Daily Briefing 101221

1.  Review.

I said “After bottoming at 1.3 the EURUSD rebound could be short lived. Probably the EUR is not stopping here and a real support could be the 1.27/8 level. So I would sell EURUSD on rallies, rather than buying on dips.” EURUSD rallied to 1.35, but then back to 1.3187. Rally was probably for negative US tax cut announcement. Any way the dollar ended at December highs at the end of the week. USDJPY is capped at 84.3/4 levels and a presumable top on US yields could put downside pressure on the pair.
Trades
Closed EURUSD long at 1.347 (-150 pips) and added a USDJPY long at 83.48.

2.  Analysis.

"Fundamental analysis data"
US Core retail sales, PPI and CPI were greater than expected
US unemployment claims were stable at 420k
ZEW (EU and German better than expected).
German ifo at highest levels (109) since German reunification in 1991.

"Fundamental analysis"
US tax cut: even if there was a USD sell off on the new, at the end the tax cut can be viewed positively because: 1) it can be viewed as another fiscal stimulus, improving the US growth and reducing the likelihood of QE3, a major dollar negative event. 2) a raise in the USD yields, supportive for the dollar and the prospect of a need of higher interest rates. In the near term FED assurance that interest rates will remain low, will add limit to the dollar upside.
EUR: a permanent resolution mechanism was agreed in case of sovereign debt crisis starting from 2013. Euro bong proposed idea need to mature again.
UK data was mixed, but the market focused on bad outlook and we believe further growth downside is ahead. Gold and silver remains a strong demand because of investor differentiations against fiat money.
Oil demand for 2011 was revisited at the upside, stockpiles are declined; oil price is revised on the upside in the next weeks.

"Technical analysis"
EURUSD bottomed at 1.313 after recovering to 1.34. A close below 1.31 would suggest a test of the 1.2970 level. A clear breakout will lead at the 1.26/7 area.
US yield looks like to have reached a top, confirmed by the USDJPY capped at 84.4
COT JPY up at 18k (-30k)
COT USD up to 30.4k (-16k)
COT EUR at 41.1k (+3k)
COT AUD up 74k (+17k)
TYN up to 3.32% (-0.2%)
JGB at 1.2% (+0.03%)
Bunds at 3.02%. (+0.8%)

German/Greece up to 8.89% (+0.1%)
VIX down to 16.1 (-2.2)
Gold/Oil up to 15.5 (-0.5)

"Market dynamics”
After bottoming at 1.3 the EURUSD rebound was short lived. Probably the EUR is not stopping here and a real support could be the 1.27/8 level. So I would sell EURUSD on rallies, rather than buying on dips. Especially on this December tiny and volatile market.

Median grid
EURUSD GRID 1.310 - 1.37, down bias
USDJPY GRID 80.00-84.00, up bias
AUDJPY GRID 73.00-81.00, long bias

Prices
US up at 1228, (+18, Q4)
GOLD to at 1375, (+25, Q4+)
Crude 88.6 (+0.3$)
EURUSD 1.3180 (-0. 08, Q1)
USDJPY 84.0 (-0.4, Q4)
AUDJPY 82.95 (+-0.9, Q4+)

3.  Plan
No big plans: try to fix the loss in EURUSD and square USDJPY

EURUSD
I will enter a short if resistance 1.34 holds and enter a short B&B on the yob level (1.3255) and maybe another lot at 1.3105. I will hedge on a couple of level up (-100 pips). I will take profit at 50-100 pips.
Comment:< >

USDJPY
I will add a dip: I will enter a long if support 82.5 holds and enter a long B&B on the yob level (83.17). I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips. Comment:< >

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 84 -26.0000 -6

3 Open 13-dic-10 USDJPY L 83.4800 83.2600 Q1 0.2B&B 84 52.0000 5.2000 3.714.2
9 Open 29-nov-10 EURUSD S 1.3097 1.3247 Q2 0.2 Hedge (8) 1.3182 -85.0000 -8.5000
Leverage

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

Total positions per currency:
USDJPY +2
EURUSD -1
AUDJPY 0
Position
USDJPY -6,+5
EURUSD -7
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.  (10032=0.3%)
2.  Account equity (Including open positions) .  (10019= +0.2%)
3.  Account equity if planned trades go wrong: 1011
4.  Pip distance to line in the sand level.  2500, with gear (0.2) 12000