Following from my thoughts for the GBPUSD earlier, I went ahead to place a buy limit order at 1.5330, SL at 1.5310, while spot was at 1.5302.
UK Services PMI came out very strong at 54.9 versus expectations of 53.1. Immediately, the GBP spiked up triggering my limit order, I followed the spike till I saw the stochastic peaked and sold at 1.5370, the high was 1.5371, it is now trading at 1.5356.
Locked in a yum yum trading profit of 40bps or 0.26%.
This morning at about 1130am Abe was caught saying to the press that he will SLAY the DEFLATION MONSTER and do everything to implement fiscal and monetary policies to achieve this objective.
I decided to quickly short the USDJPY at 100.24 and when the market responded, I took profit at 99.80, it went to a low of 99.43. Nonetheless, I made a tidy profit of 44bps or 0.44%.
What do I do???
Looking at the chart it appears that the current spot is at about the 50% retracement level between the high of 1.5581 and the low of 1.5023 established in the month of May.
This means that the GBP can literally swing either way, depending on the PMI data. I believe the data will outbeat the forecast of 53.1. The past 3 months has been showing an uptrend and there’s no reason to be otherwise.
Checked the option, to buy a call option till this Friday seems rather expensive at 68bps. So it looks like I may have to place a limit buy order or maybe, even a spread order, that is to buy and to sell the GBP.
Tomorrow’s GDP number will potentially be a market mover for the AUD.
Watch out for it.
AUDUSD hit a high during NY session at 0.9790 after after a two wave move once at 10pm and another time at 11pm Singapore time.
Since then, it has been retracing all the way down to the current 0.9715 level.
I SHORT the AUDUSD this morning at 0.9745 and squared the position at 0.9720 for a quick trading profit of 25bps or 0.25%.
I believe RBA will keep rates the same and will have nothing exciting to say in the press conference. I believe the RBA and the Aussie government are stuck in a corner as to how to re-energize the economy.
The Aussie economy has been reliant for too long on resources to fuel its growth in the past 5 years. It has also relied heavily on foreign capital and domestic capital to fuel the housing market.
Let’s not forget that during the worse of times the past 2 years, the Aussie has been trading between 1.03 and 1.05.
I believe we are passed the bottom, and in the near term, the AUDUSD will range bound between 0.96 and 0.98. We need to see some credible news from the Aussie government as to how they are going to structurally change the economy domestically to fuel growth.
The danger is alot of central banks are still holding AUD, when the situation in Europe and the United States is better, capital will flow out of Australia back to the home countries and it will put downward pressure on the AUD.
I had a hunch the ISM Manufacturing number for the U.S., would come in weaker than expectations.
So, I placed a LONG limit order at 1.2970 with a SL at 1.2950 when the spot was at 1.2962.
When the data came out weaker at 49 versus expectations of 50.6, the EURUSD pushed upwards, triggering out limit order at 1.2970.
We squared the position at 1.3014 for a trading profit of 44bps or 0.33%.
I am done for tonight, back to watching Korean drama and keep my wife company.
Goodnight all, see you tomorrow.
What can we expect from the RBA?
Will the RBA reduce rates again? I am not so sure that they will as the Aussie economy is not in such bad shape.
I will share my thoughts with you and also potentially a trading strategy.
Tune in.
Today, was a day the market was looking out for the UK PMI data. Gladly, the Eurozone PMI data came in slightly upbeat.
Believing that the UK data will also come in slight brighter, I put in a LONG GBPUSD limit order at 1.5260 when the spot was trading at 1.5240. I purposely put it 20bps out of the money, just in case I was wrong. I also had a SL at 1.5245.
When the data came out better at 51.3 versus expectations of 50.3, the GBP started to take off, triggering my order at 1.5260, as it reached 1.52780, we squared the position.
Ultimately, it hit a high of 1.5289 and has since come back down to 1.5265.
We locked in trading profits of 20bps or 0.13%, not a bad quick scalp for the day.
The AUDUSD took out the critical 0.9580 last support level and established a new low of 0.9539 which started me thinking is there a bottom to the AUD?
Then again, the AUD staged a great comeback by defending the low and is currently trading at 0.9665. So, the real question here is, is the AUD going to go to 0.92 like what the street is saying?
I am not convinced.
I am going to undertake an analysis of the AUDUSD and share my thoughts with all of you next week. Maybe, the time is near to do a long dated call option on the AUDUSD to capture the BIG move back up? Possible? Maybe?
Today was critical day; preliminary GDP and unemployment claims. My hunch told me that the numbers could be weak, so when the EURUSD was trading at about 1.2940 at 8:15am Eastern time, I decided to put in a LONG limit order at 1.2970 with a SL at 1.2950 if things were to go wrong.
When 8:30am rolled around; the GDP came in at 2.4% below forecast of 2.5%, and unemployment claims was higher at 354K versus expectations of 342K.
The EURUSD within 10minutes triggered by limit LONG order at 1.2970 and within the next hour it hit 1.3030 which was my take profit level. We locked in trading profits of 60bps or 0.46%………..great trade! Of course, it went to a high of 1.3060 an hour later, but then again, we can’t always buy at the bottom and sell at the top.
What’s important is to execute a prudent strategy.
Goodnight all, I am going to play golf tomorrow, so no trading for me.
I am born in the Year of the Tiger.
The Panthenon Investment Group 