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Tag Archives: forex

NFP…….missed it but got a reprieve

I was late getting back from dinner to catch the NFP. 
Got home at 830pm, NFP came out much stronger at 287K, majors weakened against the Dollar on average by 50bps. 

Then within 15 minutes the majors reversed against the Dollar erasing all gains. 

I couldn’t catch any trading opportunity, then all of a sudden I observed that the US JPY was down to 100. 

In my last article I discussed the 100 yen level as a possible bottom to Long the yen. 

So I decided to Long at 100.03 and in 20 minutes it hit 101 and I decided to square the position for a trading profit of 0.97 yen. Almost one big figure. Not bad to end the week. 

By the way if this article seems strange it’s because I am using my IPhone to write this article rather than my laptop. 

EURUSD……is the floor reached and rebound imminent?

4H_eurusd

The EURUSD is showing an interesting pattern. Certainly compared to the GBP, it has shown more resilience.  I believe it’s because the EU has less problems and issues compared to the UK.

It seems to be creating a floor at 1.0980.

This week’s european PMIs came out steady and upbeat. I believe all we need is to see more positive growth news coming out of EU and the EURUSD should easily jump back up to 1.1388.

If ADP for the US comes out weak, it may just provide the impetus for the EUR to be bidded upwards, of course, the big move will come tomorrow during the non farm payroll numbers.

It’s looking interesting???!!!

USDJPY…….Long at 100?!

Ever since Brexit accompanied by the economic problems in Japan, it appears that a trading opportunity is emerging.

As a safe heaven currency now, every time, negative comments are made of post-Brexit and EU, JPY is usually bidded up to 100 and sometimes higher at 98.98. I noticed that the JPY has hit 100 or better three times since post Brexit and each time rebounding back to 102.70 to 103.20.

Guess what it’s back up to 100.75 now, and moving at the 20% range of the stochastic curves.  Possible rebound back to 101, then to 102?

To play the plan vanilla options is not worth it as the vols are high resulting in elevated premiums.

What to do?  How to capture the potential opportunity?

While the whole world was focusing on the GBP, I was also looking at the USDJPY

At near 10:30am or about the time when results from at least 70% of the polling centres were coming in with Brexit clearly on the table.  The JPY strengthened from 104 down all the way to 98.87.

When news came out that the BOJ may come in to intervene against the stronger yen, I decided to put in a spot position at 100.00 with a stop loss at 99.70.

I kept following the position till it reached 102.70 and I squared the position for a yum yum 2.7 yen!!!

Thank you Brexit and BOJ!

23 June @ Day of Voting for Brexit or Bremain

Decided to take a small punt though I wasn’t exactly comfortable with the volatility.

A two day put option was 120bps, which means for every 1Million nominal option size, the cost is $12,000/-.

Nonetheless, decided to take a small position with the following details: –

2 Day Put Option

Option Amout: $2Million

Strike: 1.4862

Premium: 115bps

Breakeven: 1.4747

It’s gone crazy now!!!!

About half of the results are in and Leave leads by 3.5%, GBP plummets.

I decided to take profit on my option and sold the option five minutes ago at 1.3490 for a whopping 1,257bps or a payout ratio of 10.4:1!!!!!

I am out for the rest of the day! Thank you UK!

Further update on NFP and USDJPY

I also did a trade on the USDJPY but not a straddle trade, instead, I just took an off chance view that the NFP could come in weaker and placed my bets on the JPY as follows: –

USDJPY: Stop if Offered; 108.53, Spot; 108.83 with SL; 108.80

As it turned out NFP came in very weak and my out of the money trade was triggered.

I squared the EURUSD earlier, and kept the USDJPY trade alittle longer and got out half an hour later at 107.45 for one big figure trading profit of 1.08!!!

Best part about it was I got out of this trade while in a lounge with friends drinking wine.

Here is wishing all a great TGIF – Thank God It’s Friday!

3 June @ NFP!!!!!

This week has been a sleepy week despite important events like ECB, manufacturing data, ADP and of course, tonight, NFP?!

Since there weren’t any trading opportunities throughout the week, it would stand to reason that the FX markets would be ‘itchy’ to create a movement if a sufficient reason was given.

Today’s NFP to cap off a lacklustre week or is it?

Anyway, we had to be there, so at 8:28pm, I put in my trade as follows: –

EURSUD: Stop if Offered; 1.1125, Spot; 1.1154 and Stop if Bid; 1.1180 with corresponding SLs at 30bps away on both sides of the goal posts.

As it turned out, NFP came out at a shocking 38K versus forecast of 159K, with alittle offsetting by unemployment rate at 4.7% verusus 4.9%

My Bid trade was triggered at 1.1180 and I waited till about 5 minutes later and squared at 1.1260 for a trading profit of 80bps……….not bad!

Thank you NFP!!!

Everyone have a great weekend!

I am out of here and going to take my wife out to meet friends for drinks.

RBA Rate Decision – Game in play

I hope all of us was there at 12:30pm today for RBA’s rate decision?

This meeting of RBA has been getting a lot of noise in the media since the past three weeks.

I decided to buy a AUDUSD Put Option with the following details: –

Strike; 0.7696, Premium; 34bps, Breakeven; 0.7662, expiry 10am NY 4 May

As it turned out, the RBA decided to cut interest rates by 0.25% to 1.75%.  As expected market reacted selling the AUD down aggressively.

Within 15 minutes, I decided to sell the option at 0.7563, locking in trading profits of 99bps!

Thank you RBA.

Trust all of you also managed to capture this opportunity……….(“,).

More drama later into the week…………

FOMC

This is what I usually try to avoid; a FOMC meeting where only a statement is published and no press conference.

Then, the whole world begins dissecting the statements and using different words to support their views, this usually causes big whipsaws as we just saw a few minutes ago.

Just before the release of the statement, EURUSD was holding at 1.1332, when the statement was published, it fell to 1.1275 as the reference to global risks was taken out which implied that the Fed will just focus on the US and not use the rest of the world as an excuse for not raising rates.

Then, the market zeroed in on the word, ‘stance’ of the monetary policy to mean an accommodating stance, EURUSD reversed and shot back up to 1.1333.

Anyway, I put in a small OTM order betting the downside with the following details: –

EURUSD   –   Stop if Offered at 1.1300, Spot 1.1332, SL 1.1330

As it turned out the first move was down and it triggered my trade, I quickly decided to square off the trade at 1.1275 when I was speed reading through the statement and felt that the statement was quite balanced.

Gripping and stressful trade, and only rewarded with trading profits of 25bps.

Looks like June will be the D-Day!

Goodnight everyone.

GBPUSD in April

The story of Brexit has dominated the GBP pretty much the entire month of April.

It started at about 1.4272 on April 1st, hit a low of 1.4019 on April 6th and 7th and from there it established four highs topping at 1.4632 on April 26th.

1H + Fibo suggest that spot is trading at the 100% level

4H + Fibo suggets that spot is trading at 50% level

Any negative surprise to the GDP data will surely see GBP crashing! Wall Street is expecting a range between 0.4% to 0.5% with general consensus at 0.4%.

Let’s see.  Let’s all be there to capture any potential opportunity if it presents itself.

We did well this morning with the AUD CPI, will out positive momentum continue this afternoon in the UK trading session?!