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

Daily Briefing 101022

1.  Review.

I said “USD, that was supposed to go down, strengthen, suggesting a correction in extreme short positions. But this could end up in a significant shift in the market direction, as we see relative growth prospects in monetary policy as he ground for further USD strength. Growth slowdown is weighting on EUR and JPY.” USD recovered again versus EUR and JPY, with the Irish crisis still opened, but risk turned off at the end of the week, where EZ crisis looks under control. “Further USD strengthen suggest commodities and gold weakness in the week ahead. WTI reached pivotal 84-85$ prices; weakness below would suggest a decline to 80 level on next week”. Crude reached 80$ level and gold declined to 1330; rebound at the end of week “ I would expect both gold and crude to decline sustaining a strong USD. I think there is some guidance to exploit EZ sovereign debt during G20 (maximum exposure) to hide the QE2 effects, showing a strong US that is not. Then I will be long EUR if the 1.36 level holds and long USDJPY if dipping.”. 1.36 is holding, after a small dip at 1.3490, JPY did not dipped
Trades
Shorted EURUSD at 1.530, expecting a range to 1.34 but I closed with loss at 1.3670. Closed a USDJPY long from 83.25 at 83.5

2.  Analysis.

"Fundamental analysis data"
US retails sales: 1.2%, better than expected
AUD RBA minutes: rate hike was well pondered, a modest hike was prudent.
ZEW: EZ 13.8 against 2.3; German 1.8, against an expected -5; first increase since seven months. German GDP growth is expected to be 3.7%, faster growth since 1991.
USD PPI: 0.4% against a 0.7% reflecting low car, truck and computer demand. Low PPI keep a lid on lower inflation; Companies are not increasing prices but reducing off-the-shelf package size.
US TIC: long term securities purchases were 80bl against 100bl expected, low from previous 120bl reading
US CPI: 0% against expected 0.1%, to a record low inflation.
US unemployment claims: +2k to 439, less than expected 442k
US housing data weak down 11%. That is not helping employment and giving credit to QE.
US Philly Fed Manufacturing Index strong at 22, 4 times the expected value.
German PPI m/m: 0.4% as expected, that accelerate inflation in respect of previous year.
CNY CPI: 4.4% against 3.6% expected, that suggest a new RRR rate hike of 50 bps, expected end of year

"Fundamental analysis"
EUR industrial production for Q3 is suggesting a slowdown in EUR growth and this is still expected to be more in Q4. USD data was again more upbeat. Bernanke justify QE2 with these unemployment numbers. CNY rate hike announcement caused a small risk off but it was good digested by the market; good US data, no bad EZ, end of Irish crisis and QE2 free money are still supportive for risk on.
US yields increased and this could be supportive for the USD.
Risk about EZ peripherals countries is rising again (spreads and CDS rising again) caused EUR to move down in the 1.35 area. the Irish story is QUITE over and a rescue package is coming. BoJ is not intervening at these YEN level .

"Technical analysis"
USD gained further of the pre-QE2 levels after QE2 release losses, but lost gains at the end of week especially against EUR. EURUSD tumbled at 1.35. Support at 1.36 look like to hold. 1.36 area is still a key support for EUR, because is the area where started dipping in the 1.2 levels. COT data are below, basically flat. USD close to 78.5, sill above the 78.4 support, before resistance; USDJPY traded stable comfortably in the 82 area after weeks jumped in the 83 area. Again at this level BoJ would intervene if the 80 level will be broken. Gold all time highs at 1.3060; US futures stable again in to the 1180. GOLD/Oil ratio stable, little rising; VIX stable to low levels. 2.8 is a critical resistance for US yields, to be watched for the USDJPY correlation.
COT JPY up at 24.1k (-12k)
COT USD up to 10.6k (+2.2k)
COT EUR at 10.1k (-13kk)
COT AUD down 26.9k (-13k)
TYN up to 2.87% (+0.1%)
JGB at 1.07% (+0.03%)
Bunds at 2.7%. (+0.2%)
German/Greece up to 8.86% (-0.01%)
VIX down to 18.4 (-0.4)
Gold/Oil up to 16.5 (+3.8)

