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
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