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Daily Archives: October 23rd, 2013

I looked at the AUDUSD, felt that it is too strong given, the weak economy, structural weakness, impending inflation and poor job numbers.

I decided to BUY a 1 month Put Option on the AUDUSD, strike at the money spot of 0.9640, expiring 22 November 2013, premium of 107bps and breakeven of 0.9533.

I am looking at a 1:1 payout at 0.9425 and a possible 2.24:1 payout at 0.9293.  Let’s not forget that it was barely three weeks ago that the AUD was at 0.9280.  I believe the likely outcome would be about 1.6:1.  We’ll see.

I was watching the screen and at about lunch time, I noticed the pound starting to slide.  I quickly looked at my charts and I noticed that the stochastics were turning down, the ichimoku; tenkan had just the kinjun from the top down, and the price trend broke through the cloud.

I confirmed it at both the 15 minute and 5 minute time frame……………looked really good, so I short the GBPUSD at 1.6230 with a SL at 1.6250.  The pound started a slow grind downwards and at about 330pm, an hour before the MPC and BOE minutes at 430pm, I decided to square the position and bought back the pound at 1.6155 for a 75bps pop!