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Tag Archives: eurusd

4 Dec; NFP

The non farm payrolls is one of the important numbers the FOMC will be looking at for the potential rate hike two weeks from now.

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

Sell EURUSD, Stop if Offered:  1.0880

Spot: 1.0900

SL: 1.0900

As it turned out, NFP came in higher at 211 versus forecast of 201, more importantly, last month’s number was adjusted upwards from 271K to 298K.

Unfortunately, the EUR whipsawed, my trade was triggered at 1.0877 and it was squared at 1.0907 for a trading loss of 30bps.

You can’t win all the time.

EURUSD is now hovering at 1.0877 @ 9:45pm.

Ok going to shut down for the week.  Here’s wishing all a great weekend.

3 Dec; ECB Rate Decision…………..what a whipsaw!!!

I suppose the whole world was looking out for this event today, wondering what Mario Draghi will do.  We all know that he will continue to ease but the real question is whether or not the easing will be aggressive or not?

At about 8:33pm, I put in my trade with the following details: –

Spot: 1.0550

Buy EUR, Stop if Bid: 1.0570

Sell EUR, Stop if Offered: 1.0530

SL: 1.0550

At 8:40pm, Financial Times leaked that there was no change in decision, the EUR spiked up, triggering my 1.0570 level, I followed it till 1.0640 and squared the position right after the media confirmed that FT made and error.  I locked in a 70bps trading profit.

I decided to put in another trade with the following details: –

Spot: 1.0600

Buy EUR, Stop if Bid: 1.0630

Sell EUR, Stop if Offered: 1.0570

SL: 1.0600

At 8:45pm, it was announced that ECB cut deposit rate to -0.3% (previously, -0.2%), market took it as a ‘whimpy’ move by Draghi and instead of the EUR falling it spiked up again.  This time driving higher than the last level a few minutes ago.

It triggered by 1.0630 level and I followed it till it hit 1.0690 and I squared the position for a trading profit of 60bps.

In totality, 130bps trading profit thanks to Draghi.

As I was not really comfortable with the event because I felt that there could be some irrational whipsaw volatility, I decided to cut down my trade size and did only US$1Bn, much lower than our normal size.  Then again, risk management is also in managing the size of your trade.

I am not going to wait around for the press conference. Almost had a heart attack earlier.

Guess what?  The EURUSD is now 1.0800, 10 minutes into the press conference.  Did I want to risk the gains in my earlier trade? No, decisions we have to make each time given the situation at the time.  Easy to say in hindsight, but when one is in the hot seat at the time, what will we decide to square the position or keep it open?

19 Nov; Unemployment Claims?!

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.

17 Nov @ The FOMC Minutes!

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!!!

 

17 Nov @ ZEW Sentiment

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.

12 Nov @ US Unemployment Claims

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.

5 Nov @ US Unemployment Claims

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.

29 October @ FOMC but no press conference

The amount of noise coming into the last hour before FOMC gave me cause to put in a trade.

At about 1:55am, I put in the following straddles: –

GBPUSD   –   1.5300   –   1.5321   –   1.5340  Spot was at 1.5321 and SL at spot level

EURUSD   –   1.1050   –   1.1073   –   1.1095  Spot was at 1.1073 and SL at spot level

At 2am, it was announced; Fed kept rates on hold but media is picking up the fact that the statement dropped the phrase, “global developments may restrain growth”.

We squared the trade at 2:11am at the following levels: –

GBPUSD, squared at 1.5260 for a trading profit of 40bps

EURUSD, squared at 1.10935 for a trading profit of 115bps

Thank you NEWS MEDIA; CNN, CNBC, WALL STREET, BLOOMBERG………..all of you were great!

It’s a wrap, time for drinks!

22 October @ ECB Rate Decision!

Looking at the CFTC report last friday, it appears that the entire market was just slight net SHORT the EUR.

Since, the start of this week, the the EUR has been staying within a channel of 1.1300 and 1.1380, I suppose while the market doesn’t see any surprises coming from Draghi, one can never know.

The noise in the media was picking up this afternoon and London open, but not in a big way.

I decided to put my straddle trade on just before the press conference with the following details: –

EURUSD  –  1.1295   –   1.1315   –   1.1335

Spot was at 1.1315.

When the press conference started and the first few sentences by Draghi leaned towards a still accommodating monetary policy together with strong jobless claims numbers, it sent the EUR south, triggering my Stop if Offered at 1.1295.  The first 15 minutes it has been hovering around the 1.1225 and 1.1230 level.  Now all of a sudden it dropped further to 1.1180, I believe it’s either stop loss triggers or option triggers.  I decided to square my position at 1.1188 for a trading profit of 107bps.  THANK YOU DRAGHI!

I think this means I deserve to play golf tomorrow morning.  I am also done for this week.

I am still pondering whether or not to close my books for the year.  It just seems to tempting to keep the books open for a few more trades before the year is out.

15 October @ US CPI and Jobless Claims

As this is a sensitive data for the Fed and the world, I decided to put on my straddle on three currencies as follows: –

EURUSD   –   1.1416   1.1436   -1.1456

GBPUSD   –   1.5427   1.5457   1.5497

USDJPY   –   117.90   –   118.26   –   118.56

Core CPI was slightly elevated, overall CPI was flat, jobless claims improved to 255K against forecast of 269K, and Empire state manufacturing came was weaker at -11.4 versus expectation of -7.3.

Overall, USD bias, but the market didn’t move very much.  I took out the GBPUSD order, leaving behind the EUR and JPY order.

Both the EUR and JPY orders were triggered on the Offered side.

I squared the EUR at 1.1370 and the JPY at 118.70 for a trading profit of 46bps for the EUR and a negligible 0.14 yen.

This is what I mean when the event or data is not expected to make the fx market volatile, this strategy of the straddle trade doesn’t really work well.  It needs the volatility.