Daily Briefing 100726

1.  Review.

I wrote “EURUSD rally seems to be likely a short sell covering… Dirk’s views is instead bullish on EURUSD … bank stress should not cause more stress. So it looks like that the EURUSD downtrend is broken and the EURUSD bias is to be set to long”. Bank test were issued and they did not caused much stress, EURUSD is still 1.2910. US data was confirming weakness in recovery. EU data instead confirmed an unexpected strong rise in economy.
Trades
Holding the “only” -472€ at the end of the week , looking for the expected risk on increase to decrease the drawdown.

2.  Analysis.

"Fundamental analysis"
Last week was characterized again by a dollar weakness, undermined by a potential slow down in the recovery. with no really good fundamentals data. EURUSD recovery, risk currency as AUDJPY and EURNOK gained; gold din not surged despite USD loss and JPY loose a little versus the dollar too. Fed said that economy may not regain its path until 2016, calling for more QE and moving forward rate hikes expectances.

"Technical analysis"
EURUSD stayed around 1.3 levels. It would be anymore short on rallies but long positions could be taken on dips. EUR COT short decreased again (-24k), USD long are stable (+14k), showing the big divergence is finally converging and USD index is pointing to the 80 support area; JPY is now big long (+40k). USDJPY traded in the 87 area. Probably is staying down here in these dips. US futures retested the 1100 highs. AUD are little increasing (32k), showing again the end of the unwinding of the risk on positions. GOLD/Oil ratio is stalling at 15 since begging of July; but VIX is still quite volatile now at 23, pointing for a small risk off decreasing. Gold after the double top time at 1266 high is now at 1188, pointing to test the 1166 low.

"Market dynamics”
EURUSD rally seems to be likely to stay at the 1.3 levels, as median (1.25 and 1.32 levels would be the range); bank stress failed to drain out uncertainness and to be a strong reversal turnaround (UBS fail to say). It looks like that the EURUSD downtrend is broken and the EURUSD bias is to be set to long and I will enter on long on dips below the 1.3 level. No big releases this week and I will look on that as confirmation about EZ strength and US weakness. High uncertainty is still alive and short term view should be taken. JPY lost against risk currency, and USD too. I will expect a strong JPY against US; BoJ intervention is expected below 85. I will enter a very quick short trade at 88 looking to reverse for a long term long position from the 85/86 levels. Long term outlook is anyway positive for AUD and CAD. Weakness of JPY cross are more for risk off view (JPY as safe heaven) then for bad foundamentals.

Median grid
EURUSD GRID 1.250 - 1.320, (grid change), long bias
USDJPY GRID 88.00-92.00, neutral bias
AUDJPY GRID 73.00-81.00, short bias

Basically still a risk-on bias by the end of week

Prices
US up at 1100, (Q4)
GOLD down at 1188 (Q2)
Crude 78.5
EURUSD 1.2910 (Q1+)
USDJPY 87.5 (Q1-)

3.  Plan
I will try again to work out of the money positions for JPY longs (too bad);

EURUSD
I will enter a long B&B on the yob level (1.2558) as retracement; I will hedge on a couple of level down (-100 pips). I can open a new toe in long same level. I will take profit at 50-100 pips
Comment:< >

USDJPY
Already too many positions (+5)
Comment:< >

AUDJPY
Close the shorts on a dip (75)
Comment:< >

EURNOK
Hold short positions
Comment:< >

4.  Trades
4.1 open trades, their type & their value:

2 Open 13-apr-10 USDJPY L 93.2400 Q3 1:1 toe-in 87.45 -579.0000
6 Open 05-mag-10 USDJPY L 94.5900 Q2 1:1 toe-in 87.45 -714.0000
10 Open 06-mag-10 USDJPY L 93.8600 Q3 1:1 Panic 87.45 -641.0000
16 Open 14-mag-10 USDJPY L 92.3000 Q1 1:1 B&B 87.45 -485.0000

18 Open 02-giu-10 USDJPY L 92.2100 Q2 1:1 B&B 87.45 -476.0000
6 Open 04-mag-10 AUDJPY L 86.0500 Q4 1:1 toe-in 78.13 -774.0000
7 Open 06-mag-10 AUDJPY L 85.1300 Q4 1:1 toe-in 78.13 -662.0000
17 Open 03-giu-10 AUDJPY L 78.8500 Q1- 1:1 Hedge 78.13 -64.0000

4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 4:1)

Total positions per currency:
USDJPY +5
EURUSD 0
AUDJPY +3
Position
USDJPY -579, -714,-641, -485, -476
EURUSD 0

AUDJPY -774, -662, -64

4.3  Effect of planned trades

Account summary:
ActivTrades live account
682Starting capital: 1366
Line in the sand level:  750

