I bought a 2 week call option on the USDJPY at the strike of 94.15 and breakeven of 95.86, that is, 1.71bps for the cost of the premium which is pretty expensive as volatility was high. However, my technical analysis plus the news out of Japan and Abenomics, I was confident that the yen would weaken.
I bought back the option on the last day at 0.9750 for a nice trading profit of 16.8%.
The EUR at 1.3090 has broken through the short term channel of 1.3164 and 1.3267.
The JPY at 97.64 is staying within the short term band of 96.21 and 98.25.
The AUD at 0.9260 appears to be quite resilient, staying above the 61.8% retracement level of 0.9230.
The US Durable Goods Orders came in better than forecast and the USD clawed an average of about 30bps from the majors. I was expecting a bigger move.
The appropriate and relevant price chart to look at is the 4 hour chart; it shows a high of 103.52 on 12 May and a low of 92.56 on 12 April. Moving averages has broken through the declining cloud though fast and slow stochastic is showing a downtrend tendency.
The 15 minute chart shows the yen trading in a short term band of between 96.21 and 98.25, about 2 big figure spread. Good opportunity to make quick profitable trades within the band.
I will shortly share some short term trade strategies with you.
Tenure: 1 month expiring 15 July 2013.
Strike 94.90, BE 96.79, premium is 1.89
Target; 100.38, difference is 3.59 or payout ration of 1.89X.
Looks good, need to consider quickly and execute the trade.
EURUSD
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The EURUSD is currently trading above the 61.8% level of 1.3321, the 76.4% is at 1.3437 and the 100% is at 1.3640 established on 1 February 2013.
Last night’s high was at 1.3385and the low was at 1.3282.
GBPUSD
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The GBPUSD is presently trading above the 61.8% level of 1.5754 with the 76.4% at 1.5957 and the 100% at 1.686 established on 21 December 2013
Last night’s high was at 1.5723 and the low was at 1.5650.
AUDUSD
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The AUD is a currency that really begs to be thrashed. The current spot is trading below the 0% level of 0.9671, the 23.6% is at 0.9891, 38.2% is at 1.0027 and the 50% at 1.0137. How much will it take to drive the AUDUSD to the 50% level, I don’t think alot. Home loans is down, consumer sentiment is down, however, employment is up and unemployment is down.
Let’s look at this more closely.
My hunch tells me that there is opportunity in the following: –
Call option on the AUDUSD
Call option on the USDJPY
Put option on the GBPUSD
Right now, we need to do a cost benefit analysis to determine which strategy is cost efficient and profit effective.
Quick scalp, long USDJPY at 0.9415 baed on fast and slow stochastic and squared at 0.9434 for a 19bps trading profit.
Both quiick scalps paid for today’s expenses.
I saw another opportunity in the USDJPY and also tracking today’s session of Abenomic
I bought the USDJPY at 98.29, but after half an hour, I didn’t see the yen moving the way I saw it.
So I decided to square the trade at 98.34. It is now trading at 98.24.
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%.
I am born in the Year of the Tiger.
The Panthenon Investment Group 