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Tag Archives: foreign exchange

Update on 1 month GBPUSD call option @ 12 March 2013

We were given another opportunity to square off the option on April 2nd and we took it.

We sold the call option at the spot of 1.5240, against our breakeven of 1.5110, we realized a trading profit of 130bps or a 0.85% absolute gain.

We will stay sidelines till we get a better feel through our analysis, just where the GBP will be heading.

For now, the Daily Chart; is showing further weakness in the GBP with trend trading below a declining cloud.  The lowest level in 2012 was 1.5352, in 2011 it was 1.5467 and in 2010, it was 1.5085, so the current spot of 1.5086 is incredibly low for the GBP, however, technical analysis does not show that there is a base.

27 March @ EURUSD @ Technical Analysis

Daily chart shows that the lowest point occured on 24 July 2012 at 1.2041 and the recent peak was on 1 February 2013 at 1.3709.

It appears that the Euro is basing or trying to find a base with a possible downside risk.  However, downside risk is mitigated by a rising ichimoku cloud, though the spot rate is currently trading below the cloud.

Trend is also near the bottom band of the bollinger bands.

Hourly chart shows that there is an impending breakout based on the squeezing of the bollinger bands.  Question is when it breaks out, is it going to break upwards or break downwards.  This will depend on the upcoming economic data and the political scene in the Eurozone.  The Cyprus fiasco is by no means the end of the story, the resolution was a stop gap measure to avoid a disaster.

12 March 2013 @ EURUSD 1 month call option

We executed a 1 month call option; strike at 1.3100, spot was 1.3004, breakeven at 1.3181, premium cost was 81bps.

12 March 2013 @ AUDUSD 1 month call option

We executed a 1 month call option; strike  at 1.0300, spot at 1.0283, breakven at 1.0365, cost of premium was 65bps.