Daily Briefing 110328

1.  Review.

I said “EUR going up and USD going UP. I still maintain bullish view on EURUSD. Probably we adjust the grid with a 1.40 floor to go ahead to 1.44/45 level.” Yes, we adjusted the grid. “ Probably we will stay in the new grid for a month or two and I am expecting the 1.4 as support and a USD resell area for a dip. Any EZ long term dips are still going to be bought”. The Portugal downgrade is a 1.4080 buying opportunity. “Dips in USDJPY are a buying opportunity. I will buy USDJPY if back in the 79 area”. It did not all the week long and then I bought at 80.90. “Risk aversion for Middle East events should be considered.” Still protest in Yemen and not a clear Libya resolution.
Trades
I missed the EURUSD dip at 1.4050, again. Bought JPY @ 80.90.

2.  Analysis.

"Fundamental analysis data"
USD New home sales down 250K 291K 301K
German Ifo slightly down (111 110 111)
EZ PMI positive
US Unemployment down 382K 338K 387K
"Fundamental analysis"
Despite events investors maintained a risk on view based on that the recovery is on-going . Stock (US and Japan) raised, as Commodities and TYN fell, showing a reduced safe heaven demand (and suggesting that a QE3 is not on the table).
I maintain last week a big picture view, where there is:
- an on-going global recovery
- commodities and risk asset positive
- divergence in FED and BCE monetary policy, even if for short time because QE3 could be not on the table
Risk off events in Libya and MENA could rise oil prices and commodities.
Long term outlook remains USD bullish, JPY and but CHF bearish is under question.
China growth is not in discussion; they government will make it work at the right pace.
Portugal crisis did not harmed too much EUR strength, because it appears known and compartmentalized.
"Technical analysis"
The Dollar index going ahead to the November low 75.3 at to 75.76
EURUSD after breaking the 1.40 resistance, stopped at the next resistance at 1.42, October high and is back to 1.408. COT data are below. Dollar index hold at 76 support . EUR long are very high and increasing. USDJPY had a flat week BOJ intervention at 81. GOLD/Oil ratio declined to 13.5; VIX is 18 after 31 highs.
COT USD up to -14k (+1k)
COT JPY up at +35k (+5k)
COT EUR at 48k (+3k)
COT AUD up 51k (+4k)
COT CHF up 21k (-7k)
TYN to 3.43% (+0.18%)
JGB at 1.22% (+0.01%)
Bunds at 3.27%. (+0.09%)
German/Greece up to9.2% (+0.1%)
VIX to 18 (-6)
Gold/Oil to 13.5 (-0.4)

"Market dynamics”
Long term view:
- EUR going up (EZ and global economic growth and interest rate hikes), and this is going on now.
- USD going UP (US and global economic growth and interest rate hikes), and this is going to happen as it is clear that there not QE3, maybe in a couple of months.
- CHF, is going exponentially up because of picking up the JPY lost safe heaven status
- JPY, is going to go down (bad economic slump and lost safe heaven status)
I still maintain bullish view on EURUSD. Probably we adjust the grid with a 1.40 floor to go ahead to 1.44/45 level. Probably we will stay in the new grid for a month or two and I am expecting the 1.4 as support and a USD resell area for a dip. Any EZ long term dips are still going to be bought. Next ECB meeting in April and rate hike is fully priced in and there are risk for the down side.
US Friday employment data are expected positive and then supporting risk-on environment.
US higher rates should support a higher USDJPY. Dips in USDJPY are a buying opportunity. I will buy USDJPY if back in the 79 area.
I see JPY cross strength emerge in the weeks ahead, like AUDJPY and CADJPY (end of month activity could result in choppy USD activity, so better stay focused on JPY crosses). I will look for breaks of current resistances.
Risk aversion for Middle East events should be considered.

