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Monthly Archives: October 2015

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?

I was expecting that the non farm payroll numbers on Friday, October 2nd will be closely watched as a signal for whether Janet Yellen will be raising interest rates this year.  The noise in the media was playing up this event.

I on the other hand, had to make an urgent business trip to KL on Thursday through Saturday.

It was so funny, I was out for dinner in the Subang area where the internet connection is not always the most stable.  I was with a group of business people having dinner.  At about 8:25pm I excused myself from the group saying that I needed a few minutes to catch up with an old friend at the bar.  I went up to this lady at the bar and explained to her that I needed to access the fx markets on my Iphone and that I would be most grateful if she would pretend that we were long lost friends and keep me with her for about half an hour.  She hugged me and started acting up the role…………TOTALLY SURPRISED ME.

It’s terrible trying to do an fx trade on an Iphone, the screen is small and at the back of my head was the worrying fear that I may lose connection anytime.

I decided to do a straddle on the GBP and EUR: –

EURUSD  –  Stop if Offered; 1.1130, Spot; 1.1163, Stop if Bid; 1.1190

GBPUSD  –  Stop if Offered; 1.5120, Spot; 1.5150, Stop if Bid; 1.5180

As we all know, the non farm payrolls came out way below expectations of 201K at 142K, but what was more surprising that the markets reacted negatively was the adjustment to the previous month down to 136K from 173K.  I don’t know how this will affect the running average, but for the time being, it’s SELL USD.

By this time, I already knew this lovely lady’s name, Cassandra and she was watching the fx markets with me on my Iphone, totally fascinated and what was happening in front of her eyes.

As it turned out the EUR popped up aggressively, the GBP was more of a roller coaster ride.  Cassandra was getting so excited grabbing onto my hand, screaming, wanting to know when I am going to get out of the trade.  She was quite distracting!  My group  who was watching from the other end of the restaurant was wondering what was going on.

At about 8:50pm, I decided to square off the trades in fear that the whole thing may get out of hand and also the fear that I may lose internet connection.

Squared the EURUSD at 1.1291 and the GBPUSD at 1.5216 for a trading profit of 101bps and 36 bps respectively on $10Bn trade size each.

Cassandra kept on screaming and grabbing onto me while I was trying to get out of the trade, really, you need a very strong resolve to focus and concentrate when you have a beautiful woman distracting the hell out of you.

I thanked her for helping me out, ironically, she thanked me as she said she never experienced something like this ever before, she whispered in my ear that she had an orgasm.  I burst out laughing and she blushed.

I returned to my group and they were all drilling me on what the F_ _ _ happened at the bar.  I just told them that my old time friend was excited seeing me after a 10 year lapse.

My blog followers have been asking me whether I hooked up with Cassandra again later in the night?  Yes……………and that’s another story……….PG.