"Market dynamics”
Again this week USD, that was supposed to go down, strengthen, suggesting a correction in extreme short positions. Further US strengthen is expected in the week ahead, especially versus EUR if market shift attention to other peripherals or Spain. Further USD strengthen suggest commodities and gold weakness in the week ahead. WTI reached pivotal 84-85$ prices; weakness below would suggest a decline to 80 level on next week. I would expect both gold and crude decline to sustaining a strong USD. Anyway Dirk opinion is not to love too much USD beyond this Irish episode. I would agree more with this view if support holds and risk does not turn on. Then I will be long EUR is the 1.36 level holds and long USDJPY if dipping.

Median grid
EURUSD GRID 1.320 - 1.40, grid change up bias
USDJPY GRID 80.00-84.00, up bias
AUDJPY GRID 73.00-81.00, up bias

Prices
US up at 1197, (+3, Q4)
GOLD to at 1353, (-13, Q4)
Crude 81.8 (-3$)
EURUSD 1.375 (-0. 0, Q2)
USDJPY 83.56 (+1.0, Q4)
AUDJPY 82.38 (+-1.1 Q4)

3.  Plan
I will buy EURUSD +1 at these levels. 1.32/3 buffer. Still long USDJPY expecting BoJ intervention, but add stops. Buy a dip.

EURUSD
I will enter a long if support 1.355 holds and enter a long B&B on the yob level (1.3558) and another lot at 1.3707. I will hedge on a couple of level down (-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 (82.67) and another lot at 2 you levels. 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 83.5-72.0000 -8.000
4.2 Leverage

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

Total positions per currency:
USDJPY +1
EURUSD 0
AUDJPY 0
Position
USDJPY -8
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.  (10038=0.3%)
2.  Account equity (Including open positions) .  (10030= +0.3%)
3.  Account equity if planned trades go wrong: 1011
4.  Pip distance to line in the sand level.  6270, with gear (0.1) 12000

Daily Briefing 101015

1.  Review.

I said “FED announcement, dollar pumps and good far east data are basically set a risk on environment. This is also good for US stocks. But with late of week USD recovery and good data releases (ISM orders, NFP) I will go into next week with a USD cautiously optimistic view.” USD strengthened and risk was off due the Irish debt crisis and some CNY rite hike fears. “Recent QE2 may lead to further rise in commodities prices and then lead to higher inflation, especially in AUD. Further rate hikes are expected and the some AUD upside.” Gold surged but dropped sharply on the end of week. “Anyway there is a risk that G-20 meeting will give US a free pass to weaken further USD. I will monitor US official statements. EUR peripheral concerns are likely to come back in this year end. ECB confirmed exit strategy and FED dollar pumps in the market are strengthening the EURUSD, but I see difficult to maintain gains above 1.45. Anyway after QE2 even with good US data, I don’t expect that USD will be strong at the height of the PIIGS story (EURUSD 1.200).” EUR dropped to 1.36, a critical level before the EUR-goes-to-zero March story. “I think that BoJ will wait G-20 to apply a coordinate intervention.” It was. “The basic medium term view is a risk on through the end of the year, that can be stopped maybe for:
1. A unknown developing crisis (any of sort) – not yet
2. China will dip prices to reenter commodities at lower levels – rate hikes supposed, but anything of fear
3. The PIIGS story back if EURUSD will rise at uncomfortable levels of 1.5 – EUR dipped, probably all the story is priced in at 1.36 level”.
Trades
Closed the short EURUSD with profit. I was not able to pull the trigger for a USDJPY long at 80.7

2.  Analysis.

"Fundamental analysis data"
A quite light week:
Thursday CYN CPI: 4.4%, more than expected; this is suggesting there is no stress in China growth and that can cause a new rate hike.
Friday German GDP: 0.7%, slightly below consensus, but reading suggest Germany economy is booming
Friday US UoM consumer sentiment: 69.6, positive outlook thanks to improved job numbers.
Good employment data from AUD; bad industrial production numbers from JPY.
"Fundamental analysis"
Weak EUR industrial production for Q3 is suggesting a slowdown in EUR growth and this is expected to be more in Q4. USD data was more upbeat.

