GbpUsd: We locked at 1.5134 and added 2 x -50k before Carney and -50K just now Carney this morning was our friend and we have now a companion that is GBPAUD. This is quite coherent with our general view since we are are Bullish on AUD. We also said in a previous post that we insure our AUD long attempt with the three higher position of GBPUSD. A the time we took profit and let run the higher positions. The end of the Week is thin in terms of Data and liquidity (US holidays) , hence we will probably see the market ranging and Techs playing PingPong. We will also evaluate 1.5050 price action to add more or/and lock lower.
EURO trade EurUsd: We closed our lower -100k position with 27pips Loss. We added 3 x -100K above 1.0650. Attached Image We had deep incursions above 1.0650 and we added there. The rsilience of 1.0600 support starts to question many about the pair direction. We still have in mind the 3rd Dec ECB decision, but we will start to deleverage very soon.
Euro Trade EurJpy: We added -50K at 130.575. We will probably make this one heavier than the EurUsd to keep it for longer. Here we are not distorted by the USD probable peak.
Euro Trade EurJpy: We added -50K at 130.575. We will probably make this one heavier than the EurUsd to keep it for longer. Here we are not distorted by the USD probable peak. EurAud: We added -50K on the EurAud companion at 1.4706. EurAud helped us to initiate the trade based on the weakness of the Euro.
AudGbp: We opened -50K at2.0933. The pair is our GBPUSD companion. The positioning on this pair will be highly correlated to our AUd and GBP trades. We need the cable to break out south the 1.5050 area to validate our view. Nevertheless we will add at the first break out attempt.
AUD TRADE AudUsd: Nov 27 2015 we closed all our AudUsd positions with a loss of -80 pips. As we said several times, this one was Tricky. The AUD trade is risky and vs USD is the riskier. We closed all AudUsd pairs because we don’t have consensus with us. In the same time we move the companion pairs, namely EurAud and GbpAud to Euro and Gbp trade respectively. EurAud: Nov 27, EurAud moved for now to the Euro Trade as a new companion with +1500 pips floating. We could have maintained the AUD trade seeing how profitable we are on EurAud but we really have no incentives anymore about the AUD. Therefore we are going to mange the position within the Euro trade. Notice that the higher positions are locked which can be seen as a sign of uncertainty on our part.
GBP TRADE GbpUsd: We closed the upper positions with +508 pips and added lower -350K We tweeted this morning we were selling GBPUSD above 1.5000 We closed the upper positions to start reducing our exposure to the USD. As we warned the cable is a crazy horse, because its the gathering of technicians playing intraday set ups in a relatively non liquid pair. This generates big gaps (big candles) on intraday with no real reason. Nevertheless consensus is selling GBP for now but careful with stops if daily charts levels are too wide for you. Also keep in mind that cable is highly sensitive to EurGbp flows and don not enter when GBP is bid vs the Euro. For intraday traders: The best way to trade the cable is by pending limit orders above daily resistance and lock it after 20 or 25 pips with a TP of 45 pips. Cable moves mechanically like the ES but with far less volume. Note I am seeing sometimes I mix up charts, sorry for that. Trying to do my best GbpAud: We added -100K Even though we closed the AudUsd we keep this one as a companion, since we dont see any significant upside for the GBP so far. Though we will not add until we have a clear view on AUD.
EURO TRADE EurUsd: We added -100K near 1.06 and 400K below it. Our alarm line (dashed red) was triggered 2 times. The first time the pullback was swift pointing at some intraday liquidity search, the second during Asian thin market, each time the price was pushed back. You cannot add here if you're not already protected by higher positions or/and with a companion. Be warned we will assist to very heavy re-positioning next week (highly impacting data and 3rd December ECB decision on rate). The positioning will occur in a heavily "shorted" pair prone to short squeezes which can be massive. Furthermore we are near the End of the Year with fund managers sitting on the sidelines in a risk off stance to protect their shortly full year statements releases. Some banks, though not the biggest FX players, are already considering that the FED/ECB rate differential is already priced in; this means they are out of the game or quick to liquidate. Repositioning for Specs : Buying back to trigger short squeezes to sell again higher, problem is the upmove can be huge in a heavily shorted instrument. EurJpy: We have now -275K exposed and we will not add but probably start to TP some next week. The 130.000 barrier / target was hit. We don't see any significant risk to the pair. The current Geopolitical mess (Russia/Turkey) if worsening is JPY bullish (safe haven); just what we want. Though we prefer to lose money than see rising tensions between OTAN and Russia.
EURO TRADE EurUsd: Added -400K and a Tp at 1.0535 for the lower -900K. This is a quick update signalling we are starting to deleverage with a TP at 1.0535 for the 5 lower positions (-900K). Note: We rarely use a TP since we trade dynamically, but here we have to insure the risk we take by being positioned ahead of a crucial week prone to short squeezes. Note also that our TP is inside our target area (white zone).
FOREX our latest view: The Euro is heavily sold all over the board and versus almost everything. Now we start hearing talks from big players seeing a bottom based on the perception that the FED/ECB policy differential is now fully priced in. It’s possible, but we are specs and we believe that Forex is also driven by what’s likely going to loom not only by how much known and anticipated drivers are priced in. This is an interesting statement because it means that not all the available information is in the price (anti Tech dogma) and also means that the currency valuation is not only made by known and anticipated information (anti Fundies dogma). From this view and also because Forex can only focus on one thing at a time we think that the price will strongly consolidate after the 2 events (FED and ECB) and after that the next Focus will probably be parity during the first 2016 quarter. For this consensus to build up we need to see how price reacts to both events, that is, is the Euro still the Euro and is the Dollar still the dollar?. On a shorter term big players need to liquidate their heavy “shorts” and they know that the price formation is entering the “buy the rumor sell the fact scenario”. The price will return North afterthe ECB decision, but not too North because the event is followed by other high impact drivers like NFP and Yellen / Draghi speeches, not to mention the world wide awaited FOMC decision on rates. It’s a crazy week, but its impact is likely to be a bit dampened unless something really surprising occurs like Draghi being more hawkish or Yellen more Dovish. Stay covered.