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Monthly Archives: July 2016

UK Mfg and Services PMI

This was going to be the first set of important data to garner the impact of Brexit on the UK.

Today was Markit Flash Mfg and Services PMI.

At about 4:27pm, after the GBP had run up about 50+bps since 3pm, I decided to do a straddle trade, a small trade size on the Long position and bigger position on the Short position as follows: –

Stop if Offered; 1.3243  Spot; 1.3273  Stop if Bid; 1.3310 with corresponding SLs at 30bps off my levels.

The data came out mixed.

Mfg PMI came out stronger at 49.1 vs 48.9, but Services PMI was much weaker at 47.4 vs 48.9.  Clearly, the banking and financial services sector was hit badly.

The overall composite was down 47.7 vs 52.4.

Immediately, my short position was triggered at 1.3243.  I quickly closed of the Long portion of the straddle.

I followed the market till about 4:56pm when, the GBPUSD had already dropped by 100bps.  I squared my position at 1.3170 for a trading profit of 73bps.  Not bad at all!!!

The current spot is trading at 1.3125.

I am now going to go with my wife for a durian party at Marina Bay Sands. Enjoy your weekend everyone.

Long GBPUSD; Strong employment data pre-Brexit

Yesterday’s UK employment data was most encouraging.  However, it is data prior to Brexit, it would be interesting to see the data the following month or two.  We need time to let ’emotions’ run through the economy, then and only then, will we have a more appropriate picture of post Brexit impact.

However, in the meantime, the data was good.

I decided to chase the market by going Long GBPUSD at 1.3100 and squared at 4:54pm at 1.3165 for a trading profit of 65bps.  Not bad.

Had to leave for an evening cocktail.  In hindsight, the GBPUSD moved higher after 5pm and again this morning at 7:30am Asia time.  Currently, it’s holding at 1.3229.

Hmmmmm……..missed out on the 100bps move, oh well. at least the drinks last night was great!

NFP…….missed it but got a reprieve

I was late getting back from dinner to catch the NFP. 
Got home at 830pm, NFP came out much stronger at 287K, majors weakened against the Dollar on average by 50bps. 

Then within 15 minutes the majors reversed against the Dollar erasing all gains. 

I couldn’t catch any trading opportunity, then all of a sudden I observed that the US JPY was down to 100. 

In my last article I discussed the 100 yen level as a possible bottom to Long the yen. 

So I decided to Long at 100.03 and in 20 minutes it hit 101 and I decided to square the position for a trading profit of 0.97 yen. Almost one big figure. Not bad to end the week. 

By the way if this article seems strange it’s because I am using my IPhone to write this article rather than my laptop. 

EURUSD……is the floor reached and rebound imminent?

4H_eurusd

The EURUSD is showing an interesting pattern. Certainly compared to the GBP, it has shown more resilience.  I believe it’s because the EU has less problems and issues compared to the UK.

It seems to be creating a floor at 1.0980.

This week’s european PMIs came out steady and upbeat. I believe all we need is to see more positive growth news coming out of EU and the EURUSD should easily jump back up to 1.1388.

If ADP for the US comes out weak, it may just provide the impetus for the EUR to be bidded upwards, of course, the big move will come tomorrow during the non farm payroll numbers.

It’s looking interesting???!!!

USDJPY…….Long at 100?!

Ever since Brexit accompanied by the economic problems in Japan, it appears that a trading opportunity is emerging.

As a safe heaven currency now, every time, negative comments are made of post-Brexit and EU, JPY is usually bidded up to 100 and sometimes higher at 98.98. I noticed that the JPY has hit 100 or better three times since post Brexit and each time rebounding back to 102.70 to 103.20.

Guess what it’s back up to 100.75 now, and moving at the 20% range of the stochastic curves.  Possible rebound back to 101, then to 102?

To play the plan vanilla options is not worth it as the vols are high resulting in elevated premiums.

What to do?  How to capture the potential opportunity?