As it turned out, the USDJPY never did have any legs, so the option expired with a loss of 0.30yen.
Monthly Archives: November 2017
One of those much looked at economic data for the UK since it is a services economy.
I decided to place my straddle with the following details: –
Stop if Offered at 1.3175, Spot at 1.3197, Stop if Bid at 1.3215
Data came out mixed; claimant count was done, but job creation was poor, unemployment rate held constant at 4.3% and average weekly earnings edge upwards.
Market initially stayed quiet not knowing what to make of it and then it started selling off the GBP, I suppose the market took issue with the poor employment change or job creation data.
It triggered my Stop if Offered leg and I follow the market till I felt there was no more steam so I decided to square the trade at 1.3140 for a trading profit of 35bps.
Ok lah……….not too bad for the start of trading this week after coming back from a driving holiday in Malaysia……………..eat and drink.
I am deciding to take a small punt and buy a one day call option on the USDJPY with the following details: –
Strike: 113.20
Premium: .030
Breakeven: 113.50
Let’s see.
4H chart shows that the USDJPY is about touching the 200DMA.
At this point, the USDJPY can rebound back to 114 or meltdown to 111.70, how will it move.
Is this a buying or selling opportunity?!
Let’s see whether it can defend the support level of 113.20?!
I totally missed this………………SHOOT!
Looking at the Daily chart, I noticed that spot crossed the 200DMA on November 4th at 0.7697.
Does it mean that the AUD is heading for a protracted softening?
I have already bought two call options with breakeven averaging 0.7710………about 130 basis points away right now………….hmmmmm……..will I have a chance in the next three weeks for the AUDUSD to recover?
Let’s see.
An event organized by the ECB, bringing together the mightiest central bankers of the major currencies of the world together to TALK SHOP?!
Will we expect any surprises during this meeting or will all the central bankers keep a neutral tone on their respective monetary policies?
Let’s see where the different central bankers positions are at the moment: –
Yellen: the rate hike in December is a done deal and Wall Street has fully priced in the hike. Everyone is now speculating about the ‘path’; both speed and magnitude, this will move the financial markets.
Draghi: he keeps on maintaining a neutral position, saying that monetary policy could go either way depending on the needs of the Eurozone. However, he did mention that the easy monetary policy is coming as the policy has produced positive economic results in the eurozone area supposedly far better than the USA.
Carney: he is also hinting about a rate hike but didn’t pull the trigger in the last BOE meeting. Is the BOE deliberately keeping the GBP bidded? We know that the UK economy is a services economy, a financial markets economy and an education economy. The education sector is rather inelastic, so even is the GBP is stronger, people who need to fund their children’s education in the UK will just keep on paying the higher exchange rate. The services economy and financial markets economy is beginning to feel the exodus of firms moving out of the UK. Volumes of trades in the financial markets for the time being is still stable.
Kuroda: no sign of monetary tightening from him. He keeps on reiterating that Japan will have no problem hitting its inflation target of 2%, but the fact is it’s still far away. Abe’s 4 arrows economic policy had limited impact on the economy and thankfully, he has been re-elected, so any new arrows to look forward to?
The world seems to be in a state of flux both from the economic perspective and also from the monetary policy perspective. Financial markets like the USA has gone crazy, with P/Es never seen before in the past 10 years. Is liquidity channeling itself into the financial markets instead of the real economy? It may appear to be so.
December 2017 will be rememberd in history as one of the pivotal months of the past 10 years. I am not so sure traders will be closing their books just yet and miss out on what could be one of the best trading periods for the entire year.
Saw the low in the AUDUSD this morning and decided to add on to my earlier call option by doing another 1 month call option expiring Friday, December 14th with the following details:-
Strike at Spot: 0.7620
Premium: 72bps
Breakeven: 0.7692
Let’s see.
2017 has certainly been a crazy year with high volatility and uncertainties, I suppose that is what we traders live for, however, it does stress out the heart somewhat.
Just received the unaudited absolute performance of our trading year to date, and we have managed to lock in absolute returns of 160.79% till end October.
We had a total of 54 trades for the past 10 months or an aveage of 5.4 trades per month.
Our leverage was averaging about 7 times.
All in all, not a bad trading year.
As expected, RBA kept interest rates the same and the statement was positive and supportive of the labour market and economic conditions in the country.
This should be supportive for the AUDUSD, maybe, my call option will be fine.
Let’s see.
As it turned out, this was a classic case of buy on the rumor and sell on the fact.
When BOE announced the hike, plus the votes and keeping asset purchase flat, the GBPUSD went on a meltdown.
I took profit at 1.3120 for a trading profit of 115bps.
Many thanks BOE and GBPUSD!
The Panthenon Investment Group 