Median grid
EURUSD GRID 1.380 - 1.440, up bias
USDJPY GRID 80.00-84.00, up bias
AUDJPY GRID 78.00-86.00, up bias
USDCHF GRID 0.8725-0.925, neutral bias

Prices
US at 1274, (-30, Q4),
GOLD to at 1429, (+10, Q4+)
Crude 105.4 (+4.0$)
EURUSD 1.4081 (-0.1, Q3)
USDJPY 81.33 (+0.5, Q2)
AUDJPY 83.44 (+3.5 Q3)

3.  Plan

EURUSD
Long at 1.4080
Comment:< >

USDJPY
Already enough longs
Comment:< >

AUDJPY
Long on a dip at 82.7
Comment:< >

USDCHF
See if resistance at 0.93 holds. If yes, short at 0.912
Comment:< >

4.  Trades
4.1 open trades, their type & their value:
12 Open17-gen-11 EURUSD S 1.3270 1.3420 Q2 0.2 B&B 1.4081 -811.0000 -57.6000
3 Open 18-feb-11 EURUSD S 1.3624 1.3774 Q2 1 B&B 1.4081 -456.0000 -162.0000
1 Open 10-mar-11 USDCHF L 0.9321 0.9171 Q2 1 B&B 0.9195 -126.0000 -63.5000
2 Open 10-mar-11 USDCHF S 0.8979 0.9129 Q1 1 Hedge 1 Open 0.9195 -216.0000 -108.0000
2 Open 24-mar-11 USDJPY L 81.0100 80.0100 Q2 1 B&B 81.33 32.0000 15.43
Leverage

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

Total positions per currency:
USDJPY +1
EURUSD -2
USDCHF +1, -1
AUDJPY 0
Position
USDJPY 15
EURUSD -57, -162
USDCHF -126, -63
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.  (9647=-3.96%)
2.  Account equity (Including open positions) .  (9855= -1.4%)
3.  Account equity if planned trades go wrong: 1011
4.  Pip distance to line in the sand level.  2151, with gear (2) 1075

Daily Briefing 110321

1.  Review.

I said “Probably stay in the sideline watching positions how evolve. EUR going up and USD going UP. I still maintain bullish view on EURUSD till 1.40/1, probably we will stay in the current grid for a month or two and I am not expecting a 1.4 imminent breakout at this moment, but there is anyway a potential upside to 1.425, because the 1.38 area holds”. Again, I did not act as I planned. Euro is 1.418 and I did not added any long on the 1.388 dip. “ Probably we will have a dip on ESM expectation for a couple of weeks; I should look to marker reaction after EU agreement and see bond spread for sovereign debt. It looks market is not focused now. Any EZ long term dips are still going to be bought.” That’s true, but again, I did not. I have to solve these psychological problems …”I will buy USDJPY if back in the 81 area, at 81.66, if the 81 level hold.” What a 77.03 dip! I did not profit from BOJ intervention, when it was quite clear to try a JPY short at 78.7
Risk aversion for Middle East events should be considered.”
Trades
Entered a long USDJPY @ 77.98 and AUDJPY @ 76.64. I missed the EURUSD dip, again.
Closed JPY shorts. Edged USDCHF

2.  Analysis.

"Fundamental analysis data"
German ZEW down (14.1% 16.2% 15.7%)
US Building permits down (0.52M 0.58M 0.56M)
US PPI up (1.6% 0.7% 0.8%)

US CPI up m/m (0.5% 0.5% 0.4%)
Phil Fed Man. Index (43 29 35)
"Fundamental analysis"
Main event was BOJ and G7 intervention. Further intervenes are foreseen to defend the 80 level. JPY will probably weaken in the coming months due a slow growth, BOJ easing and government borrowing.
After this furious week, I have to maintain a big picture view, where there is:
- an on-going global recovery
- commodities and risk asset positive
- divergence in FED (Q3) and BCE monetary policy
Risk off events in Libya and MENA could rise oil prices and commodities.
Long term outlook remains USD bullish, JPY and CHF bearish.
China growth is not in discussion; they government will make it work at the right pace.
EU meeting reached a deal on competitiveness pact. Some question from German government about the bailout fund. I take the side it will be solved. Peripheral spread are still high. Only a falter in the German economy would change this. There is a huge dips buying and this is EUR bullish.
EUR is now beneficiary for risk off, with JPY and CHF. Probably a temporary set, but it is lasting since weeks.
Issue is if speculator will focus on EUR now that BOJ is defending JPY crosses.
"Technical analysis"
The Dollar index going ahead to the November low 75.3 at to 75.76
EURUSD broke the 1.40 resistance. Next resistance one is 1.42, October high. COT data are below. EUR long are very high and increasing. USDJPY 80.6, see comment on BOJ intervention. COT had a big reversal versus JPY long. GOLD/Oil ratio declined to 13.7; VIX is 24 after 31 highs.
COT USD up to -15k (-9k)
COT JPY up at +30k (+15k)
COT EUR at 45k (-12k)
COT AUD up 47k (-25k)
TYN to 3.26% (-0.15%)
JGB at 1.21% (-0.04%)
Bunds at 3.18%. (-0.03%)