1.  Account balance (Settled trades) and growth as a percentage.  (1445=5%)
2.  Account equity (Including open positions) .  (10413= -24%)
3.  Account equity if planned trades go wrong: 1000
4.  Pip distance to line in the sand level.  2913, with gear (8) 364

Daily Briefing 100718

1.  Review.

I was confident the risk-on rally was a little bit more sustained, but a strong reversal occurred at the end of the week, even for the bad data from US. Even if it is form a couple of weeks ago, I do not think anymore that EURUSD rally is only short covering, but the down trend looks like to be broken. S&P 1100 resistance hold on and AUDJPY 77.5 support was easily broken to 75.
Trades
No trades done, but the “only” -400€ at the beginning of the week is now -674€.

2.  Analysis.

"Fundamental analysis"
Last week was characterized again by a dollar weakness, undermined by a potential slow down in the recovery. with no really good fundamentals data. Manufacturing index, UoM sentiment an d unemployment data were lower than expected. TIC were low, showing that USD safe haven buying is slowing down. EURUSD recovery, but no risk currency gained the same time; gold din not surged despite USD loss and JPY gained versus the dollar too. US deficit and QE is becoming more a issue (

http://www.telegraph.co.uk/finance/currency/7893238/Feds-volte-face-sends-the-dollar-tumbling.html), alarming that a double dip recession is coming. Fed said that economy may not regain its path until 2016, calling for more QE and moving forward rate hikes expectances.

"Technical analysis"
EURUSD left historical lows and now is in the current Q1 levels range (short bias) at 1.24. It would be still short on rallies. Key support are 2006 1.18 and 2005 1.63 lows. EUR COT short decreased in a jump (-27k), USD long are decreasing (+14k), showing the big divergence is finally converging; JPY is now big long (+47k). USDJPY traded in the 88 area, breaking down in the 86 area. Probably is staying down here in these dips. US futures retested and failed to break the 1100 highs. AUD are little increasing (23k), showing again the end of the unwinding of the risk on positions. GOLD/Oil ratio is stalling at 15 since begging of July; but VIX is still quite volatile now at 26, pointing for a small risk off decreasing. Gold after the double top time at 1266 high is now at 1192, pointing to test the 1166 low.

"Market dynamics”
EURUSD rally seems to be likely a short sell covering; bank stress test expected to drain out uncertainness and to be a strong reversal turnaround (UBS). Dirk’s views is instead bullish on EURUSD (Goldman Sachs is expecting a 1.35 EURUSD and a USDJPY to 83 by the end of the year). European debt is likely to be solved (or at least there is a plan for it) and bank stress should not cause more stress. ECB is not going to do rate hikes before the Fed and the Fed is not going to do it by this year, looking to the bad economic data. So it looks like that the EURUSD downtrend is broken and the EURUSD bias is to be set to long. High uncertainty is still alive and I would not add other risk positions. JPY gained against every currency, USD too. China data were not too hot and did not added stress to the market; also the housing bubble is not going to come and government is managing carefully the issue.

Median grid
EURUSD GRID 1.220 - 1.280, long bias
USDJPY GRID 88.00-92.00, neutral bias
AUDJPY GRID 74.00-82.00, short bias

Basically still a risk-off bias by the end of week

Prices
US down at 1062, (Q2)
GOLD down at 1192 (Q2)
Crude 75.5
EURUSD 1.2930 (Q1+)
USDJPY 86.5 (Q1-)

3.  Plan
What to say: quite close to the line in the sand … I will try to work out of the money positions for JPY longs (too bad);

EURUSD
I will enter a long B&B on the yob level (1.2558) as retracement; I will hedge on a couple of level down (-100 pips). I can open a new toe in long same level. I will take profit at 50-100 pips
Comment:< >

USDJPY
Already too many positions (+5)
Comment:< >

AUDJPY
Close the shorts on a dip (75)
Comment:< >

EURNOK
Hold short positions
Comment:< >

4.  Trades
4.1 open trades, their type & their value:

2 Open 13-apr-10 USDJPY L 93.2400 Q3 1:1 toe-in 86.57 -667.0000
6 Open 05-mag-10 USDJPY L 94.5900 Q2 1:1 toe-in 86.57 -802.0000
10 Open 06-mag-10 USDJPY L 93.8600 Q3 1:1 Panic 86.57 -729.0000
16 Open 14-mag-10 USDJPY L 92.3000 Q1 1:1 B&B 86.57 -528.0000

