The Panthenon Investment Group

On September 28th I shared an article with all of you about my findings looking at three currencies and over laying it with Fibonacci.

It showed that all three majors werre tradinig at their low 23.6% range taking into consideration the recent highs and lows of the 4H chart.

This morning when I looked at the three currencies, their were hoving at 0.7188, 1.251 and 1.5306. This effecitvley works out to a move of 157 bps for the AUD, 115bps for the GBP and 50bps for the EUR.

Although, I am not a technical chart trader, this is an interesting observation.  It just took 9 trading days for the majors to bounce back against the USD after laying in the trough for about 11 trading days.

It would be interesting to back test further other observations to ascertain the timing intervals between bounce backs from the high or from the low.

It could reveal a patten that may allow us to capture trading opportunities in the future.  However, I feel the appropriate strategy would then be using a vanilla option to buy time for the market to come to us.

What do all of you think?

For some unexplained reason there wasn’t much noise revolving around the BOE decision, however, I felt that with the uncertain UK economy and Carney’s earlier comments about raising interest rates early next year that possibly we may see some reaction from the marketplace.

At about 6:55pm, when spot was hovering around 1.5350, I placed my straddle; Stop if Bid at 1.5370 and Stop if Offered at 1.5330. with correspondingly stop losses at 1.5350.  Yes, the straddle is tighter at 20 bps higher and lower to spot rate.  Then again, because there was little nosie in the media, I didn’t think volatility would be great on this event.

As it turned out, BOE held interest rates and votes were the same to hold rates and also for QE.  Minutes indicate a ‘no hurry’ stance to raising interest rates and BOE will probably only consider doing so in the second half of 2016.

The GBP went south, triggering my Offered trade at 1.5330.  I was still in my car when I did this trade, so within half an hour of the data release, when GBPUSD hit 1.5280 I decided to square the trade and go for dinner with my wife.  Locked in trading profits of 50bps.

BOE, Carney to speak tonight at 2am Friday, morning Singapore time.  Will there be any surprises from him?

It will also be the same time that FOMC minutes from the last rate decision will be released.  Will the minutes illuminate why Janet Yellen decided not to raise interest rates?