We took a day trade position in short GBP/USD today that got stopped out and lost 0.6%.
Originally we thought the FOMC minute was neutral, and if all things are equal sentimentally, we thought USD will be good to buy against GBP. It actually might worked out because GBP/USD is back in the same range area prior to FOMC, however, we only have small stop loss as we are not convicted enough for this trade.
Now thinking back, this is really a trade we should not have taken. It was not our tradable event, it was not our usual stop loss range and everything was wrong in our management. Well…you live and learn!
Our current position GBP/JPY is still in play, although suffered a large retrace, we’re still very convicted to hold this trade and is actually considering adding more if technically we have another trigger.
GBP/AUD is still in play as well, we’re under water and is also considering adding as we’re confident to hold this trade. The key is really to be able to get through this short-term retrace and not being stopped out.
The only other currency we’re looking to buy is CAD.
I think the oil market although might have some retrace next few days, it will continue the strength until $50 and it might very well breaks it as market is buying the rumour of OPEC meeting, hedge fund might also push the price up in order to short later on.
I think the mid-term momentum is really up for WTI and CAD will be benefited from it.
The currency to sell against CAD will be either GBP as the weakness currency for now, or AUD, as AUD is in the same category as CAD and we can off-set our risk but AUD has more bearish sentiment than CAD and NZD for now.
We could also just sell USD against CAD as the inver-relation between USD and oil, however, USD has more datas to come tomorrow.
Let’s take a look at charts.
The only technical entry we have is to SHORT USD/CAD, SHORT GBP/JPY, and SHORT USD/JPY.
Because we’re already in GBP/JPY and the new entry is exactly the same spot as our previous, so no purpose to add on now.
USD/JPY is good to take, but we’re already in 2% with buying JPY so we don’t want to get into another JPY long.
That leaves us with USD/CAD SHORT.
We do have manufacturing index coming out tomorrow, but i think any data might not be a game changer unless it’s inflation data as FED already stated the satisfaction for employment and GDP, and the only real reason to hold the rate is really more sentimental, although they kept stating they’re data driven. I think the whole global uncertainty, easing direction and US election really put off their desire to do any drastic move.
CAD on the other hand has CPI and CORE CPI data and retail and core retail coming out on Friday both expected to be negative than previous datas, and WTI is in 5 green days and getting smaller and smaller.
I think i’ll hold on to any swing entry for now and wait for the intraday negative US data to get into USD/CAD trade or wait for Friday’s positive CAD data to get into USD/CAD trade.
Alternatively, GBP/CAD might be another good choice if we decide to get into buying CAD in intraday.
For now i have no swing trade opportunities.
- Main catalysts today are GBP average earning, claimant count and unemployment rate change. The overall data was mixed but slightly better at employment data. GBP is still in the range area as fundamentally bearish but need new sentimental momentum to push it down further; either a worse data coming out or some negative news.
- Crude Oil inventory has large declined today and alone with the already positive sentiment from WTI, the oil market is really strong so does CAD. We also heard rumours from Saudi saying that they’d boost the oil output because the demand is now high. Overall it’s a very good fundamental & sentiment pictures for crude oil, the biggest risk will be any change of direction from OPEC and technically we’re at 5 days green and also near psychological handle of $50. These are resistance but as long as the fundamental is strong, if OPEC meeting in September really comes to resolution and oil output restrain, we will see WTI keep going up.
- FOMC minute was released today and not really a dovish statement in my personal view, but market is negative in the USD sentiment. I think people are losing patience with FED as they’re really taking their time to not raise the rate and as mentioned, it could be economically concern, or if you believe in more conspiracy, it could be political motivation behind it. The US equity markets closed a little bit higher, and USD is generally in bearish sentiment now.
- JPY is the biggest winner today as market is sort of losing directions, GBP is weak in general, USD is bearish sentiment, EUR & CHF is bearish fundamentally, AUD & NZD are facing rate cut anticipation and equity market need new reasons to push it higher, CAD is good but now seem to be to high to buy as WTI is in 5th green days as mentioned. So at this kind of negative sentiment and uncertainty, JPY will be the only choice.
- NZD has no news but still in a good spot due to last positive data and still high yield currency, same as AUD but AUD suffered from RBA comments days ago.
We took a day trade position in short GBP/USD today that got stopped out and lost 0.6%.
Originally we thought the FOMC minute was neutral, and if all things are equal sentimentally, we thought USD will be good to buy against GBP. It actually might worked out because GBP/USD is back in the same range area prior to FOMC, however, we only have small stop loss as we are not convicted enough for this trade.
Now thinking back, this is really a trade we should not have taken. It was not our tradable event, it was not our usual stop loss range and everything was wrong in our management. Well…you live and learn!
Our current position GBP/JPY is still in play, although suffered a large retrace, we’re still very convicted to hold this trade and is actually considering adding more if technically we have another trigger.
GBP/AUD is still in play as well, we’re under water and is also considering adding as we’re confident to hold this trade. The key is really to be able to get through this short-term retrace and not being stopped out.
The only other currency we’re looking to buy is CAD.
I think the oil market although might have some retrace next few days, it will continue the strength until $50 and it might very well breaks it as market is buying the rumour of OPEC meeting, hedge fund might also push the price up in order to short later on.
I think the mid-term momentum is really up for WTI and CAD will be benefited from it.
The currency to sell against CAD will be either GBP as the weakness currency for now, or AUD, as AUD is in the same category as CAD and we can off-set our risk but AUD has more bearish sentiment than CAD and NZD for now.
We could also just sell USD against CAD as the inver-relation between USD and oil, however, USD has more datas to come tomorrow.
Let’s take a look at charts.
The only technical entry we have is to SHORT USD/CAD, SHORT GBP/JPY, and SHORT USD/JPY.
Because we’re already in GBP/JPY and the new entry is exactly the same spot as our previous, so no purpose to add on now.
USD/JPY is good to take, but we’re already in 2% with buying JPY so we don’t want to get into another JPY long.
That leaves us with USD/CAD SHORT.
We do have manufacturing index coming out tomorrow, but i think any data might not be a game changer unless it’s inflation data as FED already stated the satisfaction for employment and GDP, and the only real reason to hold the rate is really more sentimental, although they kept stating they’re data driven. I think the whole global uncertainty, easing direction and US election really put off their desire to do any drastic move.
CAD on the other hand has CPI and CORE CPI data and retail and core retail coming out on Friday both expected to be negative than previous datas, and WTI is in 5 green days and getting smaller and smaller.
I think i’ll hold on to any swing entry for now and wait for the intraday negative US data to get into USD/CAD trade or wait for Friday’s positive CAD data to get into USD/CAD trade.
Alternatively, GBP/CAD might be another good choice if we decide to get into buying CAD in intraday.
For now i have no swing trade opportunities.