18 Open 02-giu-10 USDJPY L 92.2100 Q2 1:1 B&B 91.4000 -520.0000
6 Open 04-mag-10 AUDJPY L 86.0500 Q4 1:1 toe-in 75.21 -1084.0000
7 Open 06-mag-10 AUDJPY L 85.1300 Q4 1:1 toe-in 75.21 -992.0000
16 Open 20-mag-10 AUDJPY S 72.8800 Q1- 1:1 Hedge 75.21 -364.0000

4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 4:1)

Total positions per currency:
USDJPY +5
EURUSD 0
AUDJPY +2,-1
Position
USDJPY -667, -802,-729, -528, -520
EURUSD 0

AUDJPY -1084, -992 (-364)

4.3  Effect of planned trades

Account summary:
ActivTrades live account
Starting date: 1/4/2010
Starting capital: 1366
Line in the sand level:  750

1.  Account balance (Settled trades) and growth as a percentage.  (1445=5%)
2.  Account equity (Including open positions) .  (9226= -30%)
3.  Account equity if planned trades go wrong: 1000
4.  Pip distance to line in the sand level.  1700, with gear (8) 215

Daily Briefing 100621

1.  Review.

I said “BoJ declared that they would not allow a strong yen and perhaps the pattern risk off/ strong yen will be limited, and maybe visible more on other crosses, like AUDJPY as expression of risk sentiment. I will remain short an EURUSD on medium basis, looking for sell on retracement, in the 1.23-1.24 area. High uncertainty is still alive and I would not add other risk positions” . USDJPY made some gain instead, reaching the 91 handle in the risk off sentiment at end of the week; instead AUDJPY stead at the same price level around 79. EURUSD gained the 1.24 level, worth the waiting for a new short at that level. US futures stayed falt during the end of the week.
Trades
No trades this week in Taiwan.

2.  Analysis.

"Fundamental analysis"
Last week was characterized by a dollar weakness, undermined by a potential slow down in the recovery., with tension over the Europe and no really good fundamentals data. EURUSD recovery but no risk currency gained the same time; gold surged at new all time highs and JPY gained versus the dollar too. Fundamentals were bad: low than expected ZEW, Philly Fed index, TIC was higher (US safe heaven)and still job losses. Bond auction had no problems.

"Technical analysis"
EURUSD left historical lows and now is in the current Q1 levels range (short bias) at 1.24. It would be still short on rallies. Key support are 2006 1.18 and 2005 1.63 lows. EUR COT short decreased in a jump (-602k), USD long are still there (+21k), showing the big divergence start to converge; JPY short are quite stable (-3k). USDJPY traded in the 90.2-92 area, now at 90 area. It is dangerous to a buy on these dips. US futures retested and stalled at the 1100 high. AUD long stalled (12k), showing the end of the unwinding of the risk on positions. GOLD/Oil ratio is still high from a 13 in the last months to 16; but VIX is still decreasing to 23, pointing for a small risk off decreasing. Gold made a double all time high at 1257, very quickly.

"Market dynamics”
EURUSD rally seems to be likely a short sell covering. Bank stress test expected to drain out uncertainness. Next week sentiment indicator are to be monitored and bad data could trigger a sell of the EUR again. I will be in alert of risk reverse sing as 1100 level in S&P, 1.25 in EURUSD and 77.5 in AUDJPY. High uncertainty is still alive and I would not add other risk positions.

Median grid
EURUSD GRID 1.900 - 1.250, short bias (grid change)
USDJPY GRID 88.00-92.00, neutral bias
AUDJPY GRID 74.00-82.00, short bias

Basically still a moderate risk-on bias

Prices
US down at 1100, (Q2)
GOLD up at 1250 (Q2)
Crude 77.3
EURUSD 1.24 (Q1)
USDJPY 90.7 (Q1)

3.  Plan
I will try to work out of the money positions for JPY longs;.

EURUSD
I will enter a long B&B on the next yob level (1.235); I will hedge on a couple of level down (-100 pips). I can open a new toe in long same level. I will take profit at 50-100 pips
Comment:< >

USDJPY
Already too many positions (+5)
Comment:< >

AUDJPY
Close the shorts on a dip (75)
Comment:< >

EURNOK
Hold short positions
Comment:< >

4.  Trades
4.1 open trades, their type & their value: (TODO)

2 Open 13-apr-10 USDJPY L 93.2400 Q3 1:1 toe-in 90.70 -254.0000
6 Open 05-mag-10 USDJPY L 94.5900 Q2 1:1 toe-in 90.70 -389.0000
10 Open 06-mag-10 USDJPY L 93.8600 Q3 1:1 Panic 90.70 -316.0000
16 Open 14-mag-10 USDJPY L 92.3000 Q1 1:1 B&B 90.70 -147.0000

