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Tag Archives: USDJPY

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!!!

 

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.

Post FOMC @ 18 September 2015

When I finally woke up in the morning on Friday after staying up at the office till about 3:30am, it was interesting to see how the fx rates have developed during Asian time on Friday.

If I had kept all the trades open, what would have happened?

AUDUSD would have been stopped out at 8:17am.

GBPUSD would have been stopped out at 8:28am

EURUSD would have been ok

However, the big winner would have been the USDJPY.  You will recall, I squared the position half an hour into the press conference with no win no loss, that is, all square.  If I had kept the position opened till late Friday morning, I would have made one big figure on the JPY, that is, 1.15 yen.  Wow!

Then again, it is not our business to hold spot positions opened for so long and more so, unsupervised.  Whenever, we have an open spot position, we will monitor it on screen till we square off the position and that usually happens within an hour or at the most two hours.

FOMC Rate Decision!

I really don’t know or didn’t know which way the flag was going to blow, simply because the media was creating alot of noise on both sides of the coin; one camp of FIs says Janet will raise interest rate, and the other camp of FIs says that Janet will hold.

As for me, I really don’t care, all I care about is the potential volatility coming into the rate decision.  The more noise the higher the volatility.  I am more interested in the verbiage in the statement and more importantly, the press conference.

I decided to put my straddle trade but with a wider goal post for safety reasons at about 1:44am: –

EURUSD  –  Stop if Bid; 1.1370, Spot; 1.1330, Stop if Offered 1.1290

GBPUSD  –  Stop if Bid; 1.5560, Spot; 1.5529, Stop if Offered 1.5480

AUDUSD  –  Stop if Bid; 0.7210, Spot; 0.7165, Stop if Offered 0.7125

USDJPY  –  Stop if Bid; 121.20, Spot; 120.85, Stop if Offered 120.35

All stop loss levels were at spot.

When the announcement of ‘HOLD’ came out, the market spiked triggering all my trades, but it also quickly settled back down and I was potentially looking at being stopped out.  Thankfully, the majors slowly moved back up before reaching my stop loss levels.

At about 2:16am, I decided to square off all my trades as follows: –

EURUSD  –  Squared at 1.1400, minus 1.1370, trading profit was 30bps

GBPUSD  –  Squared at 1.5600, minus 1.5560, trading profit was 40bps

AUDUSD  –  Squared at 0.7210, minus 0.7210, zero trading profit

USDJPY  –  Squared at 120.35, minus 120.35, zero trading profit

We did US$10Bn on each trade and all orders were OCO, which meant that we didn’t have to double up our collateral for margin.

The press conference is ongoing now, but I think I will go to sleep now because I believe her responses to questions will be to be supportive, not necessarily accommodating, probably quite neutral.

I was really expecting alot more volatility but it really didn’t happen, oh well cie la vie.  70bps trading profit isn’t too bad since we did the trades on size.

 

 

6 February @ Non farm payrolls!!!

Market was anticipating the much awaited non farm payroll numbers and the unemployment numbers to confirm that the U.S., is on track in its economic growth recovery.

Wednesday’s ADP number was not encouraging at 213K against forecast of 224k, however, it was mitigated by the upward revision of December’s number from 241K to 253K.  This means that there is a possibility that the non farm payroll numbers could surprise on the upside of forecast.

Market was steady at about 9:10pm Singapore time.  My hunch told me that the non farm payroll numbers would be better, so I decided to bet on my hunch.

Orders: –

1.  GBPUSD – Stop if Offered at 1.5290 when spot was at 1.5323

2. EURUSD – Stop if Bid at 1.1500 when spot was at 1.1486

3. EURUSD – Bought a put option expiring Monday, February 9 with a premium of 36bps, spot at 1.1486 an breakeven at 1.1450

4. USDJPY – Stop if Bid at 117.60 when spot was at 117.28

Of course, all of us knew what happened, the non farm payroll numbers came out at 257K busting forecast of 236K and the highest in the past 6 years.

Market sold off the GBP, EUR and the JPY in a BIG way!

At about 11:15pm, I decided to square off all the trades.

Squared off the GBPUSD at 1.5248 for a trading profit of 42bps.

Squared off the USDJPY at 118.88 for a trading profit of 128bps.

EURUSD stop if bid order was not triggered.

Sold off the put option at 1.1326 for a trading profit of 124bps.

In absolute terms, we made 294bps in totality for all 3 trades.

WHAT A NIGHT!  THANK YOU UNITED STATES OF AMERICA!

Trade: Short USDJPY at 102.70

This afternoon at about 4:25pm, my charts; ichimoku, ma and stochastics showing a possible trade.

I decided to short the USDJPY at 102.70, I kept watch on the trade and later on squared the trade at 102.35 at about 9:25pm.

Trade Update; Long USDJPY at 102.40

The JPY has weakened nicely pass the 103.00 level.

I believe there’s probably alittle more room to move upwards, so I am placing a take profit level at 103.00 and continue to carry the spot position.

If the JPY continues to move southwards, I may consider writing options as a strategy of placing a take profit level and at the same time earn some premiums.  I will come back to all of you to explain this strategy.

Trade: Long USDJPY at 102.40

I looked at my 15 min techinicals and everything was showing me that I should Long USDJPY which I did at 102.40 with a SL at 102.10.

usdjpy 15 min chart 2 dec

Trade: SHORT USDJPY

I placed as SHORT USDJPY stop if bid at 98.00 when the spot rate was at 98.33.

When the weaker non farm payroll number came out the JPY strengthened to 97.87.  My order was filled at 98.00 and I squared the position at 97.90 for a trading profit of 0.10.

Trades done just prior to FOMC

I was watching the fx rates the 15 minutes prior to the 2am FOMC announcement, rates were holding steady in a very tight 5 bps range.

While it is near impossible to guesstimate what Bernanke is going to do, the general consensus in the marketplace is that he will make some ‘light’ tapering so as to follow through with what he has been saying the past two months.

I placed a total of 4 trades: –

AUDUSD  –  Buy Stop if Offered at 0.9388, spot was 0.9368

EURUSD  –  Buy Stop if Offered at 1.3395, spot was 1.3372

USDJPY  –  Sell Stop if Bid at 99.10, spot was 98.85

GBPUSD  –  Sell Stop if Bid at 1.5950, spot was 1.5971

Then at 2am, Bernanke shocked the financial markets with ZERO tapering!  All the majors jumped against the USD, I was triggered on my AUDUSD and EURUSD.

I squared the AUDUSD at 0.9460 and the EURUSD at 1.3455 when I saw that the momentum was flattening out, then again, half an hour later, the majors resumed their torture on the USD.  Trading profit on the AUD was 72bps and on the EUR it was 60bps.

Today, Asian afternoon and London morning, AUDUSD is at 0.9507 and EURUSD is at 1.3567.  Oh well, one can’t capture the maximum move, I am happy with what I made in 15 minutes last night.

I was out playing golf this morning and got home early afternoon.