Good CNY data and QE2 free money are still supportive for risk on.
US yields increased and this could be supportive for the USD.
Risk about EZ peripherals countries is rising again (spreads and CDS rising again) caused EUR to move down in the 1.36 area. Probably the Irish story is all over and already full priced in. BoJ is not intervening

"Technical analysis"
USD gained further of the pre-QE2 levels after QE2 release losses. EURUSD tumbled at 1.37. Support at 1.3950 did not hold. 1.36 area is a key support for EUR, because is the area where started dipping in the 1.2 levels. COT data are below, basically flat. USD traded up to 78.2, close to the 78.4 resistance; USDJPY traded stable comfortably in the 82 area after weeks. Again at this level BoJ would intervene if the 80 level will be broken. Gold all time highs at 1.3060; US futures stable again in to the 1180. GOLD/Oil ratio stable, little rising; VIX stable to low levels. 2.8 is a critical resistance for US yields, to be watched for the USDJPY correlation.
COT JPY up at 44.1k (+0k)
COT USD up to 8.4k (+0k)
COT EUR at 35.1k (+0k)
COT AUD down 49.7k (+0k)
TYN up to 2.78% (+0.2%)
JGB at 1.03% (+0.1%)
Bunds at 2.5%. (+0.1%)

German/Greece up to 8.87% (-0.31%)
VIX down to 18.64 (+0.2)
Gold/Oil up to 16.1 (-1.4)

"Market dynamics”
USD supposed to go down strengthen, suggesting a correction in extreme short positions. But this could end up in a significant shift in the market direction, as we see relative growth prospects in monetary policy as he ground for further USD strength. Growth slowdown is weighting on EUR and JPY. Further USD strengthen suggest commodities and gold weakness in the week ahead. WTI reached pivotal 84-85$ prices; weakness below would suggest a decline to 80 level on next week. I would expect both gold and crude to decline sustaining a strong USD. I think there is some guidance to exploit EZ sovereign debt during G20 (maximum exposure) to hide the QE2 effects, showing a strong US that is not. Then I will be long EUR is the 1.36 level holds and long USDJPY if dipping.

Median grid
EURUSD GRID 1.340 - 1.42, up bias
USDJPY GRID 80.00-84.00, up bias
AUDJPY GRID 73.00-81.00, long bias

Prices
US up at 1194, (-30, Q4)
GOLD to at 1368, (-30, Q4+), all time high at 1422
Crude 84.8 (-3$)
EURUSD 1.369 (-0. 34, Q1)
USDJPY 82.56 (+1.3, Q2)
AUDJPY 81.25 (+-1, Q4)

3.  Plan
I will buy EURUSD +1 at these levels. 1.36/4 buffer. Still long USDJPY expecting BoJ intervention, but add stops. Buy a dip.

EURUSD
I will enter a long if support 1.355 holds and enter a long B&B on the yob level (1.3605) and another lot at 1.3755. I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips.
Comment:< >

USDJPY
I will add a dip: I will enter a long if support 81.5 holds and enter a long B&B on the yob level (1.3605) and another lot at 1.3755. 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 82.5 -176.0000 -12.9000
2 Open 07-ott-10 USDJPY L 82.3600 83.2600 Q1 0.2 B&B 82.5 +16.0000 +1.1000
4.2 Leverage

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

Total positions per currency:
USDJPY +2
EURUSD 0
AUDJPY 0
Position
USDJPY -12.0, +1
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.  (10022=0.2%)
2.  Account equity (Including open positions) .  (1011= +0.1%)
3.  Account equity if planned trades go wrong: 1011
4.  Pip distance to line in the sand level.  6270, with gear (0.2) 12000