18 Open 02-giu-10 USDJPY L 92.2100 Q2 1:1 B&B 91.4000 -151.0000
6 Open 04-mag-10 AUDJPY L 86.0500 Q4 1:1 toe-in 77.81 -700.0000
7 Open 06-mag-10 AUDJPY L 85.1300 Q4 1:1 toe-in 77.81 -609.0000
16 Open 20-mag-10 AUDJPY S 72.8800 Q1- 1:1 Hedge 77.810 -616.0000

4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 4:1)

Total positions per currency:
USDJPY +5
EURUSD 0
AUDJPY +2,-1
Position
USDJPY -254, -389,-316, -147, -151
EURUSD 0

AUDJPY -700, -606 (-616)

4.3  Effect of planned trades

Account summary:
ActivTrades live account
Starting date: 1/4/2010
Starting capital: 1366
Line in the sand level:  750

1.  Account balance (Settled trades) and growth as a percentage.  (1345=1.6%)
2.  Account equity (Including open positions) .  (1157= -15%)
3.  Account equity if planned trades go wrong: 1000
4.  Pip distance to line in the sand level.  4076, with gear (6) 679

Daily Briefing 100615

1.  Review.

I said “Risk events are the EU finance minister meeting on Tuesday and the CNY CPI and other data on Thursday and Friday. Risk off sentiment looks like to last for some time (weeks?) so I will not add more risk positions to my portfolio. I will be a seller on EURUSD dips (UBS three month forecast is 1.15). JPY is expected to weaken for fundamentals (UBS three month forecast is 95), but near weakness is expected for risk aversion” . Chinese data were good for risk sentiment, and it was a week were risk sentiment rebounded (despite some weak data on Friday from US). EURUSD it going to reach the 1.23 target. Seeing the risk trade increasing I waited to add more risk positions and waited to sell the EURUSD. The 1.21 area was crowded and maybe the 1.23 is a more relaxed area. I will be in business trip in Far East and I don’t know how much I will be able to trade.
Trades
I close another USDJPY with a small loss. Still holding EURNOK shorts, despite the overshooting.

2.  Analysis.

"Fundamental analysis"
Global markets stabilized last week with no bad events and some good . Strong Chinese and Australian data prompted for risk on return. Fundamentals from US on Friday were somehow disappointing. Risk recovered marginally but doubts remains. Austerity measures are likely to undermine recovery and prices retested and hold recent lows, suggesting a consolidation instead of more risk taking actions.

"Technical analysis"
EURUSD after hit historical lows, and having strong break of the current Q1 levels range returned in the grid. It would be still short on rallies. Key support are 2006 1.18 and 2005 1.63 lows. EUR COT short are still decreasing at the historical lows (-112k), USD long are still there (+20k), showing a big divergence; JPY short are quite stable (-12k). USDJPY traded in the 90.2-92 area, now at 92 area. It is dangerous to a buy on these dips. US futures retested the 1100 high. AUD long decreased (+8k), unwinding the risk on positions. GOLD/Oil ratio is still high from a 13 in the last months to 16 and VIX is back to 28, pointing for a small risk off decreasing. Gold made a double top at 1252, very quickly.

"Market dynamics".
BoJ declared that they would not allow a strong yen and perhaps the pattern risk off/ strong yen will be limited, and maybe visible more on other crosses, like AUDJPY as expression of risk sentiment. I will remain short an EURUSD on medium basis, looking for sell on retracement, in the 1.23-1.24 area. High uncertainty is still alive and I would not add other risk positions.

Median grid
EURUSD GRID 1.2300 - 1.30, short bias (No grid change)
USDJPY GRID 88.00-92.00, neutral bias
AUDJPY GRID 74.00-82.00, short bias

Basically still a moderate risk-on bias

Prices
US down at 1100, (Q2)
GOLD up at 1220 (Q2)
Crude 75.3
EURUSD 1.23 (Q1)
USDJPY 91.2 (Q1)

3.  Plan
I will try to work out of the money positions for JPY longs;.

EURUSD
I will enter a long B&B on the next yob level (1.235); I will hedge on a couple of level down (-100 pips). I can open a new toe in long same level. I will take profit at 50-100 pips
Comment:< >

USDJPY
Already too many positions (+5)
Comment:< >

AUDJPY
Close the shorts on a dip (75)
Comment:< >

EURNOK
Hold short positions
Comment:< >

4.  Trades
4.1 open trades, their type & their value: (TODO)

2 Open 13-apr-10 USDJPY L 93.2400 Q3 1:1 toe-in 91.70 -178.0000
6 Open 05-mag-10 USDJPY L 94.5900 Q2 1:1 toe-in 91.70 -313.0000
10 Open 06-mag-10 USDJPY L 93.8600 Q3 1:1 Panic 91.70 -240.0000
16 Open 14-mag-10 USDJPY L 92.3000 Q1 1:1 B&B 91.70 -84.0000

