Trader H

TraderH is a foreign currencies trader and a former Certified Securities Representative in the Philippine equities market. All posts herein are personal views and are not endorsed by any organization whatsoever. It is important that you practice due diligence in your trade plans. This website and its authors will not be held responsible nor liable to any of the reader's losses.

Busy September 23

 Posted by at 11:07 PM  FX Market
Sep 222020
 

RBNZ Rate Statement at 10AM (GMT+8)
– If NZD goes up, short it against JPY or USD
– If NZD goes down, buy it against AUD or CAD

Series of PMI from the Euro Zone from 2 to 4PM (GMT+8)
– If EUR goes up, short it against JPY or USD
– If EUR goes down, buy it against AUD or CAD

UK PMI at 430PM (GMT+8)
– If GBP goes up, short it against JPY or USD
– If GBP goes down, buy it against AUD

US PMI at 945PM with Powell Testimony at 10PM (GMT+8)
– If USD goes up, short it against JPY
– If USD goes down, buy it against AUD, CAD, NZD, EUR, GBP, CHF

Ideal trading time should be around 3PM to 10PM

GBP Short Across the Board

 Posted by at 10:05 AM  FX Market
Sep 212020
 

UK fundamentals has changed quite a bit for the past 3 weeks. This has been due to the increasing tension with the European Union in securing a trade deal.

Other than not agreeing on a trade deal, the UK government adds fuel to the fire with a proposed bill dubbed “Internal Market Bill” that plans to safeguard its interest on Northern Ireland. This bill is a clear violation of the withdrawal agreement previously signed with the European Union causing more difficulties in reaching an agreement by October. Worse, US voiced great dissent on this bill that they expressed refusal in dealing with UK if they pass the bill.

So basically we have two underlying drivers for a GBP short:
1. Difficulty of reaching a trade deal
2. Proposed Internal Market Bill

UK is set to fully leave the EU on December 31, 2020. However, an agreement should be achieved by October to have ample time for UK to implement a law for the trade deal. The next EU-UK talks is set to be on September 28 to October 2.

Given this scenario, it is clear that GBP is a short against all currencies. The question is, which currency do we short this against and when do we start shorting?

The ideal short would be against a currency that is strong. Let’s try to figure out the possible scenarios here.

General market sentiment has been bearish recently. Personally, I gauge this by looking at US equities. If equities would continue to be bearish towards the next EU-UK meeting, shorting GBPJPY would be the best bet. If equities would start rebounding, GBPAUD will have a higher magnitude. Do note that choosing to short 1 pair over the other entails more risk than shorting both.

In terms of timing the position, the market reacted to the August meeting only until the last day. For the September meeting, the market was selling GBP at the start of the meeting. Is it possible that GBP would be sold off as early as this week? Nobody really knows.

This trade idea will take time to the actual flashpoint as much as reaching its target. My approach is to position trade and to enter in tranches. Technically, GBPJPY could still rally back up to 136.00-137.00 area. For GBPAUD, 1.7950-1.8100 would be great bargains for shorting. A 3% profit margin from entry would be conservative target.

GBPJPY:



GBPJPY Short by traderh on TradingView.com

GBPAUD:



GBPAUD Short by traderh on TradingView.com

Aug 192020
 

As a guide, this would be the current (and perhaps for the rest of year) technical and fundamental bias:

STRONGEST (buy only): AUD, EUR, GBP
NEUTRAL to STRONG: CAD, CHF
WEAKEST (sell only): NZD, USD, JPY

Based on this ranking, any sell-off on pairs like: AUDJPY, EURJPY, GBPJPY, AUDUSD, EURUSD, GBPUSD would constitute a buy.

Pairs like: GBPAUD, EURGBP, EURAUD would be more tradable buying at support and selling at resistance – range trading.

NZDCAD, NZDCHF would be more ideal to short.

Aug 182020
 

The two market forces were evidently clear at the start of pandemic up to the bullish recovery of the market. Safe haven pairs moved in tandem while risky pairs were pretty much in unison. Before I continue, here’s a ranking of which stands as the top choice of safe haven.

In the presence of fear, this is the ranking:
JPY
CHF
USD
EUR
GBP
CAD
NZD
AUD

In the presence of greed, this is the ranking:
AUD
NZD
CAD
GBP
EUR
USD
CHF
JPY

What I have noticed in the past month or so, there are some currencies that moves against the general market sentiment. First, AUD and CHF, ironically 1 is a risky asset while the other is a safe haven, has been moving the same. They are both clearly tracking gold. NZD has been remarkably weak where it failed to keep its long-term trend intact against most currencies. JPY moves at the extremes as usual although there are times when some other currency would just take its top or bottom spot.

In my opinion, the currencies are all recalibrating itself. After bulls and bears senselessly tore them apart and took them to unreasonable highs and lows, the market right now seems to be bringing them back to its proper place. Having said this, it becomes futile or even counter productive to remain thinking of what the general market sentiment is and trade on it. We should be better off by just observing the pairings of the base and counter currency against all other majors and trade on that.

GBPJPY Long

 Posted by at 2:37 PM  FX Market, Global Equities
Jul 082020
 

We have seen a good rally in equities since last week. Monday was a huge run up that was met with an equal amount selling yesterday. As of press time, Dow futures has broken yesterday’s low. We might be seeing some sort of bearishness near term. The best entry for an intraday short was about 2 hours ago.

Given the late entry for a short opportunity, there might just be another opportunity on the flip side.

Sterling has been strong lately. Market is looking forward to fiscal stimulus announcement today. This would be around 8PM (GMT+8).

Market is now moving in unison. USD and JPY are strong against risky currencies AUD, NZD, and GBP. This fiscal stimulus announcement by the UK government may provide some ground for GBP and a unilateral move may just pop up.

GBPJPY Long:

Entry 134.60-134.00, TP 136.20



GBPJPY Long by traderh on TradingView.com

AUDJPY Long

 Posted by at 1:18 PM  FX Market
Jul 012020
 

Market has spoken. Bulls pulled off another positive run yesterday to mark a 2-day winning streak. We’re expecting bulls to remain in control after a 2-week hiatus. Market remains to be risk-on mode despite last day of fiscal stimulus by the US on July 31. Could it be because investors believe that Democrats and Republicans will be able to cut a deal and extend stimulus until January 2021?

Meanwhile, bears seem to be weak with its COVID-19 story. Increasing cases seem to be a discounted issue for the market. Second-wave story might be a thing 3 more months from now.

So for the meantime, let money rule the world and risk remains the name of the game.

AUDJPY Long: Entry 74.20-73.80, SL 73.2, TP 75.6



AUDJPY Long by traderh on TradingView.com