German/Greece up to9.1% (-0.6%)
VIX to 24.1 (+4)
Gold/Oil to 14.1 (+0.4)

"Market dynamics”
EUR going up and USD going UP. I still maintain bullish view on EURUSD. Probably we adjust the grid with a 1.40 floor to go ahead to 1.44/45 level. Probably we will stay in the new grid for a month or two and I am expecting the 1.4 as support and a USD resell area for a dip. Any EZ long term dips are still going to be bought. Dips in USDJPY are a buying opportunity. I will buy USDJPY if back in the 79 area.
Risk aversion for Middle East events should be considered.

Median grid
EURUSD GRID 1.340 - 1.400
USDJPY GRID 80.00-84.00, up bias
AUDJPY GRID 73.00-81.00, up bias
USDCHF GRID 0.925-0.975, up bias

Prices
US at 1274, (-30, Q4),
GOLD to at 1419, (+2, Q4+)
Crude 101.4 (+1.0$)
EURUSD 1.4181 (+0.18, Q4+)
USDJPY 80.59 (-1.5, Q2)
AUDJPY 80.23 (-3.5 Q4)

3.  Plan

EURUSD
Long on a huge dip
Comment:< >

USDJPY
Long at 80.17
Comment:< >

AUDJPY
Comment:< >

USDCHF
Comment:< >

4.  Trades
4.1 open trades, their type & their value:
12 Open17-gen-11 EURUSD S 1.3270 1.3420 Q2 0.2 B&B 1.4181 -911.0000 -64.6000

3 Open 18-feb-11 EURUSD S 1.3624 1.3774 Q2 1 B&B 1.4181 -556.0000 -196.0000
1 Open 10-mar-11 USDCHF L 0.9321 0.9171 Q2 1 B&B 0.9017 -25.0000 -134.5000
Leverage

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

Total positions per currency:
USDJPY 0
EURUSD -2
USDCHF +1, -1
AUDJPY 0
Position
USDJPY -22, -14
EURUSD -45, -99
USDCHF -10
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.  (9802=-1.96%)
2.  Account equity (Including open positions) .  (9542= -4.5%)
3.  Account equity if planned trades go wrong: 1011
4.  Pip distance to line in the sand level.  2151, with gear (2) 1075

Stefano Piovesan Daily Briefing 110315

1.  Review.

I said “EUR going up and USD going UP. I maintain bullish view on EURUSD till 1.40/1, probably we will stay in the current grid for a month or two and I am not expecting a 1.4 imminent breakout at this moment, but there is anyway a potential upside to 1.425 if 1.38 area holds. Probably we will have a dip on ESM expectation for a couple of weeks: market will see sovereign debt as a threat if a failure to have a credible mechanism, causing pressure for EUR This will allow to reposition shorts and ad a long positions. Any EZ long term dips are going to be bought.” EURUSD dipped until Friday to 1.378 and rallied back on risk off earth quack event. EU FM meeting was overshadowed by events. “I will buy USDJPY if back in the 81 area, at 81.66.” I should reconsider, because last earth quack caused a massive JPY rally. “I will buy USDCHF at 0.931, breaking the 0.93 resistance. Risk aversion for Middle East events should be considered.” US data were not too much supportive for this action. No riots in Arabia for now.
Trades
Entered a long USDCHF 0.931. I missed the EURUSD dip.

