q2)
GOLD down at 1328 (-40$, Q4),
Crude 81.8 (0$)
EURUSD 1.3955 (+0. 020, Q3)
USDJPY 81.43(-0.10, Q2)

3.  Plan
I will try to profit from this expected trading range, entering long EURUSD on dips and selling highs. Still long USDJPY expecting BoJ intervention, but add stops

EURUSD
I will enter a long B&B on the yob level (1.3757) I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips. I will enter a short B&B on the yob level (1.4057) I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips
Comment:< >

USDJPY
No more positions to add
Comment:< Still underwater…>

AUDJPY
Comment:< >

EURNOK
Comment:< >

4.  Trades
4.1 open trades, their type & their value:
1 Open 05-set-10 USDJPY L 84.2600 83.2600 Q1 0.2 B&B 81.37 -289.0000 -28.9000 -20.7
Open 07-ott-10 USDJPY L 82.3600 83.2600 Q1 0.2 B&B 81.37 -99.0000-9.9000 -7.24
4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 3:1)

Total positions per currency:
USDJPY +2
EURUSD 0
AUDJPY 0
Position
USDJPY -29.0, -8
EURUSD 0
AUDJPY 0

4.3  Effect of planned trades

Account summary:
Saxo live account
Starting capital: 1000
Line in the sand level:  7500

1.  Account balance (Settled trades) and growth as a percentage.  (9985=-0.15%)
2.  Account equity (Including open positions) .  (9978= -0.25%)
3.  Account equity if planned trades go wrong: 9973
4.  Pip distance to line in the sand level.  2475, with gear (0.2) 12000

Daily Briefing 101018

1.  Review.
I said “Prices did not move against USD after the NFP, maybe the QE2 expectation is already priced and maybe it will stop the USD weakness temporarily. I will not expect potential further up move for EURUSD to the 1.4 but a trading range around the 1.38 level as a consolidation” Price instead went to 1.415, but returned to beginning of week level, maybe suggesting that QE2 is priced in, after the Friday announcement that QE2 is coming. “I will be data watching to see Fed reaction for confirmation QE and for risk on support. QE2 will be supportive for risk on because it will give money to big guys to invest in risky markets. Maybe it will be less stronger than QE1 because the expectations are like this. I will look to spread Greek German bonds” Spread decreased and market seems do not care about European sovereign debt  for the moment. “and US, JGB in general.” That  remains at historical lows, probably because lot of money is parking there waiting for QE2 “Unilateral BoJ intervention is expected again, especially if prices drops below 82 handle.” Price reached 80.93 but no intervention
Trades
No trades
2.  Analysis.
"Fundamental analysis"
Lack of immanent bad news and Greece bond spread lowering reinforced a risk on bias. Disclosure of QE2 (even if not the entity) caused some profit taking but it is good for risk (basically free money to put in risky trades) . Stocks are up, mainly for the same reason because employment data still suggest that economy is not recovering.  Lack of JPY carry trades caused JPY to strengthen again; it needs interest differential  to change after some good US job reports. Total lack of bad news from risk generator events (PIIGS and China bubble, confirmed by a cooled trade balance data) are driving a risk on, essentially good for currencies versus USD.
"Technical analysis"
EURUSD broke  the 1.40 levels; the move could still have a correction, because the move was quick and strong, mainly because of lack of risk off data. COT data are below. USD still trading 77-78; USDJPY traded in the 82-81 area, making a fresh low at 80.93. Probably *again( at this level BoJ would intervene. US futures jumped again in to the 1170, closing above 100 and 200 MA: it look like a break to new  highs. GOLD/Oil ratio stable;  VIX stable to low levels.
COT JPY stable at 45.9k (+0k)
COT USD stable at -1.4k (-0.1k)
COT EUR down to 41.5k (-7k)
COT AUD down 67.5k (-2k)
TYN up to 2.55% (+0.15%)
JGB stable at 0.88% (0.01%)
Bunds up to 2.37%. (+0.12%)
German/Greece down to 6.5% (-1%)
VIX down to 19.03 (-1.25)
Gold/Oil up to 16.8 (+0.6)

"Market dynamics”
Prices did not move against USD after the Friday QE2 confirmation, suggesting again the QE2 expectation is already priced and maybe it will stop the USD weakness temporarily. A sharp drop in CRB and risk index could confirm this. Probably investor are already placed for November 3 Fed meeting and now there will be a wait-and-see mode. Even if risk is on, I will expect potential further up move for EURUSD not exceeding the 1.41/1.42 levels, but probably a trading range around the 1.38 level as a consolidation, as grid mean (but end of year outlook is 1.45/1.5). QE2 will be supportive for risk on because it will give money to big guys to invest in risky markets; so I am long of risk currency against USD (not JPY). Maybe it will be less stronger than QE1 because the expectations are like this. I will look to spread Greek German bonds and US, JGB in general. Unilateral BoJ intervention is expected again, especially if prices drops below 80 handle. I will put ISDJPY stops t protect against USDJPY weakness.

