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Daily Archives: March 28th, 2013

The GBPUSD peaked at 1.5266 on 26 March, against our breakeven of 1.5110, a very good 156bps unrealized trading profit.

However, the spot rate has since trended back downwards to the current level of 1.5147, a miserable 37bps unrealized trading profit.

Our mistake was not closing the position by selling the option earlier.  Nonetheless, we still have time before the option expires.

I believe the GBP will benefit somewhat from the mess and chaos in the Eurozone.  Let’s see.

The current spot rate at 1.0434 is lower than the high reached on 26 March at 1.0495.  At the current spot rate, we have an unrealized trading profit of 69bps, not bad, however, we still have time before the option expires in two weeks time.

With all the uncertainly in the United States and Europe, I believe AUD will end up being the safe haven currency, therefore, it should benefit from further upside.

We executed a one month call option on the GBPUSD at the strike of 1.5000, breakeven at 1.5110, cost of premium was 110bps and spot rate was 1.4922.

We were correct on our technical analysis about the breakout.  It happened both from the technical viewpoint and also from the poor political sentiment in the Eurozone and Cyprus.

At the time of the earlier post, the spot rate was at 1.2840 and after the breakout, it reached a low of 1.2749 at 10pm Singapore time.  Since then, it has recovered and is presently sitting around the 1.2788 level.

The Hourly chart shows another potential breakout with the current spot trend on the upper band of the bollinger bands.  The critical German unemployment rate at 4:55pm Singapore time will the catalyst for the breakout.

Employment still bad in Germany and we suspect that the unemployment rate will come in worse than the forecasted -2.