Chinook's EUR/USD (E/$)Mumblings
- Thread starter chinook
- Start date
[17:06 NEWS: Snow Says Flexible FX At Forefront of Intl Policy] San Francisco, September 20th: US Treasury"s Snow is becoming increasingly vocal about flexible FX policy as the G7 fin min meeting approaches Oct. 1st. He states that he will keep flexible fx at the forefront of international policy and that artificially set FX rates spur global imbalances. But despite signs that Snow is heating up pressure, specifically aimed at China, the non-deliverable forwards in the Yuan have eased from recent highs. Yuan NDFs traded at 2300/2200 overnight, down from 2825/2725 last Thursday and the highest levels since April.
[16:54 EUR/USD: Election Of Relatively Little Interest, Traders Say] Boston, September 20: The US presidential election holds relatively little interest (from a trading perspective) for most traders, a small, very unscientific survey reveals. Most see neither Bush nor Kerry being particularly fiscally conservative. Kerry plans to hike tax rates on the top 2% of American households to pay for new programs like increased government spending on health care. Bush wants to make tax cuts permanent in a second term. The stock market has favored Bush of late, given his investor-friendly agenda like cutting taxes on dividends and capital gains. As Bush"s fortunes improved in August, so did the major US
indices. The WSJ goes in depth on this point this morning. Markets hate uncertainty, and with Bush comes a good bit of certainty, for whatever its worth. EUR/USD trades at 1.2165, just below session highs at 1.2175.
[16:31 FX OPTIONS: JPY Vols Buoyant, But Interest Limited] New York, September 20: Despite a holiday in Japan and falling vols in most currency pairs, JPY vols seem to have found at least a short-term base. That is not to say prospects for range breakout are growing in any way for the near future. On the contrary, traders say the prospect of spot getting even above 110.50 will be difficult with exporter offers slowing gains the whole way. 1-month USD/JPY vols rose 0.1% to 8.3% and the Risk Reversal steadied at - 0.5% favoring JPY calls. There are still 107.00-111.20 double-no-touches that are limiting any hope of a breakout and until that happens, traders will be pressed to make any significant price action. 1-month EUR/JPY vols rose 0.2% to
8.45% and the RR steadied at -0.4% favoring EUR vols.
[16:26 USD/JPY: Repatriation Flows Seen Capping Rallies] San Francisco, September 20th: USD/JPY attempts to rise above 110.00 continue to meet with fresh offers, with reports of repatriation flows seen capping USD/JPY ahead of the half fiscal year end at the end of September. Large offers remain in the
110.35-50 area with some offers staggered as high as 111.00. But attempts to front-run those offers are attracting sellers on any rally above 110.00. The broad 109-110.50 range continues to contain trading, and the fact that there is another Japanese holiday on Thursday is seen contributing to range trading on
USD/JPY. USD/JPY trades at 109.87/92 currently.
As I was writing we jumped up and I made a few shorts ...
I guess I have a short bias today.
[16:54 EUR/USD: Election Of Relatively Little Interest, Traders Say] Boston, September 20: The US presidential election holds relatively little interest (from a trading perspective) for most traders, a small, very unscientific survey reveals. Most see neither Bush nor Kerry being particularly fiscally conservative. Kerry plans to hike tax rates on the top 2% of American households to pay for new programs like increased government spending on health care. Bush wants to make tax cuts permanent in a second term. The stock market has favored Bush of late, given his investor-friendly agenda like cutting taxes on dividends and capital gains. As Bush"s fortunes improved in August, so did the major US
indices. The WSJ goes in depth on this point this morning. Markets hate uncertainty, and with Bush comes a good bit of certainty, for whatever its worth. EUR/USD trades at 1.2165, just below session highs at 1.2175.