Median grid
EURUSD GRID 1.340 - 1.42, (grid change), up bias
USDJPY GRID 84.00-88.00, neutral bias
AUDJPY GRID 73.00-81.00, long bias

Prices
US  up at 1174 , (+30, Q2)
GOLD up at 1368 (+30$, Q4+), all time high
Crude 81.4 (-1$)
EURUSD 1.3975 (+0. 040, Q3)
USDJPY 81.46(-0.30, Q2)

3.  Plan
I will try again profit of this risk on sentiment, entering long EURUSD on dips; prudence at these lofty levels. Still long USDJPY expecting BoJ intervention, but add stops

EURUSD
I will enter a long B&B on the yob level (1.3730) as retracement after a 1.3900 clear break; I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips
Comment:<I did a short instead >

USDJPY
Comment:< Still underwater…>

AUDJPY
Comment:< >

EURNOK
Comment:< >
4.  Trades
4.1 open trades, their type & their value:

1 Open    05-set-10 USDJPY L 84.2600 83.2600 Q1 0.2 B&B 81.47    -279.0000 -27.9000 -19.932
Open    07-ott-10 USDJPY L 82.3600 83.2600 Q1 0.2 B&B 81.47    -89.0000-8.9000 -6.36
4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 3:1)
Total positions per currency:
USDJPY  +2
EURUSD 0
AUDJPY 0
Position
USDJPY -28.0, -7
EURUSD 0
AUDJPY 0

4.3  Effect of planned trades

Account summary:
Saxo live account
Starting capital: 1000
Line in the sand level:  7500
1.  Account balance (Settled trades) and growth as a percentage.  (9985=-0.15%)
2.  Account equity (Including open positions) .  (9978= -0.25%)
3.  Account equity if planned trades go wrong: 9973
4.  Pip distance to line in the sand level.   2475, with gear (0.2) 12000

Daily Briefing 101011

1.  Review.

I said “I will look for potential further up move for EURUSD to the 1.4 area and a break of the 1.35 level would be a potential for a consolidation”. EURUSD reached the 1.4026 and retraced to 1.3900 after NFP; it looks like a consolidation move around those values. USD was under pressure waiting for a non good <nfp announcing a new QE2. “Price is pricing US QE expectation, then I will be data watching to see Fed reaction for QE and for risk on support. I will look to spread Greek German bonds and US, JGB in general.” Greece bonds spread deceased and JGB and US 10 years are at historical low. “ Unilateral BoJ intervention is expected again. After the 83.6 test I do not expect to be broken if data will be good for risk on.” BoJ announced further policy stimulus but the market did not paid attention to it. ” Friday job report could be a driver event for USD weakness.” After a USD selloff spike prices did not move that much after announcement.
Trades
EURUSD contra trade short at 1.396 and another long <USDLPY at 83.30 (this bet on JPY weakness is costing me a lot of money).

2.  Analysis.

"Fundamental analysis"
Lack of immanent bad new drove the EUR up to 1.4, mostly a lack of risk off derivers. Bad US NFP, last before next FCOM meeting is viewed as a confirm for the next QE2. Good data came from German industrial production; best then expected AUD employment data support risk on environment. USD and JPY rates are at lowest levels. Lack of use of JPY as carry currency is something new to be watched; maybe USD only is enough to do carry trades. Total lack of bad news from risk generator events (PIIGS and China bubble) are driving a risk on, essentially good for currencies versus USD.

"Technical analysis"
EURUSD tested the 1.40 levels; the move could have a correction, because the move was quick and strong, mainly because of lack of risk off data. COT data are below. USD index broke the 80 support area and is trading 77-78; USDJPY traded in the 82-83 area, making a fresh low at 81.75. Probably at this level BoJ would intervene. US futures jumped again in to the 1140, closing above 100 and 200 MA: it look like a break to new highs. GOLD/Oil ratio stable; VIX stable to low levels.
COT JPY up at 45.9k (+15k)
COT USD down at -1.5k (-3k)
COT EUR up to 48.5k (+7k)
COT stable AUD 69.5k
TYN down to 2.39%
JGB down to 0.87%
Bunds down to 2.25%.

German/Greece down to 7.5%
VIX down to 20.71
Gold/Oil down to 16.25

"Market dynamics”
Prices did not move against USD after the NFP, maybe the QE2 expectation is already priced and maybe it will stop the USD weakness temporarily. I will not expect potential further up move for EURUSD to the 1.4 but a trading range around the 1.38 level as a consolidation, waiting for more QE2 confirmation, for the moment (but end of year outlook is 1.45/1.5). I will be data watching to see Fed reaction for confirmation QE and for risk on support. QE2 will be supportive for risk on because it will give money to big guys to invest in risky markets. Maybe it will be less stronger than QE1 because the expectations are like this. I will look to spread Greek German bonds and US, JGB in general. Unilateral BoJ intervention is expected again, especially if prices drops below 82 handle.