Daily Briefing 101025

1.  Review.

I said “QE2 (bond buy program to push interest rates low) effects: we will have more USD unwinding and USD strength if we will have a QE2 large or medium, stepped in. This because QE2 will move FED away from any interest rate hiking. US rates low and for longer will stay and put pressure on USD”. After a USD sell off, USD recovered pre-QE2 levels after good NFP data “ If QE2 is that small than big initial numbers, after a short rally and closer to the grid low is the announcement, we will see EUR back to the top side of the grid to the 1.41-2 levels” .We didn’t get it. “PIMCO comments that this could be the end of the bond bull market; QE2 is like to pay your debt not getting the money from new creditors (i.e. banks) but writing a new check from your own (worst than a Ponzi’s scheme…). Then hedge funds and Wall Street are seeking alpha returns in EM and commodities, selling USD for that, until they will be hurt so much.” TYN did not move that much, but we have to monitor the next week. “BoJ is still expected to intervene to use measures to get the market out from these levels. The market is positioned for the BoJ to do something but the BoJ would wait the FCOM decisions.” BoJ waited but didn’t acted.
Trades
Short EURUSD //TODO.

2.  Analysis.

"Fundamental analysis data"
Monday CNY manufacturing PMI accelerated in October, up for the third consecutive month in back of new stronger orders and productions. US ISM on Wednesday and Friday NFP payroll surprised at the upside.
Good CNY data where supportive for the surprising RBA interest rate hike. RBA concern of China sharp slowdown are receded.
"Fundamental analysis"
Some fundamental comments by Jack Crooks, to underlay a very broad perspective:
US$↓ = ∫(GC)≈ + QE2↑=+ EM ∞↑

GC = Global Cooperation, QE = Quantitative Easing, EM = Emerging Markets

It says that dollars goes lower if global cooperation does not go any better, QE2 is greater than expected and emerging markets continues to grow without bubble burst risk.

US$↑ = ∫(GC)↑or↓ » QE2 ≤+ EM∞ ↓global cooperation improves (between US and China), low QE2; If cooperation goes bad or emerging markets starts to burst the dollar will go high on risk off sentiment.

Bottom line: If the US continues to fuel risky asset prices the dollar will stay low. But this could be also an extreme sentiment of dollar bearishness that can finish as soon as someone is hurt on risky assets.
Good CNY data, RBA interest rate hike, QE2 free money are supportive for risk on.
Risk about EZ peripherals countries is rising again (spreads and CDS rising again) is capping potential EUR move over the 1.42 area.
BoJ is not intervening

"Technical analysis"
USD recovered at same pre-QE2 levels after QE2 release losses. EURUSD spiked at the 1.4280 level after QE2, but retraced to 1.4030 on good NFP data; I think current trading range is broken. Support at 1.3950 and resistance at 1.42. COT data are below. USD still trading 76-78 range, after a plunge at 75.5; USDJPY traded in a strict 81 area, making a fresh low at 80.35 and some stop hunting up and down. Again at this level BoJ would intervene if the 80 level will be broken. Gold all time highs at 1.3060; US futures stable again in to the 1180. GOLD/Oil ratio stable, little rising; VIX stable to low levels.
COT JPY up at 44.7k (+2.2k)
COT USD up to 8.4k (+3k)
COT EUR down to 35.1k (-3k)
COT AUD down 49.5k (- 6k)
TYN up to 2.51% (+0.5%)
JGB at 0.93% (-0.1%)
Bunds at 2.41%. (-0.1%)

German/Greece up to 9.1% (+1%)
VIX down to 18.2 (-3)
Gold/Oil down to 15.4 (-1.4)

"Market dynamics”
FED announcement, dollar pumps and good far east data are basically set a risk on environment. This is also good for US stocks. But with late of week USD recovery and good data releases (ISM orders, NFP) I will go into next week with a USD cautiously optimistic view. Recent QE2 may lead to further rise in commodities prices and then lead to higher inflation, especially in AUD. Further rate hikes are expected and the some AUD upside.
Anyway there is a risk that G-20 meeting will give US a free pass to weaken further USD. I will monitor US official statements. EUR peripheral concerns are likely to come back in this year end. ECB confirmed exit strategy and FED dollar pumps in the market are strengthening the EURUSD, but I see difficult to maintain gains above 1.45. Anyway after QE2 even with good US data, I don’t expect that USD will be strong at the height of the PIIGS story (EURUSD 1.200). I think that BoJ will wait G-20 to apply a coordinate intervention.
Th basic medium term view is a risk on through the end of the year, that can be stopped maybe for:
1. A unknown developing crisis (any of sort)
2. China will dip prices to reenter commodities at lower levels
3. The PIIGS story back if EURUSD will rise at uncomfortable levels of 1.5

