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Monthly Archives: November 2015

If you recall, I executed an AUDUSD call option on July 8th expiring Nov 27th with the following details: –

Spot: 0.7390

Strike: ATM

Premium: 200bps

Breakeven: 0.7590

The high on November 27th was 0.7234.

Oh well, you can’t win them all.  I still have two other AUDUSD call option expiring in July and August 2016.

Was there at the market to potentially capture this opportunity if the data came out much different from forecast.

Place a OTM stop if bid trade with the following details: –

GBPUSD   –   1.5056   –   1.5075 with spot at 1.5056 and SL at 1.5065

Data came out as per expectations at 0.5%.

I withdrew the trade……………….so so boring!

Unemployment Claims is clearly a data that is on the radar screen of the Fed.  So, it impossible not to be read to pounce on an opportunity if it happens.

So at about 9:27pm, I decided to put in a straddle trade with the following details: –

EURUSD   –   1.0651   –   1.0677   –   1.0697

GBPUSD   –   1.5245   –   1.5265   –   1.5285

Unemployment claims came out FLAT at 271K versus expectations of 272K.

I withdrew the trade 1o minutes after the announcement as rates were not going anywhere.

Since the October FOMC rate decision did not come with a press conference, the entire financial markets was looking towards the minutes to garner an idea of what happened in the closed door meeting among the Fed governors and Yellen.

There was a fair amount of noise in the media though, it seemed somewhat muted.

In any case, I stayed up and at 2:55am, I placed the following trades: –

GBPUSD   –   1.5197   –   1.5217   –   1.5237

EURUSD   –   1.0618   –   1.0638   –   1.0658

USDJPY   –   123.27   –   123.47   –   123.67

As it turned out, the minutes lacked luster, rates did not move anywhere.

10 minutes after 3am, I decided to withdraw the three straddle trades.

What a disappointment!!!

 

The GBPUSD is trading at the low range of the 1H price chart.

gbpusd_hourly_fibo

If the estimate GDP comes in better than forecast, then, I am confident that there will be a significant breakout higher.  If poorer, then, it may test 1.5030, the last low during the first week of November.

Let’s see at 5:30pm Asia time?!

 

6pm was ZEW sentiment for the German area and the Euro area.  This is an important data to ascertain how businesses and people are feeling about the economic situation in their homeland.

At 5:55pm, I placed my straddle trade with the following details: –

EURUSD   –   1.0645   –   1.0665   –   1.0685   –   Spot at 1.0665, and SLs at spot

As it turned out, German ZEW was stronger however, it was mitigated by a weaker Euro area ZEW.

The euro hardly moved, so I decided to withdraw the trade.

As the UK is also squarely looking at recovery and growth, data such as CPI, PPI and RPI becomes relevant on the radar screen.  CPI, PPI and RPI was schedule at 5:30pm Asia time.

I didn’t observe that much noise in the media but since it is a relevant data, I decided to place my straddle trade at 5:24pm with the following details: –

GBPUSD   –   1.5147   –   1.5167   –   1.5187

Spot was at 1.5167 and SLs at spot, Stop if Bid at 1.5187 and Stop if Offered at 1.5147

As it turned out CPI moved up slightly and market didn’t seem interested so at 6:18pm, I decided to square the position at 1.5210 for a trading profit of 23bps.

A potential data that could be volatile though noise in the media was somewhat muted.

Everyone seems to be looking forward to Yellen speech at 10:3opm at the Conference of Monetary Policy, Washington DC.

I decided to put on my straddle at 9:28pm with the following details: –

EURUSD   1.0704   –   1.0724   –   1.0744 with spot at 1.0724 and SLs at spot

As it turned out unemployment claims came in about par at 276K versus expectations of 270K.

EUR moved slightly by about 15bps and flatline, so I decided to withdraw the trade.

Every country is looking at economic growth, labour, CPI and unemployment.  Australia is no different.

So at 8:23am, I put on my straddle with the following details: –

AUDUSD   0.7045   –   0.7065   –   0.7085 with spot at 0.7065 and SLs at spot

Employment came out whopping strong at 58K vs 15K forecast and unemployment rate dropped to 5.9% from 6.2%.

The AUD spiked up triggering my stop if bid order at 0.7085.  I sold half the position at 0.7140 and keeping the other half till Asia opens and clients starting coming in in the mid morning.

Unfortunately, the AUD didn’t really move very much more, so I closed the other half of the trade at about 10:30am at 0.7145.

Trading profits was 55bps and 60bps for an average of 57.5bps on $100Mn trade size.

I decided to switch my attention to the EUR and at 9:24pm, placed my straddle as follows: –

EURUSD      1.0860   –   1.0880   –   1.0900 with spot at 1.0880 and SLs at 1.0880.

Unemployment claims came out slightly higher at 276K versus forecast of 263K.

EURUSD went up slightly to 1.0893 and I decided to withdraw the trade.