[16:31 FX OPTIONS: JPY Vols Buoyant, But Interest Limited] New York, September 20: Despite a holiday in Japan and falling vols in most currency pairs, JPY vols seem to have found at least a short-term base. That is not to say prospects for range breakout are growing in any way for the near future. On the contrary, traders say the prospect of spot getting even above 110.50 will be difficult with exporter offers slowing gains the whole way. 1-month USD/JPY vols rose 0.1% to 8.3% and the Risk Reversal steadied at - 0.5% favoring JPY calls. There are still 107.00-111.20 double-no-touches that are limiting any hope of a breakout and until that happens, traders will be pressed to make any significant price action. 1-month EUR/JPY vols rose 0.2% to
8.45% and the RR steadied at -0.4% favoring EUR vols.
[16:26 USD/JPY: Repatriation Flows Seen Capping Rallies] San Francisco, September 20th: USD/JPY attempts to rise above 110.00 continue to meet with fresh offers, with reports of repatriation flows seen capping USD/JPY ahead of the half fiscal year end at the end of September. Large offers remain in the
110.35-50 area with some offers staggered as high as 111.00. But attempts to front-run those offers are attracting sellers on any rally above 110.00. The broad 109-110.50 range continues to contain trading, and the fact that there is another Japanese holiday on Thursday is seen contributing to range trading on
USD/JPY. USD/JPY trades at 109.87/92 currently.
As I was writing we jumped up and I made a few shorts ...
I guess I have a short bias today.
Well that's my secret, he he
We're trading the Euro FX futures at CME. Volume is reported for each trade. Euro FX futures is the most liquid FX contract at CME and spreads are lower. I'm also working on my "mental balance". That's why I'm only trading the EurUsd futures right now.
Chinook
Well, I think I'll call it a day with 31 ticks on 6 trades (including asian session earlier) ...
Won't try and push my luck towards the close and just before the FOMC -- I see my last short could have gone somewhat further - esp. if we go to 1.2155 on the spot. Profits rule the day. Good luck to the rest of you.
edit: we're getting awfully close ... hmm, let go of another 10-15 ticks potential to write here - but better safe than sorry.
Won't try and push my luck towards the close and just before the FOMC -- I see my last short could have gone somewhat further - esp. if we go to 1.2155 on the spot. Profits rule the day. Good luck to the rest of you.
edit: we're getting awfully close ... hmm, let go of another 10-15 ticks potential to write here - but better safe than sorry.
You did better than I. I only made 13 pips on 3 trades...
Quote from Gringinho:
Well, I think I'll call it a day with 31 ticks on 6 trades (including asian session earlier) ...
Won't try and push my luck towards the close and just before the FOMC -- I see my last short could have gone somewhat further - esp. if we go to 1.2155 on the spot. Profits rule the day. Good luck to the rest of you.
edit: we're getting awfully close ... hmm, let go of another 10-15 ticks potential to write here - but better safe than sorry.
Well, we're obviously in a range ahead of the FOMC, and it's just a question which of the support & resistance levels which can hold. I probably should stay longer with my 'predictions' on which levels holds to ping-pong between them - but I am inclined to take profits on smaller range-swings because I am trying to be very disciplined about keeping trades profitable. No bad trades today - although my long entries below 1.2130 would have been nicer towards the end of the day.
Maybe some cross-reactions to be expected; cable has been very spicy last week.
[18:17 GBP/USD: Rumor RICS Data Leaked; Weaker Than Expected] Boston, September 20: Dealers note talk making the rounds that the RICS house price survey data has been leaked and that it has come in below expectations. The consensus was
for a dip to -2 in August from +3 in July. Weak housing prices will lessen the need for the BOE to tighten rates further. Cable is trading well below New York session highs of 1.7890. Real money names have been sellers on the pullback, dealers report. It trades at 1.7853, above pullback lows at 1.7843.
[18:08 EUR/USD: ECB"s Issing On Tape; Inflation Danger Slight] Boston, September 20: ECB Chief Economist Issing is on the wires saying the second round inflation dangers from the higher oil price are slight given the slack labor market in the Eurozone. The inflation outlook is compatible with price stability, he says. So much for the talk earlier in the session of an ECB Hike as early as November. EUR/USD us finding resistance in the mid-1.2170s. It trades at 1.2162.
Quote from Gringinho:
Well, I think I'll call it a day with 31 ticks on 6 trades (including asian session earlier) ...