Median grid
EURUSD GRID 1.340 - 1.42, up bias
USDJPY GRID 80.00-84.00, neutral bias
AUDJPY GRID 73.00-81.00, long bias

Prices
US up at 1222, (+40, Q4)
GOLD up to at 139 (+45$, Q4),
Crude 87.8 (+7$)
EURUSD 1.4031 (-0. 10, Q4)
USDJPY 81.26 (+0.9, Q2)
AUDJPY 82.5 (+2, Q4+)

3.  Plan
I will reverse the EURUSD -1 in +1 at these levels. I see risk on mode to leave roomfor the EUSUSD to go to 1.45. Still long USDJPY expecting BoJ intervention, but add stops.

EURUSD
I will exit the short if support 1.3950 holds and enter a long B&B on the yob level (1.3982) I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips. I will hedge on a couple of level down (-100 pips), before FCOM if reached.
Comment:< >

USDJPY
No more positions to add
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 81.3 -297.0000 -21.9000
2 Open 07-ott-10 USDJPY L 82.3600 83.2600 Q1 0.2 B&B 81.3 -107.0000-7.9000
5 Open 31-ott-10 EURUS S 1.3968 1.3818 Q4 0.2 Contra 1.4031 -63.0000 -6.3000 -4.49
4.2 Leverage

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

Total positions per currency:
USDJPY +2
EURUSD 0
AUDJPY 0
Position
USDJPY -27.0, -13
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.  (9979=-0.15%)
2.  Account equity (Including open positions) .  (9938= -0.6%)
3.  Account equity if planned trades go wrong: 9939
4.  Pip distance to line in the sand level.  6200, with gear (0.2) 12000

Daily Briefing 101025

1.  Review.

I said “It should be a trading range for EURUSD between 1.40 and 1.38, waiting the FCOM announcement” It was that. “Probably investor are already placed for November 3 Fed meeting and now there will be a wait-and-see mode” It was basically a trading range week. Even if risk is on, I will expect potential further up move for EURUSD not exceeding the 1.41/1.42 levels, but probably a trading range around the 1.38 level as a consolidation”. Range was still centered on 1.39. “QE2 will be supportive for risk on because it will give money to big guys to invest in risky markets; so I am long of risk currency against USD (not JPY).” Riks assets were instead sold off. “I will look to spread Greek German bonds and US, JGB in general”. Greece spread recovered to 8.04 “Unilateral BoJ intervention is expected again, especially if prices drops below 80 handle. I will put ISDJPY stops t protect against USDJPY weakness.” USDJPY traded around 81 handle and no with no BoJ intervention.
Trades
No trades. I was not able from the expected trading range environment.

2.  Analysis.

"Fundamental analysis"
Some comments about interest rates: in the past interest rates levels were used to gauge economy recover or recession; now with zero interest level rates this pricing is gone and everyone is guessing on almost anything. This is causing a wild market volatility. G20 meeting was not causing surprises: everyone recognized the central banks should refrain from competitive devaluation; zero interest rates are causing problems to EM; US rhetoric says that US is supportive versus a strong dollar.
Risk about EZ peripherals countries is rising again (spreads and CDS rising again) is capping potential EUR move over the 1.42 area.
BoJ is not intervening but the 80-85 are is the line in the sand. BoJ knows how to manage yen at sub 90 level, but not in the sub 80 levels. Buying of Japan assets over the JPY 5 tritons could trigger JPY weakness.
QE2 looks like to be already factored in price so new expectation of 500 billion in six months is causing some USD unwinding. This QE2 size is expected to have the effect of a half-three quarter point interest rate reduction. Advance in GDP is still low in the third quarter at 2.0%

