Running Market Commentary
Running Market Commentary 8/8/08
Hey Guys,
I started a new thread to help give a different perspective on the FX market using our dealing teams thoughts and analysis. All thoughts and opinions are welcome!
Brief history: Our Chief Dealer is Rich Perona and he is a seasoned interbank foreign exchange spot trader. He began his career in NYC with Citigroup in 2000, assuming responsibilities on the NY/Asian shifts assisting senior Traders with client deal flow. Rich moved to Boston and assumed responsibility of the Spot Asian and London markets at IFX Markets, Inc. in 03-04. He then returned to NYC as a Foreign Exchange Dealer at Nordea Bank from 04-06. Rich then took over responsibilities as Chief Dealer for United Global Markets from 06 07. He currently manages and trades our CTA-based clients' funds and post his market commentary and certain trade ideas.
We hope this can add value. Feel free to contact me on this forum, Thanks again for having us!
WOW, I am pretty floored by this US Dollar rally. It is about time that the world finally is realizing that all the major economies are not doing any better than the US. We feel that this US rally is way overdue and we have been talking about it in our Traders Playbook for some time now. Well, enough patting of the back.
On 8/6/08, we tried to catch a falling knife by recommending to BUY AUD / USD at 0.9090. Boy, what a mistake. Our STOP LOSS got taken out at 0.8970 losing 120 pips. We should of known better, but, as a trader we buy when everyone else is selling.
Going forward, do not be surprised if this US Dollar rally continues. I believe that EUR / USD could easily be at 1.3700, even 1.4000 in the coming months.
Our only trade at this moment is SHORT CHF / NOK from 4.9800 we recommend on 6/25/08. This trade is an under the radar carry trade and currently is trading at 4.9500 and has collected quite a bit of interest.
Updated BLOG TRACK RECORD on CLOSED TRADE PIPS = 1124
ENJOY THE WEEKEND. I will be on vacation next week, so the BLOGS may not be updated as much, but I am bringing my lap top.
RUNNING MARKET COMMENTARY 8/26/08 (GBP/USD Pullabck)
With the USD still looking pretty strong, I began to look at past moves of this magnitude to see where this move could end, and where we can gain from the pullback. I found a few similar moves in the past couple of years and I calculated to see where this may end and potentially rebound. The following data table is just a trade thought and I do plan on putting this trade on but Hurricane Gustav and Englands' PMI data on Monday may sway me to be a little more careful or aggressive at this time .
1st MOVE
INITIAL MOVE UP
Beginning April '06 = 1.7200
Mid May '06 = 1.9000
18 Big Figures or 10.5% move up
THE REBOUND
Mid May '06 = 1.9000
End June '06 = 1.8100
9 Big Figures or 4.7% retreat
2nd MOVE
INITIAL MOVE DOWN
Beginning November '07 = 2.1150
Mid January '07 = 1.9350
18 Big Figures or 8.5% move down
THE REBOUND
Mid January '07 = 1.9350
Beginning May '07 = 2.0400
10.5 Big Figures or 5.4% rebound
CURRENT MOVE DOWN
INITIAL MOVE
Mid July '08 = 2.0150
Currently trading at 1.8250 or 19 Big Figures = 9.5% move down
The Rebound is going to happen, it is just a matter of where?? I believe a good spot to enter my bid would be 1.8125 area with a STOP LOSS at 1.7900. If the REBOUND is anything like the past, we could see a 5% move back up or 9.5 Big Figures. That a tremendous move, but not out of the question to see GBP / USD move back above 1.9000.
So to recap, I recommend trying to catch this falling knife of GBP / USD 1.8125 with a STOP LOSS at 1.7900 and a TAKE PROFIT around 1.9000, but that will at least a couple of months away. Risk 225 pips to make 900. I may take profit or stop myself out before this trade hits either one of my designated targets, you will just have to keep checking our BLOG.
The other trades I have recommended that are currently live :
On 8/26/08 , I recommended to SHORT EUR / USD at 1.4740, currently trading at 1.4700, with a STOP LOSS at 1.4855 and TAKE PROFIT 1.4400. Again, this trade could be taken off before the designated targets.
On 6/25/08, I recommended to SHORT CHF / NOK at 4.9800, currently trading at 4.9000. That roughly 150 US pips in the money with 2 month of good swaps. This is a fundamental trade and basically an under the radar carry trade and will keep this on for a very long time.
UPDATED BLOG TRACK RECORD on CLOSED TRADES PIPS = 1124
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The current Forex market has been somewhat choppy as of late. The US Dollar has been trying to find support and gain some ground against the other major pairs. Below is a review of the past week along with an update and a FOREX TV interview from BBFX:
CLOSED TRADES:
We recommended a EUR / JPY Short at 168.10 on the 7/17/08 during the pairs recent uptrend. We were willing to risk 60 pips to make 110 pips. This trade was executed and stopped in about 30 minutes. This trade had no shot! The market was going through the roof and we tried picking the high. Traders take risk and make mistakes. But, we shrug it off and move onto the next trade.
LIVE TRADES:
First, on 6/25/08, we recommended to SHORT CHF / NOK at 4.9800, currently it is trading at 4.9600, and have been paid over a months' worth of interest. This trade's fundamentals are still in tact and we will remain SHORT for the coming months. We may even add to this position if CHF / NOK climbs higher.
Second, on 7/14/08, we recommended to SHORT AUD / USD at 0.9735, currently it is trading at 0.9570. We are still looking for 400 plus pips on this trade with a Stop Loss at 0.9960, but we do believe in not giving back gains. So, we will closely monitor this trade in the coming week, especially on 7/30/08 because Australia is releasing their Retail Sales and Trade Balance.
Third, on 7/23/08, we recommeded to SHORT GBP / USD at 2.0020, currently it is trading at 1.9910, and we are sticking to our Take Profit at 1.9720. We are also keeping the Stop Loss in place at 2.0170. We believe the GBP is way over due for a major fall.
So, all three of our live trade recommendations are well in the money, but in this current market, anything can happen. We will update or even recommend more trades as we see fit.
Finally, BBFX has had another interview on FOREXTV. The following link will show the video and other thoughts and ideas that we have for the current market.
Forex Video News - Forex TV
Enjoy the weekend.