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Daily Archives: October 22nd, 2013

Well, as I expected last Thursday was a massacre on the USD by the other majors.  The half baked solution carved out by the US was not surprising and yet at the same time so predictable.

It was time for the US to reopen the government offices, it simply could not continue this embarrassing situation.  So now the government is reopened but it’s fate is shifted to January 15th, 2014.

I knew the Republicans and the Democrats would not come to an agreement regarding the increase in the debt ceiling limit and rather than to continue to push a bad situation, what do they do?  Suspend it, or rather postpone it to February 7th, 2014, in the meantime, the US has a ‘carte blanche’ to keep on printing new monies to meeting all it’s obligations till next February!

What a way to go United States of America………………which is why the fx market decided to punish the US dollar and it did with a vengeance.

Lesson learnt; never bet on politics and politicians, better to wait till it’s over and then focus back on fundamentals and technicals.

 

I placed as SHORT USDJPY stop if bid at 98.00 when the spot rate was at 98.33.

When the weaker non farm payroll number came out the JPY strengthened to 97.87.  My order was filled at 98.00 and I squared the position at 97.90 for a trading profit of 0.10.

Who really knows what the non farm payroll number is going to be; could be stronger or weaker.

I did three spot trades; the first one was going LONG EURUSD, going SHORT GBPUSD, and then going SHORT USDJPY.  All three trades were placed on a stop if offered or bid.

In the case of the GBPUSD, I was hedging against a possible stronger non farm payroll number, so I SHORT GBPUSD stop if bid at 1.6100 when the spot was at 1.6131.

As we all know, when the weaker non farm payroll number came out at 148K versus expectations of 180K, the USD got clobbered and the GBPUSD when up to 1.6200.

I was betting on a poor showing of the non farm payroll and so placed a LONG EURUSD stop if offered at 1.3690 when spot was trading at 1.3675.

When the weaker non farm payroll number came out,  the spot shot passed my order and my trade was executed.  I then squared my spot position at 1.3734 for a 44 bps trading profit.