"Technical analysis"
EURUSD traded again at the 1.39 levels, with a short sell off at 1.37; lack of risk off data and wait for FED meeting probably will bring to a trading range again in the beginning of the next week; because is expected a trading range there will be some stop hunting at the extremes. Support at 1.38 and resistance at 1.42. COT data are below. USD still trading 77-78 range; USDJPY traded in a strict 81 area, making a fresh low at 80.35 and some stop hunting up and down. Again at this level BoJ would intervene if the 80 level will be broken. Gold again at 1.3060; US futures stable again in to the 1180. GOLD/Oil ratio stable, little rising; VIX stable to low levels.
COT JPY down at 41.7k (-2.2k)
COT USD up to 5.4k (+2.4k)
COT EUR up to 38.1k (-8k)
COT AUD down 55.5k (- 4k)
TYN up to 2.61% (+0.5%)
JGB up to 0.94% (+0.4%)
Bunds up to 2.51%. (+0.4%)

German/Greece up to 8.1% (+1.3%)
VIX up to 21.2 (+2.5)
Gold/Oil up to 16.63 (+0.4)

"Market dynamics”
QE2 (bond buy program to push interest rates low) effects: we will have more USD unwinding and USD strength if we will have a QE2 large or medium, stepped in. This because QE2 will move FED away from any interest rate hiking. US rates low and for longer will stay and put pressure on USD. If QE2 is that small than big initial numbers, after a short rally and closer to the grid low is the announcement, we will see EUR back to the top side of the grid to the 1.41-2 levels. PIMCO comments that this could be the end of the bond bull market; QE2 is like to pay your debt not getting the money from new creditors (i.e. banks) but writing a new check from your own (worst than a Ponzi’s scheme…). Then hedge funds and Wall Street are seeking alpha returns in EM and commodities, selling USD for that.
BoJ is still expected to intervene to use measures to get the market out from these levels. The market is positioned for the BoJ to do something but the BoJ would wait the FCOM decisions.

Median grid
EURUSD GRID 1.340 - 1.42, up bias
USDJPY GRID 84.00-88.00, neutral bias
AUDJPY GRID 73.00-81.00, long bias

Prices
US up at 1187 , (+13, Q3)
GOLD down at 1358 (+30$, Q4),
Crude 81.8 (0$)
EURUSD 1.3945 (-0. 010, Q3)
USDJPY 80.33(-1.0, Q2)

3.  Plan
I will try to profit from this expected trading range, entering long EURUSD on dips and selling highs till FCOM announcement, positioned with a long EUR at the low grid level. Still long USDJPY expecting BoJ intervention, but add stops.

EURUSD
I will enter a quick short B&B on the yob level (1.3982) I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips. I will enter a long on the yob level (1.3757) I will hedge on a couple of level down (-100 pips), before FCOM if reached.
Comment:< >

USDJPY
No more positions to add
Comment:< Still underwater…>

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 80.5 -370.0000 -27.9000
Open 07-ott-10 USDJPY L 82.3600 83.2600 Q1 0.2 B&B 80.5 -186.0000-13.9000
4.2 Leverage

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

Total positions per currency:
USDJPY +2
EURUSD 0
AUDJPY 0
Position
USDJPY -27.0, -13
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.  (9979=-0.15%)
2.  Account equity (Including open positions) .  (9938= -0.6%)
3.  Account equity if planned trades go wrong: 9939
4.  Pip distance to line in the sand level.  6200, with gear (0.2) 12000