Median grid
EURUSD GRID 1.340 - 1.42, (grid change), up bias
USDJPY GRID 84.00-88.00, neutral bias
AUDJPY GRID 73.00-81.00, long bias

Prices
US up at 1160 , (Q1)
GOLD up at 1346 (Q4), all time high
Crude 82.81
EURUSD 1.3933 (Q3)
USDJPY 81.91(Q1--)

3.  Plan
I will try again profit of this risk on sentiment, entering long EURUSD on dips; prudence at these lofty levels. long USDJPY expecting BoJ intervention

EURUSD
I will enter a long B&B on the yob level (1.3730) as retracement after a 1.3900 clear break; I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips
Comment:< >

USDJPY
Comment:< >

AUDJPY
Comment:< >

EURNOK
Comment:< >

4.  Trades
4.1 open trades, their type & their value:
3 Open 07-ott-10 EURUSD S 1.3970 1.3820 Q2 0.2 Contra 1.3933 37.0000 3.7000 2.66
1 Open 05-set-10 USDJPY L 84.2600 83.2600 Q1 0.2 B&B 81.92 -252.0000 -25.2000 -16.7

2 Open 07-ott-10 USDJPY L 82.3600 83.2600 Q1 0.2 B&B 81.91 -45.0000 -4.5000 -3.21
4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 3:1)

Total positions per currency:
USDJPY +2
EURUSD +1
AUDJPY 0
Position
USDJPY -16.0, -3.2
EURUSD +2.66
AUDJPY 0

4.3  Effect of planned trades

Account summary:
Saxo live account
Starting capital: 1000
Line in the sand level:  7500

1.  Account balance (Settled trades) and growth as a percentage.  (9985=-0.15%)
2.  Account equity (Including open positions) .  (9978= -0.25%)
3.  Account equity if planned trades go wrong: 9973
4.  Pip distance to line in the sand level.  2475, with gear (0.2) 12000

Daily Briefing 101004

1.  Review.

I was away from markets for a couple of weeks. I need to reenter and get the feeling of what is going on
Trades
No new trades this week.

2.  Analysis.

"Fundamental analysis"
Data confirmed a reverse in short term market sentiment to risk on, even with bad US data. Tuesday bad US consumer confidence index acted as catalyst for USD selling. Markets gave to Ireland a rest but Spain economy is getting worse and if it will be the next target it will put lot of pressure on EUR; Greece spread decreased, but sovereign default are not imminent to send EUR to zero. Good data should be risk on positive until the US is out of double dip risk, then USD differential should play in favor of the USD.

"Technical analysis"
EURUSD trended quickly to the 1.37 levels; the move could be have a correction, even with no real data to support. COT data are below. USD index broke the 80 support area and is trading 81-82; USDJPY traded in the 78 area, making a fresh low at 78.22. Probably is staying down here in these dips. US futures jumped again in to the 1140, closing above 100 and 200 MA: it look like a break to new highs. GOLD/Oil ratio stable; VIX stable to low levels.
COT JPY down at 28.9k
COT USD down at 1.3k
COT EUR up to 35.5k
COT AUD 69.5k
TYN down to 2.5%
JGB down to 0.96%
Bunds down to 2.28%.

German/Greece down to 7.85%
VIX stable to 22.5
Gold/Oil down to 16.1

"Market dynamics”
I will look for potential further up move for EURUSD to the 1.4 area and a break of the 1.35 level would be a potential for a consolidation. Price is pricing US QE expectation, then I will be data watching to see Fed reaction for QE and for risk on support. I will look to spread Greek German bonds and US, JGB in general. Unilateral BoJ intervention is expected again. After the 83.6 test I do not expect to be broken if data will be good for risk on. Friday job report could be a driver event for USD weakness.

Median grid
EURUSD GRID 1.320 - 1.380, (grid change), up bias
USDJPY GRID 84.00-88.00, neutral bias
AUDJPY GRID 73.00-81.00, short bias

Prices
US up at 1140, (Q4)
GOLD up at 1308 (Q4+), all time high
Crude 81.27
EURUSD 1.2375 (Q4)
USDJPY 83.28(Q1)

3.  Plan
I will try again profit of this risk on sentiment, entering long EURUSD on dips and log USDJPY expecting BoJ intervention

EURUSD
I will enter a long B&B on the yob level (1.3658) as retracement after a 1.3800 clear break; I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips
Comment:<No retracement >

USDJPY
Comment:< >

AUDJPY
Comment:< >

EURNOK
Comment:< >

4.  Trades
4.1 open trades, their type & their value:
2 Open 13-ago-10 EURUSD L 1.2873 1.1673 Q3 0.2 B&B 1.2724 -149.0000 -14.9000 -11.71
1 Open 05-set-10 USDJPY L 84.2600 83.2600 Q1 0.2 B&B 83.32 -92.0000 -9.2000 0.00

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 -9.0
EURUSD 0
AUDJPY 0

4.3  Effect of planned trades

Account summary:
Saxo live account
Starting capital: 1000
Line in the sand level:  7500

1.  Account balance (Settled trades) and growth as a percentage.  (9985=-0.15%)
2.  Account equity (Including open positions) .  (9975= -0.25%)
3.  Account equity if planned trades go wrong: 9973
4.  Pip distance to line in the sand level.  2475, with gear (0.2) 12000