Won't try and push my luck towards the close and just before the FOMC -- I see my last short could have gone somewhat further - esp. if we go to 1.2155 on the spot. Profits rule the day. Good luck to the rest of you.
edit: we're getting awfully close ... hmm, let go of another 10-15 ticks potential to write here - but better safe than sorry.
Good job. I made 22 pips on one trade. I kept my stop 3 pips looser than what I was supposed to. Damn it, I'm not going to use my brain next time I trade, I'll just follow the plan!
Chinook
http://www.elitetrader.com/vb/showthread.php?s=&threadid=37525
http://www.elitetrader.com/vb/showthread.php?s=&threadid=35372
http://www.elitetrader.com/vb/showthread.php?s=&postid=577307#post577307
... and several other posts around - especially after the ES contracted.
Deutsche Bank had a report today on the action seen lately:
EUR USD (1.2170) The euro delivered a below-average price range last week, but one cannot really accuse it of being unresponsive. It reacted appropriately to the various data publications, which means that traders are still trying to extract returns out of the low volatility. However, the entire movements are taking place against a backdrop of a clearly perceived sideways range. This means that the single-currency rises on euro-positive data, but only as long as it is in the lower half of the range; and falls on euronegative data, but again, only as long as it is in the upper half of the range. Friday presented a slight exception to this rule. Although the euro was right in the middle of its $1.20 - $1.24 consolidation, it nevertheless crept moderately higher prior to the release of the US consumer confidence figure. Apparently short -term traders had convinced themselves that this figure would come out much worse than economistsâ forecasts. When this proved not to be the case, the price quickly corrected itself again. As explained in our last report, a marketâs obsession with range trading often means that so many people are positioned just ahead of the range borders â long at the bottom and short at the top - that there is no-one left to buy or sell when the boundaries are eventually reached. This is the reason why we would be extremely suspicious of the single-currency if it were to break 1.2110. In this case, the undaunted belief in support near 1.1980 might prove unjustified; it might merely be a pausing point on the way to 1.1850. On the upside, a similar argument can be made beyond 1.2365, but, for the moment, we still require a break of 1.2410 for outright bullishness.
Further on:
Sentiment Survey of European Importers and Exporters
No need to mention again the broad sideways trading
range that has imprisoned the spot rate for the last
few months. Superfluous to evoke the below-average
price span of the last five sessions, all of which took
place right in the middle of said range. However, to
assume from this that medium-term traders sat on
their hands over the course of last week would be
wrong. Many, of course, were simply involved in
hedging, an activity that is tantamount to a retreat
from any directional opinion. But some of those who
were short took advantage of the modest week-onweek
decline to take profits on their positions. Thus,
the apparent rise in overall optimism, as measured by
our Bull/Bear-Index®, occurred rather by default; there
are simply fewer pessimists on board.
But what caused the bears to cover now? Even the
most cautious among them would readily admit that
$1.22 is approximately the centre of the broad range
and would estimate that the lower border probably lies
some 200-pips further south. Last weekâs US data
was a mixed bag of figures that did not make us
any wiser about the âtractionâ that the US economy
is supposed to be gaining. This weekâs calendar is
relatively thin â at least until Friday. So the rush to
rebuy short positions seems likely to be related to
the forthcoming FOMC meeting. A rate hike is
expected, but some might also fear some hawkish
rhetoric from the Fed chairman. So the latest
sentiment shift is not really a bet on a rising euro; it
is rather a gesture from battle-weary investors who
are keen to lock in some profits.
The latest purchases from medium-term traders
represent demand âborrowedâ from lower levels.
Any buying that occurs ahead of the lower border of
a trading range, in the belief that the threshold will
hold, weakens that border by definition. This is the
case now. However, for this theory to be tested, the
euro must move below $1.20.
<pre>Bullish Bearish Unchanged Total
Exporters 38% 36% 26% 49%
Importers 56% 12% 32% 51%
Total 47% 24% 29% 100%
Variation +1% -3% +2%</pre>
The calculation is based on the difference between the number of bulls and bears expressed as a proportion of the total number of participants. A value of 100% reflects extreme optimism and a value of 0% extreme pessimism. A value of 50% reflects a neutral opinion.