18 Open 02-giu-10 USDJPY L 92.2100 Q2 1:1 B&B 91.4000 -81.0000
6 Open 04-mag-10 AUDJPY L 86.0500 Q4 1:1 toe-in 77.81 -758.0000
7 Open 06-mag-10 AUDJPY L 85.1300 Q4 1:1 toe-in 77.81 -666.0000
16 Open 20-mag-10 AUDJPY S 72.8800 Q1- 1:1 Hedge 77.810 -560.0000

4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 4:1)

Total positions per currency:
USDJPY +5
EURUSD 0
AUDJPY +2,-1
Position
USDJPY -178, -313,-240, -84, -84
EURUSD 0

AUDJPY -758, -666 (-560)

4.3  Effect of planned trades

Account summary:
ActivTrades live account
Starting date: 1/4/2010
Starting capital: 1366
Line in the sand level:  750

1.  Account balance (Settled trades) and growth as a percentage.  (1345=1.6%)
2.  Account equity (Including open positions) .  (1189= -13%)
3.  Account equity if planned trades go wrong: 1000
4.  Pip distance to line in the sand level.  4369, with gear (6) 728

Daily Briefing 100606

1.  Review.

I said “More downside is expected for the EURUSD in the long run if the 1.2150 level does not or the 1.2090 is reached. … There some potential for risk to grow in the next week, suggesting a buy of JPY crosses on dips and short closing.   I decided if to stay with the higher long and close the shorts with a small loss too. Fundamental data to be monitored to assess the risk sentiment are US ISM report on Tuesday and Thursday and the Employment report on Friday” . EURUSD broke the 1.2 level, now trading at 1.196. Risk rallied a little during the week, looking for better days ahead, but the weak US job report on Friday put the risk off mode again, with huge JPY short risk crosses losses.
Trades
I close another USDJPY and AUDJPY short hedge positions, with some loss. Still holding EURNOK shorts, despite the overshooting.

2.  Analysis.

"Fundamental analysis"
Global markets destabilized last week after the NFP and a Hungary default talk, with a big sell off. Fundamentals  NFP data were lower than expected,. Dollar and  JPY were rising anyway on bad figure (again sign as USD is acting as safe haven currency).  NFP were quite difficult to decipher but it was significant and will last for the next weeks on negative risk sentiment; Hungary default if more a political talk that a real issue, but put some doubt again about the sovereign debt solvency. A week CNY PMI and mixed data from US gave  no sign of clear recover or if the stock market is simply  drove by easy money.

"Technical analysis"
EURUSD hit historical lows, gained the 1.1.9 level and it looks like a strong break of the current Q1 levels range. It would be a short on rallies. Key support are 2006 1.18 and 2005 1.63 lows. EUR COT short are again decreasing from at the historical lows (-93k) maybe for some short covering during days before, USD long are still decreasing (+20k), showing a big divergence; JPY short are lowering (-6k).  USDJPY after hitting 88 level, retested the 98 level back to 93, back in the 89 area, now at 92 area. It is dangerous to a buy on these dips. US futures were sold off, hitting the 1065 low. AUD long decreased (+15k), unwinding the risk on positions. GOLD/Oil ratio is still high from a 13 in the last months to 17.2 and VIX is again at 35, pointing for a risk off sentiment. Gold is to be monitored, because is flat since a week.

"Market dynamics".
Risk events are the EU finance minister meeting on Tuesday and the CNY CPI and other data on Thursday and Friday. Risk off sentiment looks like to last for some time (weeks?) so I will not add more risk positions to my portfolio. I will be a seller on EURUSD dips (UBS three month forecast is 1.15). JPY is expected to weaken for fundamentals (UBS three month forecast is 95), but near weakness is expected for risk aversion

 

Median grid
EURUSD GRID 1.2300 - 1.30, short bias (Grid change?)
USDJPY GRID 88.00-92.00, neutral bias
AUDJPY GRID 74.00-82.00, short bias

Basically still a risk-off bias

 Prices
US  down at 1064, (Q2,)
GOLD up at 1219 (Q2)
 Crude 70.3
EURUSD 1.196 (Q1-)
USDJPY 91.7 (Q1)

3.  Plan
I will try to work out of the money positions for JPY longs;.

 

EURUSD
I will enter a long B&B on the next yob level (1.210); I will hedge on a couple of level down (-100 pips). I can open a new toe in long same level. I will take profit at 50-100 pips
Comment:< >

USDJPY
Close the shorts on a dip (90)
Comment:< >

 

