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Trade of the Month


Guest DanC

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Guest ChrisW

trading the ECB meet is more risky than the FOMC these days, which is intresting as we have the Fed meet next week.

 

GBP/USD seems to be happy trading in 1.44 to 1.4000 range (since early March)...5,20 day MA all moving sideways, which is usually a sign we want to trade Bollinger bands, especially with RSI mid-range. Its really tough to be long GBP given the EU referendum but no doubt the pound is very cheap. Timing as always is key.

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Interesting insight Chris on trading the ECB v Fed.

 

The pound is cheap - what will happen after the Brexit vote???  Or the day before say...  timing is the key like you said.  It seems a good buy to me sometime pre-vote. 

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Guest ChrisW

Perhaps but polls are just so hard to call if accruate... gut tells me they stay (just going off bookies) and pound is buy but timing as I say is key... we tend not to hold FX positions for a month or two.

 

Still I quite like selling EUR/GBP as trend down and think Draghi opened the door for further rate cuts...yesterdays candle printed a doji, so lets see who wins this battle

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I'm Bearish on EURGBP as well, although I am expecting a relief rally on this cross in the near future before a strong plunge.  I am expecting a major plunge on the EURUSD and GBPUSD also.  I believe Brexit is a sideshow and a distraction, it's all about the USD strength for me.  Brexit is too small an issue on the World stage and anyway why would it have any impact whatsoever?  No one has come up with anything that makes sense on that score, just fear mongering political manoeuvring.  Cue a damp squib!

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Guest ChrisW

Technically (well price action) I too like being long with a stop through 160. Still todays meeting (likely 14:30 AEST but could be an hour or so either side) is a huge event. 1-day implied volailty is the highest in years...the market expects a massive move

 

I say 'why wait'...go hard here as many data points that need a short sharp jolt. But they could easily disapoint and JPY rallies hard. The prosepct of slippage is high as the move could be violent. I hope they inc QE by Y20t, cut deposit rates by 20bp and offset by offering banks loans for free (and even pay them) and we could see more ETF/JGB buying

 

My instint says reduce exposure but put a gun to my head and I feel JPY crosses go higher (JPY weakness)

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That was amazing!  I couldn't get in - market moved too fast.  Hmm! 

 

Chris was right about the volatility being at it's highest.  Yet 2200 for the Yen.  In like 3 seconds.  Amazing.  Nikkei - 600 from +250. 

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  • 2 months later...

Hi everyone,

 

I think Shorting cable will be the trade of the year even it looks like maybe too late or too early.

 

Fundamentals:

UK rate cut and QE are high likely, US rate hike possibility in 6 months, there are huge uncertainty about UK economy and politics at least for a year, Brexit talks will be hard and painful (no bank passport rights or single market without free movement, no EUR clearing business in London for sure), all respected economists, investment banks and traders forecast year end cable around 1.20 (even some says 1.10), I think in this environment no one can dare to go Long on Cable for a day...

 

Technical:

I thinks Brexit clear out all elliot counts and general trading strategies. When we look at the first fibo from 1.48 and second fibo from 1.33, I don't think cable can pass 1.33 in this economic environment. When we take into account trend line coming from 1.35 together with second fibo 61.8% line, I think there is a very strong resistance at 1.31 on 4 hours chart. Also, we have a bearish triangle with trend line and bottom 1.28 line, which I think it will be broken down.

 

I am thinking to short and hold it all the way until 1.20. I will open total 500K short position and stop at -20K (4%)

My worst case scenario 1.35 and I will try to catch 1.32 average if there is a rally while opening positions at 1.30-31-32-33-34-35.

 

I need your expertise for timing. What do you think about timing, my plan and entry levels ?

 

I miss shorting the Crude opportunity and don't want to miss this one:)

Cheers!

 



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