So.. where are our positions today? Woke up today to the unpleasant surprise of our profit having dropped quite a bit. Gbp/jpy retracted some 300 pips from it's high water mark. Eur/usd about 80 pips, Gbp/usd about 125 pips and Usd/chf some 60 pips. Some of our metrics used to signal a trade have slipped a little, but Gbp/jpy I still have as a strong sell.
Let us look at what could have moved these positions. In the Usd, housing starts were released weaker than the previous month -1.63% 1.045mil down to 1.028 mil. Housing permits dropped from 1.092mil down to 1.035mil, a drop of -5.22%. Looking over charts, the real momentum seems to have come from U.K. consumer price index data -0.23% month to month, which tracks the cost of living and came out positive for them. Along with that, the zew economic sentiment index that surveys 350 economists and analyst was released for both Germany and the Euro zone. This too came out stronger than previously, strengthening the pound against Yen and Usd. Which in turn did not help our Usd held against the Swiss Franc.
Over all I still feel positive about our positions, the pairs moved alot, enough to vent any volatility before the Financial Management Oversight Committee tomorrow. I have a gut feeling that the Usd is going to get stronger through the rest of the week no matter the outcome of interest rates. Not that I ever trade on my gut feeling, but the pairs did move as expected and has already retracted/ soaking up any trading that was going to happen against our high water mark.
Ultimately time will tell. Have a good day -Pablo
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