AUDJPY
Close the shorts on a dip (75)
Comment:< >

 

EURNOK
Hold short positions; I will enter a short B&B on the next yob level in the grid (7.933), I will hedge on a couple of level down (-100 pips). I can open a new toe in long same level. I will take profit at 50-100 pips
Comment:< >

4.  Trades
4.1 open trades, their type & their value: (TODO)

2 Open  13-apr-10   USDJPY  L   93.2400 Q3  1:1 toe-in  91.70     -136.0000  
6 Open  05-mag-10   USDJPY  L   94.5900 Q2  1:1 toe-in  91.70     -271.0000
10 Open 06-mag-10   USDJPY  L   93.8600 Q3  1:1 Panic   91.70     -198.0000
16 Open 14-mag-10   USDJPY  L   92.3000 Q1  1:1 B&B 91.70    -42.0000
6 Open  04-mag-10   AUDJPY  L   86.0500 Q4  1:1 toe-in  77.81 -1089.0000
7 Open  06-mag-10   AUDJPY  L   85.1300 Q4  1:1 toe-in  77.81 -997.0000
16 Open 20-mag-10   AUDJPY  S   72.8800 Q1- 1:1 Hedge   77.810     -228.0000

4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 4:1)

Total positions per currency:
USDJPY  +4,-2
EURUSD 0
AUDJPY +2,-2
Position
USDJPY -203, -333,-262, -114, (1 ,-172)
EURUSD 0

AUDJPY -892, -800 (-462, -462)

4.3  Effect of planned trades

Account summary:
ActivTrades live account
Starting date: 1/4/2010
Starting capital: 1366
Line in the sand level:  750 

1.  Account balance (Settled trades) and growth as a percentage.  (1389=1.6%)
2.  Account equity (Including open positions) .  (1173= -15%)
3.  Account equity if planned trades go wrong: 1000
4.  Pip distance to line in the sand level.   4237, with gear (4) 1059

Daily Briefing 100531

1.  Review.

I said “More downside is expected for the EURUSD in the long run; the 1.2150 level hold and I would expect here a correction to 1.32... I would expect risk off remaining to this low for the next week, but not deteriorate. I see the risk asset rally at attractive levels, but too risky to add positions to risk asset exposure. Basically I have to decide if to stay with the long and close the shorts with a loss or stay with the short and close the long with a huge loss, hoping to have something back with the shorts” EURUSD did not corrected that much, juts 1.24 and is trading now at 1.22. Risk did not deteriorate and I waited to add new risky positions, but it was time to close some hedge short. Despite risk off not deterioration gold stayed flat, while oil rallied.
Trades
Close a USDJPY and AUDJPY short hedge position. Still holding EURNOK shorts, despite the overshooting. Traded a profitable EURUSD short.

2.  Analysis.

"Fundamental analysis"
Global markets stabilized last week, showing that the previous sell off was extreme. Some data *MSCI index and CRB index rebounded from the recent lows). Fundamentals data were lower than expected, especially regarding US GDP. Dollar, JPY and CAD were rising anyway on bad figure (contrary to the expected, sign as USD is acting as safe haven currency). Unemployment are always stable at 460k. Spain downgrading to AA+ after market close added pressure to EURUSD

"Technical analysis"
EURUSD gained the 1.24 level, but back to 1.22 and it looks like trading in the Q1-Q2 levels range. It would be a short on rallies. Key support is still the 1.2150 low. EUR COT short are again at the historical lows (-106k), USD long are the decreasing (+21k), showing a big divergence; JPY short are lowering (-10k). USDJPY after hitting 88 level, retested the 98 level back to 93, Is trading back in the 89 area. It is dangerous to a buy on these dips. US futures were sold off, hitting the 06 low. AUD long decreased (+19k), unwinding the risk on positions. GOLD/Oil ratio is still high from a 13 in the last months to 16 and VIX is back at 32, pointing for a risk off sentiment. Gold is to be monitored, because is flat since a week

"Market dynamics".
More downside is expected for the EURUSD in the long run if the 1.2150 level does not or the 1.2090 is reached. Key is the initial market reaction after S&P Spain downgrade. Three month outlook is still 1.18 level, suggesting short on rallies. A break of the 1.2680 resistance will suggest a reach of the 1.32 level. There some potential for risk to grow in the next week, suggesting a buy of JPY crosses on dips and short closing. I see the risk asset rally at attractive levels, maybe time to add diligent positions to risk asset exposure with quick profit taking. I decided if to stay with the higher long and close the shorts with a small loss too. Fundamental data to be monitored to assess the risk sentiment are US ISM report on Tuesday and Thursday and the Employment report on Friday.