2.  Analysis.

"Fundamental analysis data"
German factory order down 2.9% 2.6% -3.6%
German Production m/m up 1.8% 1.8% -0.6%
US Unemployment claims larger than expected (397K 375K 371K)

CYN trade balance unexpected but negative (-7.3B 4.9B 6.5B)
US retail sales up (192K 191K 63K)
UoM down (68.2 77.0 77.5)
"Fundamental analysis"
Speculation on risk off events in Libya and oil prices beneficed mainly JPY and CHF. USD stayed in the sidelines but at the end of the wee yields felled for safe heaven buying.
Long term outlook remains USD bullish, JPY and CHF bearish.
EU meeting reached a deal on competitiveness pact, probably some restructuring and default ahead. Rates must adapt to inflationary pressure and need action for aid mechanism. EU authorized 440 billion spending EU peripheral spread to historical highs. Medium and long term outlook for EUR is bullish too, probably with large dips. Only a falter in the German economy would change this. There is a huge dips buying and this is EUR bullish.
EUR is now beneficiary for risk off, with JPY and CHF. Probably a temporary set.
Petrodollars are buying EUR (not USD) while selling CHF, too strong, causing huge flows for EUR.
AUD fell after CNY data.
"Technical analysis"
The Dollar index recovered from low since November to 77.6
EURUSD held at 1.38, falling 1.40 high. Next resistance one is 1.42. COT data are below. EUR long are very high and increasing. USDJPY 81.9, in the support 82 from 83, but earth quack effect are still developing. COT had a big reversal. GOLD/Oil ratio declined to 13.7; VIX is 19 after 23 highs.
COT USD up to -6k (+1k)
COT JPY up at 16k (-25k)
COT EUR at 62k (+11k)
COT AUD up 73k (+2k)
TYN to 3.4% (-0.1%)
JGB at 1.25% (-0.05%)
Bunds at 3.21%. (-0.5%)

German/Greece up to9.6% (+0.7%)
VIX to 20.1 (+1)
Gold/Oil to 14.1 (+0.4)

"Market dynamics”
Probably stay in the sideline watching positions how evolve.
EUR going up and USD going UP. I still maintain bullish view on EURUSD till 1.40/1, probably we will stay in the current grid for a month or two and I am not expecting a 1.4 imminent breakout at this moment, but there is anyway a potential upside to 1.425, because the 1.38 area holds. Probably we will have a dip on ESM expectation for a couple of weeks; I should look to marker reaction after EU agreement and see bond spread for sovereign debt. It looks market is not focused now. Any EZ long term dips are still going to be bought.
I will buy USDJPY if back in the 81 area, at 81.66, if the 81 level hold.
Risk aversion for Middle East events should be considered.

Median grid
EURUSD GRID 1.340 - 1.400
USDJPY GRID 80.00-84.00, up bias
AUDJPY GRID 73.00-81.00, up bias
USDCHF GRID 0.925-0.975, up bias

Prices
US at 1306, (-20, Q4),
GOLD to at 1417, (-13, Q4+)
Crude 100.4 (-4.0$)
EURUSD 1.3902 (-0.08, Q2)
USDJPY 81.85 (-0.5, Q2)
AUDJPY 82.98 (-0.5 Q4+)

3.  Plan

EURUSD
Long on a huge dip
Comment:< >

USDJPY
Long at 81.66
Comment:< >

AUDJPY
Comment:< >

USDCHF
Long at 0.931
Comment:< >

4.  Trades
4.1 open trades, their type & their value:
1 Open 05-set-10 USDJPY L 84.2600 83.2600 Q4 0.2 B&B 82.3 -216.0000 -22.3000
3 Open 13-dic-10 USDJPY L 83.4800 83.2600 Q4 0.2 B&B 82.3 -138.0000 -14.5000
12 Open17-gen-11 EURUSD S 1.3270 1.3420 Q2 0.2 B&B 1.3902 -613.0000 -45.6000

3 Open 18-feb-11 EURUSD S 1.3624 1.3774 Q2 1 B&B 1.3986 -278.0000 -99.0000
1 Open 10-mar-11 USDCHF L 0.9321 0.9171 Q2 1 B&B 0.9296 -25.0000 -12.5000
Leverage

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

Total positions per currency:
USDJPY +2
EURUSD -2
USDCHF +1
AUDJPY 0
Position
USDJPY -22, -14
EURUSD -45, -99
USDCHF -10
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.  (9832=-1.6%)
2.  Account equity (Including open positions) .  (9651= -3.6%)
3.  Account equity if planned trades go wrong: 1011
4.  Pip distance to line in the sand level.  2151, with gear (2) 1075