Daily Briefing 101025

1.  Review.

I said “Prices did not move against USD after the Friday QE2 confirmation, suggesting again the QE2 expectation is already priced and maybe it will stop the USD weakness temporarily. A sharp drop in CRB and risk index could confirm this”. USD dropped in for a couple of days, but recovered then to the beginning of the week levels. CRB dropped a little “Probably investor are already placed for November 3 Fed meeting and now there will be a wait-and-see mode” It was basically a trading range week. Even if risk is on, I will expect potential further up move for EURUSD not exceeding the 1.41/1.42 levels, but probably a trading range around the 1.38 level as a consolidation, as grid mean (but end of year outlook is 1.45/1.5)”. Range was more center on 1.39 level than 1.38. “QE2 will be supportive for risk on because it will give money to big guys to invest in risky markets; so I am long of risk currency against USD (not JPY). Maybe it will be less stronger than QE1 because the expectations are like this” Investors are still waiting Nov 3 FED. I will look to spread Greek German bonds and US, JGB in general”. TYN recovered from the historical lows to 2.55. “Unilateral BoJ intervention is expected again, especially if prices drops below 80 handle. I will put ISDJPY stops t protect against USDJPY weakness.” USDJPY traded around 81 handle and no with no BoJ intervention.
Trades
No trades

2.  Analysis.

"Fundamental analysis"
Data from US were better than expected; this caused a some USD strength with some profit taking due to a high exposure to USD shorts; probably FED will have a QE2 incremental approach and thus QE2 is already priced now. We have to wait November 3 FED meeting to be sure that there will not be more USD lows. In case of the expected QE2 this could be a catalyst for USD rebound. Probably a cold QE2 will cause a nice dip to buy EUR. EUR data ZEW was better than expected, to confirm German recovery even at this EUR levels. China increase of interest rate is a good move to cool down growth to avoid overheating and avoid bubble burst. This would lead to a conviction that recovery could be in place even without US spending.

"Technical analysis"
EURUSD traded at the 1.39 levels, with a short sell off at 1.37; lack of risk off data and wit for FED meeting probably will bring to a trading range in the next week; because is expected a trading range there will be some stop hunting at the extremes. COT data are below. USD still trading 77-78 range; USDJPY traded in a strict 81 area, making a fresh low at 80.85 and some stop hunting up and down. Again at this level BoJ would intervene if the 80 level will be broken. Gold sell of till 1.3000; US futures raised again in to the 1180. GOLD/Oil ratio stable; VIX stable to low levels.
COT JPY stable at 43.7k (-2.2k)
COT USD up to 3.4k (+4k)
COT EUR up to 45.1k (+3.5k)
COT AUD down 59.5k (-8k)
TYN stable at 2.55% (+0%)
JGB stable at 0.89% (0.01%)
Bunds up to 2.47%. (+0.1%)

German/Greece up to 6.8% (-0.3%)
VIX down to 18.7 (-0.5)
Gold/Oil stable to 16.2 (-0.6)

"Market dynamics”

Median grid
EURUSD GRID 1.340 - 1.42, up bias
USDJPY GRID 84.00-88.00, neutral bias
AUDJPY GRID 73.00-81.00, long bias

Prices
US up at 1174 , (+30, Q2)
GOLD down at 1328 (-40$, Q4),
Crude 81.8 (0$)
EURUSD 1.3955 (+0. 020, Q3)
USDJPY 81.43(-0.10, Q2)

3.  Plan
I will try to profit from this expected trading range, entering long EURUSD on dips and selling highs. Still long USDJPY expecting BoJ intervention, but add stops

EURUSD
I will enter a long B&B on the yob level (1.3757) I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips. I will enter a short B&B on the yob level (1.4057) I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips
Comment:< >

USDJPY
No more positions to add
Comment:< Still underwater…>

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 81.37 -289.0000 -28.9000 -20.7
Open 07-ott-10 USDJPY L 82.3600 83.2600 Q1 0.2 B&B 81.37 -99.0000-9.9000 -7.24
4.2 Leverage

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

Total positions per currency:
USDJPY +2
EURUSD 0
AUDJPY 0
Position
USDJPY -29.0, -8
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) .  (9978= -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