Median grid
EURUSD GRID 1.2300 - 1.30, short bias
USDJPY GRID 88.00-92.00, neutral bias
AUDJPY GRID 78.00-86.00, neutral bias

Basically still a risk-off bias, but pausing risk

Prices
US down at 1084, (Q1-, same as last week)
GOLD up at 1214 (Q2)
Crude 74
EURUSD 1.22 (Q1)
USDJPY 91 (Q1)

3.  Plan
I will try to work out of the money positions for JPY longs;.

EURUSD
I will enter a long B&B on the next yob level (1.2350); I will hedge on a couple of level down (-100 pips). I can open a new toe in long same level. I will take profit at 50-100 pips
Comment:< >

USDJPY
Close the shorts on a dip (90) and buy a B&B in the grid
I will enter a long B&B on the next yob level (91) as pullback 1:1 from 90, I will hedge on a couple of level down (-100 pips). I can open a new toe in long same level. I will take profit at 50-100 pips
Comment:< Risk was positive and I closed a short in the money>

AUDJPY
Close the shorts on a dip (75) and buy a B&B in the grid
I will enter a long B&B on the next yob level (77) as pullback 1:1 from 75, I will hedge on a couple of level down (-100 pips). I can open a new toe in long same level. I will take profit at 50-100 pips
Comment:< Risk was positive and but I did not closed shorts, deep out of the money>

EURNOK
Hold short positions; I will enter a short B&B on the next yob level in the grid (7.933), I will hedge on a couple of level down (-100 pips). I can open a new toe in long same level. I will take profit at 50-100 pips
Comment:< >

4.  Trades
4.1 open trades, their type & their value:

2 Open 13-apr-10 USDJPY L 93.2400 Q3 1:1 toe-in 91.06 -218.0000 -203.974
6 Open 05-mag-10 USDJPY L 94.5900 Q2 1:1 toe-in 91.06 -353.0000 -333.868 Buy a dip
10 Open 06-mag-10 USDJPY L 93.8600 Q3 1:1 Panic 91.06 -280.0000 -262.5542 Buy a dip
14 Open 07-mag-10 USDJPY S 91.0700 Q1- 1:1 Hedge 91.06 1.0000 0.7000
16 Open 14-mag-10 USDJPY L 92.3000 Q1 1:1 B&B 91.06 -124.0000 -114.691
17 Open 14-mag-10 USDJPY S 89.1300 Q1- 1:1 Hedge 91.06 -193.0000 -172.1738
6 Open 04-mag-10 AUDJPY L 86.0500 Q4 1:1 toe-in 77.81 -892.0000 -767.1075 Normal long bias
7 Open 06-mag-10 AUDJPY L 85.1300 Q4 1:1 toe-in 77.81 -800.0000 -681.9699 Buying a dip
15 Open 20-mag-10 AUDJPY S 72.8700 Q1- 1:1 Hedge 77.81 -462.0000 -310.9956 Open 6
16 Open 20-mag-10 AUDJPY S 72.8800 Q1- 1:1 Hedge 77.810 -462.0000 -310.2856 Open 7

4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 4:1)

Total positions per currency:
USDJPY +4,-2
EURUSD 0
AUDJPY +2,-2
Position
USDJPY -203, -333,-262, -114, (1 ,-172)
EURUSD 0

AUDJPY -892, -800 (-462, -462)

4.3  Effect of planned trades

Account summary:
ActivTrades live account
Starting date: 1/4/2010
Starting capital: 1366
Line in the sand level:  750

1.  Account balance (Settled trades) and growth as a percentage.  (1337=-3%)
2.  Account equity (Including open positions) .  (1180= -14%)
3.  Account equity if planned trades go wrong
4.  Pip distance to line in the sand level.  4305, with gear (2) 2150

Daily Briefing 100524

1.  Review.

I said “More downside is expected for the EURUSD (1.22 level); I would expect here a correction to 1.32 (adding a long). In the long run EURUSD is expected to go back to 1.18 levels, reselling then at 1.32-4 levels. I would expect risk off remaining low for the next week, but not deteriorate. I will see the risk asset rally at attractive levels, adding positions to risk asset exposure.” It was instead a mess week and risk off deteriorate heavily. Risk assets were heavily sold off and USD and JPY gained as non safe heaven currencies. Gold was sold off too.
Trades
My plan was to close risk assets longs on rally but I decided to change bias end of the week, cashing the short I placed almost mid-grid. This change of plan was a complete disaster. Now I hedged my high grid level JPY short with very low level JPY long. EIUNOK lose 4 month gains in a couple of days.

