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Monthly Archives: August 2016

26 August 2016; Long USDJPY at 100.12

During the first 15 minutes of Janet Yellen’s speech at Jackson Hole, she seemed to suggest that the Fed wasn’t yet prepared to hike rates. Yen strengthened to near 100 and I decided to Long USDJPY at 100.12 cash position.

Later on, the floor fell out from under our feet when Janet said that the case to raise interest rates is getting stronger as the US economy approaches the central banks’ goals.

Then, it was USD bulls across all the majors.

USDJPY hit a high of 101.29, but I squared my position at 101.12 for a nice round figure of 1 yen trading profit.  Thank you Janet Yellen.

Looks like NFP will be on the radar screen next week.

Here’s wishing everyone a great weekend.

23 August 2016; Long USDJPY at 99.99 cash position

Yesterday afternoon presented another opportunity when USDJPY dipped below 100.00 to a low of 99.92.

Continuing to believe in my view of trading USDJPY between 100 and 102, I decided to Long USDJPY at 99.99 on a cash trade, that is, no leverage.

Just five minutes ago at 11:35pm Singapore time I squared the position at 100.53 for a trading profit of 0.54 yen.  Again not bad for a low controlled risk trade.

Maybe the next time I will do a leverage trade.

22 August 2016; Squared USDJPY cash position at 100.80

Woke up the previous morning to see that USDJPY tried to break 101 in the last hour of US session, hitting a high of 100.84.

Then it came down to 100.25 and recovered to 100.65 when I turned on the computer at 10:15am.

I followed the price action till about 2pm in the afternoon Asia time where it hit a high of 100.89 then started coming off, so I decided to square my cash position at 100.80, for a trading profit of 0.85 yen.  Not a bad trade.

The thing now is whether or not there is a case to short USDJPY whenever it hits near 101 or 102???

18 August 2016; Bought again cash position; Long USDJPY @ 99.75

Well, today in Asia time, the USDJPY kind of scared the market by dipping below 100 to a low of about 99.64.

I still believe in my call on Long USDJPY any time it hits 100.  So I added another cash position Long USDJPY at 99.75 adding onto the existing position at 100.15, giving me an average of 99.95.

Let’s see.

18 August 2016: UK Retail Sales

I wasn’t about to put on a straddle trade for this economic data, instead, I kind of made up my mind to chase the market if the data came out strong.

My gut feel tells me that the data would be somewhat muted.  Guess what, it came out strong at 1.4% versus expectations of 0.1%.  I immediately jumped in at 1.3125 and rode the market up and decided to square my trade at 1.3167 for a trading profit of 42bps.

Not too bad for a quickie!

Now are we going to see any action tonight in the US; Philly Fed Mfg Index and Unemployment Claims?

16 August 2016: Long USDJPY

Looks like it’s yen bulls again today, from 101.24 Asia morning, it’s now 100.18.

The fast and slow stochastics were also trending below the 20 percentile level.

True to my view, I executed a fresh cash position; Long USDJPY at 100.15.

Let’s see where this takes us.

12 August 2016; squared USDJPY cash position

At about 7pm on Friday, August 12th, I saw the yen starting to fall from its peak of 102.23, my gut feel was telling me that this is a window I had missed a few days back when I thought it would go higher than 102.

So I decided to square off my cash position at 102.10 against my entry of 100.80, it was a nice trading profit of 1.3 yen.

NFP

Even though ADP earlier in the week came in on the money, that is, 179K versus forecast of 171K, there was still an off chance that NFP today could come in stronger than forecast.  Then again, it’s the summer and usually there are more job creations during this period.

I decided to put my straddle trade on the EURUSD and USDJPY at about 8:26pm with the following details: –

EURUSD   –  Stop if Offered at 1.1108, Spot at 1.1138, Stop if Bid at 1.1168 and corresponding SLs at 30bps out.

USDJPY   –  Stop if Offered at 100.80, Spot at 101.18, Stop if Bid at 101.48 and corresponding SLs at 30bps out.

As it turned out, NFP came in very strong at 255K versus expectations of 180K.

Both my trades was triggered.

I squared the EURUSD at 1.1048 for a trading profit of 60bps.

I squared the USDJPY at 101.82 for a trading profit of 0.34.

A pretty good end to the first week of trading in August.

It’s TGIF and I am going to shut down my computer and go meet some friends for drinks!!!

Here’s wishing one and all a great weekend.

BOE done it again!

Market had almost priced in an interest rate cut of at least 0.25% some even speculating 0.50%.  However, the sensible cut would be 0.25% and the BOE did not disappoint.

Market was really waiting for whether or not the BOE will announce a larger asset purchase amount to pump more liquidity into the economy post Brexit to help boost the economy.

I decided to place a one leg straddle with the following details: –

GBPUSD:   Stop if Offered at 1.3300, Spot at 1.3325 and SL at 1.3330

As it turned out the interest rate cut didn’t really move the market, but what cause the floor from under the GBP to collapse was the announcement of an increase of 60Bn to the asset purchase program totaling 435Bn (previously, 375Bn).

My trade was triggered at within 5 minutes the GBPUSD was at 1.3172, I squared the position at 1.3185 for a trading profit of 115bps.  Thank you BOE, thank you Carney.

3 August 2016; Long USDJPY at 100.80 on cash

As shared in one of my earlier tweets, I believe the fx markets are increasingly more difficult to trade on leverage or on options, simply because the premiums are too expensive and the price actions whipsaws too much.

Going forward, I feel that in some trades it would be more prudent to do the trade on a cash basis.  We can then hold the position for as long as needed till the market comes to us.

In the case of the USDJPY, I have seen a recent pattern where whenever it hits near 100, thereafter, given enough time, it will rebound back towards the 105 level and this happens in the short term.

On August 3rd at about lunch time in Asia USDJPY hit a high of 100.74, I decided to Long USDJPY at 100.80.

Since then, it has high a high of 101.65 and is now trending at 101.04.

I am confident that I will be able to make one to two big figures on this trade within a month.

Let’s see……….fingers crossed!