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