2.  Analysis.

"Fundamental analysis"
Last week data were all in red. Sentiment was bad and numbers too. Next week data will be very important, especially US durable goods, consumer confidence both US and EZ. EZ economic is underperforming, interest rate differentials and repricing will weight on the EUR in mid-term view. I said “Oil would be a better risk sentiment indicator, and it is pointing low” and I should have listened. Commodities were sold off too and some concern about China growth is there. But it looks like that AUD, NOK and CAD looks sounds even with those sell off. Obliviously if it is a temporary correction or not is still a bet

"Technical analysis"
EURUSD broke 36 month low at 1.2150, and it looks like ahead to lower levels in the mid-term. It would be a short on rallies. EUR COT short are again at the historical lows (-107k), USD long are the same (+23k), JPY short are still there (-34k). USDJPY after hitting 88 level, back to 93, Is trading back in the 89 area. It is dangerous to a buy on these dips. US futures were sold off, hitting the 06 low. AUD long decreased (+38k). GOLD/Oil ratio is going higher from a 13 in the last months to 16.7 and VIX is jumped at 43, pointing for a risk off sentiment.

"Market dynamics".
More downside is expected for the EURUSD in the long run; the 1.2150 level hold and I would expect here a correction to 1.32 (adding a long in a south dip). In the long run EURUSD is expected to go back to 1.18 levels, reselling then at 1.32-4 levels. I would expect risk off remaining to this low for the next week, but not deteriorate. I see the risk asset rally at attractive levels, but too risky to add positions to risk asset exposure.
Basically I have to decide if to stay with the long and close the shorts with a loss or stay with the short and close the long with a huge loss, hoping to have something back with the shorts.

Median grid
EURUSD GRID 1.2300 - 1.30, short bias
USDJPY GRID 88.00-92.00, neutral bias
AUDJPY GRID 78.00-86.00, neutral bias

Basically still a risk-off bias, but pausing risk

Prices
US down at 1084, (Q1-)
GOLD up at 1176 (Q1)
Crude 70
EURUSD 1.2543 (Q3)
USDJPY 89.43 (Q1-)

3.  Plan
I already added new trades; I will try to work out of the money positions for JPY longs;.

EURUSD
Stay with this short
Comment:< >

USDJPY
Hold and see
Comment:< >

AUDJPY
Hold and see
Comment:< >

EURNOK
Hold and see
Comment:< I did anything of the “Take profit, at 7.74 level and add more shorts at pullback “. Shit…>

4.  Trades
4.1 open trades, their type & their value:

2 Open 13-apr-10 USDJPY L 93.2400 Q3 1:1 toe-in 89.3900 -385.0000 -358.974
6 Open 05-mag-10 USDJPY L 94.5900 Q2 1:1 toe-in 89.3900 -520.0000 -491.868 Buy a dip
10 Open 06-mag-10 USDJPY L 93.8600 Q3 1:1 Panic 89.3900 -447.0000 -419.5542 Buy a dip
13 Open 07-mag-10 USDJPY S 91.3600 Q1- 1:1 Hedge 89.3900 197.0000 179.9792
14 Open 07-mag-10 USDJPY S 91.0700 Q1- 1:1 Hedge 89.3900 168.0000 152.9976
16 Open 14-mag-10 USDJPY L 92.3000 Q1 1:1 B&B 92.4700 17.0000 15.691
17 Open 14-mag-10 USDJPY S 89.1300 Q1- 1:1 Hedge 89.3900 -26.0000 -23.1738
6 Open 04-mag-10 AUDJPY L 86.0500 Q4 1:1 toe-in 81.9000 -415.0000 -357.1075 Normal long bias
7 Open 06-mag-10 AUDJPY L 85.1300 Q4 1:1 toe-in 81.9000 -323.0000 -274.9699 Buying a dip
15 Open 20-mag-10 AUDJPY S 72.8700 Q1- 1:1 Hedge 74.7500 -188.0000 -136.9956 Open 6
16 Open 20-mag-10 AUDJPY S 72.8800 Q1- 1:1 Hedge 74.7500 -187.0000 -136.2856 Open 7

4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 4:1)

Total positions per currency:
USDJPY +4,-3
EURUSD 0
AUDJPY +2,-2
Position
USDJPY -385, -520,-447, 17, (197,168,-26)
EURUSD 0

AUDJPY -415, -323, 13 (-188, -187)

4.3  Effect of planned trades

Account summary:
ActivTrades live account
Starting date: 1/4/2010
Starting capital: 1366
Line in the sand level:  750

1.  Account balance (Settled trades) and growth as a percentage.  (1469= 7%)
2.  Account equity (Including open positions) .  (1270= -7%)
3.  Account equity if planned trades go wrong
4.  Pip distance to line in the sand level.  5270, with gear (1) 5270