Daily Briefing 101018

1.  Review.
I said “Prices did not move against USD after the NFP, maybe the QE2 expectation is already priced and maybe it will stop the USD weakness temporarily. I will not expect potential further up move for EURUSD to the 1.4 but a trading range around the 1.38 level as a consolidation” Price instead went to 1.415, but returned to beginning of week level, maybe suggesting that QE2 is priced in, after the Friday announcement that QE2 is coming. “I will be data watching to see Fed reaction for confirmation QE and for risk on support. QE2 will be supportive for risk on because it will give money to big guys to invest in risky markets. Maybe it will be less stronger than QE1 because the expectations are like this. I will look to spread Greek German bonds” Spread decreased and market seems do not care about European sovereign debt  for the moment. “and US, JGB in general.” That  remains at historical lows, probably because lot of money is parking there waiting for QE2 “Unilateral BoJ intervention is expected again, especially if prices drops below 82 handle.” Price reached 80.93 but no intervention
Trades
No trades
2.  Analysis.
"Fundamental analysis"
Lack of immanent bad news and Greece bond spread lowering reinforced a risk on bias. Disclosure of QE2 (even if not the entity) caused some profit taking but it is good for risk (basically free money to put in risky trades) . Stocks are up, mainly for the same reason because employment data still suggest that economy is not recovering.  Lack of JPY carry trades caused JPY to strengthen again; it needs interest differential  to change after some good US job reports. Total lack of bad news from risk generator events (PIIGS and China bubble, confirmed by a cooled trade balance data) are driving a risk on, essentially good for currencies versus USD.
"Technical analysis"
EURUSD broke  the 1.40 levels; the move could still have a correction, because the move was quick and strong, mainly because of lack of risk off data. COT data are below. USD still trading 77-78; USDJPY traded in the 82-81 area, making a fresh low at 80.93. Probably *again( at this level BoJ would intervene. US futures jumped again in to the 1170, 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 stable at 45.9k (+0k)
COT USD stable at -1.4k (-0.1k)
COT EUR down to 41.5k (-7k)
COT AUD down 67.5k (-2k)
TYN up to 2.55% (+0.15%)
JGB stable at 0.88% (0.01%)
Bunds up to 2.37%. (+0.12%)
German/Greece down to 6.5% (-1%)
VIX down to 19.03 (-1.25)
Gold/Oil up to 16.8 (+0.6)

"Market dynamics”
Prices did not move against USD after the Friday QE2 confirmation, suggesting again the QE2 expectation is already priced and maybe it will stop the USD weakness temporarily. A sharp drop in CRB and risk index could confirm this. Probably investor are already placed for November 3 Fed meeting and now there will be a wait-and-see mode. Even if risk is on, I will expect potential further up move for EURUSD not exceeding the 1.41/1.42 levels, but probably a trading range around the 1.38 level as a consolidation, as grid mean (but end of year outlook is 1.45/1.5). QE2 will be supportive for risk on because it will give money to big guys to invest in risky markets; so I am long of risk currency against USD (not JPY). Maybe it will be less stronger than QE1 because the expectations are like this. I will look to spread Greek German bonds and US, JGB in general. Unilateral BoJ intervention is expected again, especially if prices drops below 80 handle. I will put ISDJPY stops t protect against USDJPY weakness.

Median grid
EURUSD GRID 1.340 - 1.42, (grid change), up bias
USDJPY GRID 84.00-88.00, neutral bias
AUDJPY GRID 73.00-81.00, long bias

Prices
US  up at 1174 , (+30, Q2)
GOLD up at 1368 (+30$, Q4+), all time high
Crude 81.4 (-1$)
EURUSD 1.3975 (+0. 040, Q3)
USDJPY 81.46(-0.30, Q2)

3.  Plan
I will try again profit of this risk on sentiment, entering long EURUSD on dips; prudence at these lofty levels. Still long USDJPY expecting BoJ intervention, but add stops

EURUSD
I will enter a long B&B on the yob level (1.3730) as retracement after a 1.3900 clear break; I will hedge on a couple of level down (-100 pips). I will take profit at 50-100 pips
Comment:<I did a short instead >

USDJPY
Comment:< Still underwater…>

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 81.47    -279.0000 -27.9000 -19.932
Open    07-ott-10 USDJPY L 82.3600 83.2600 Q1 0.2 B&B 81.47    -89.0000-8.9000 -6.36
4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 3:1)
Total positions per currency:
USDJPY  +2
EURUSD 0
AUDJPY 0
Position
USDJPY -28.0, -7
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) .  (9978= -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