Forex rebates on every trade - win or lose!

Closed the dodgy short for 10. Off for a couple of Scotch waters !!

Still feeling verdant, ten four?

I prefer bileous - if I could spell it!

Currently short from 182 - which was looking a bit scary until a couple of minutes ago. Premature chart analysis - makes a mess on the carpet.

So does leapfrogging, depending on the pile you've got.

D'you get the feeling this is it until the numbers are out later...if you want soporific, watch Euro :S

Agreed - just the kinda day where mistakes are made because of boredom. I've pulled my short for 5 points ;( Was it worth it?

Phew - that was good timing!!

Oh it was - makes up for the 5 you were down the other day :)

Very dangerous because I'm bored - long from 158

I don't believe it...the best I got was 162 :)

Oh goodie - fins have gone down :S

out at 171 :)

Out @ 175

185 was tempting then, but I didn't do it.
Hohum, back to work then

I missed it as well. Have to go out around the 13:30 news so probably best if I leave it until I get back. Pick the right direction and BINGO, pick the wrong one and Disaster. A bit McCawber like.

Pip, pip

Published: Jun. 03 2005, 12:09 GMT
Nonfarm Payrolls trading scenarios
EURUSD, option strategy and stocks


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EURUSD
The French and Dutch rejections of the EU constitution translated into a heavy EURUSD sell-off. But was it enough? The EUR is still weak and longs are fearful in this environment. Today, comments from the Italian welfare minister about a return to Lira, immediately resulted in a sell-off of 60 pips. Such an event is not exactly indicative of a strong market structure.

All in all, the economic data for the Euro-Zone has been horrible for several quarters. With the European Union coming apart and the market getting used to lukewarm but non-catastrophic data from the US, it now seems the fall of the EU treaty has just been the straw that broke the back on the EURUSD camel. The market has been long EUR for primarily two reasons: 1) The currency is big and liquid, and 2) it is not the USD.

We are now entering a theme, where these two reasons are no longer enough for being long EUR. The theme is new and not manifested in the markets. And now to the point: The number of non-farm payrolls created still matters, but if the number comes out today as expected, it would leave the market with no other things to think about than the Dutch and French no’s and the rapid disintegration of the political future of Europe. A clear sell to me – the EUR has a neutral non-farm payroll number against it. From the recent price action some likely scenarios would be the following.

NFP < 130
EURUSD + 50 pips

130 < NFP < 175
EURUSD unchanged

175 < NFP < 225
EURUSD -70 pips.

225 < NFP
EURUSD -150 pips.



EURUSD option
Today's US unemployment figures and the uncertainty of the future of the EUR certainly dictates tension and a further volatility in spot. The break of 1.2150 on the downside translates into a further erosion of spot. However a break above 1.2350 will acts as a short term stabilizer and the EUR may gain further momentum on short covering. We advise clients to use options for a directional move with a limited risk.

Option Cont. Looking to go short EUR and gain on the momentum if spot breaks 1.2150. Buy a 1.2150 EUR Put one-week expiry, 10 June. Premium cost 35 USD pips. As an aggressive position one might sell the 1.2350 EUR Call. One week expiry as well, 10 June. premium produced 35 USD Pips. Hence one goes short EURUSD via the EUR Put at a flat premium but with a risk above 1.2350 as one is short from this level on the day of expiry. Ask for further advise over the dealer on a risk management side of this combination.


Stock markets
The stock market environment is a big mystery when trying to predict a move on the non-farm payroll numbers today. Inflation fears have been very much on the agenda for investors to take into account in their strategies. When the market is leaning more towards a FED-rate at 3.75% year end, than 4% a month or so back, it seems like part of the rally seen of late in the US is explained by inflation fears cooling off. A stronger than expected non-farm number could trigger those fears again and hike the year-end interest rate expectations. That would be bad for stocks, but the stronger number would at the same time tell us that the US economy is picking up speed. A weak number should confirm interest rate expectations at a lower level, but on the other hand indicate that the economy is not doing so well. All in all we believe investors will be looking at oil and steel prices and how the USD is doing towards mainly the Euro and the Yen with more interest for inflation signs and look at the non-farm numbers as a pure indicator for how the economy is doing.

Jeff,

You're currently seeing a scenario whereby there is little prospect of good news coming from any one currency to drive that particular currency up. The likelihood is instead weighted more towards bad news driving a particular currency down which will therefore push the other side of a pair up.

The Nip economy is totally stuffed (zero rate finance does not promote growth), the Yanks have got big, big problems (the twin deficits have not gone away and they've just started the driving season with crude surging upwards to retest the highs), the Euro is a non-starter and the markets are now pricing in the likelihood of it not being here in 5 years and sterling is yet to suffer the ill effects of Boney Liar and Gordon the Haggis reaping what they've sown.

That sentiment is evidenced by the reaction to the payroll data ...... the news wasn't good, so the first instinct was to sell the Dollar. But what do you buy instead as everything else is also knackered? There are currently no buyers to provide any sustainable momentum, hence the whipsaw effect.

Hil:

Thanks for those cheering words. Do you really think the Euro could go away? How the heck would they extricate themselves from it?

D.

D,

I'm a regular harbinger of doom and gloom. My friends call me Jonah (as well as Manky Shins).

:o)

I think that you'll still see a Euro as it will be nigh on impossible to return to the former currencies, but a whole load of member states will have their own Euro (eg you'll see a Polish Euro and an Italian Euro, etc). Chirac is just about history. Schroder will be too soon. Fact is that it's not working and the dream-makers are now paying the price. Extending the Union to 25 member states should hopefully be the straw to break the camel's back. I wish they would hold a referendum in this country so that an overwhelming 80% NO vote would wake Boney Liar from his slumber and make him put the coffee on. Just my opinion.

PS Haven't forgotten the boots ...... just been a bit busy

Manky Shins (if I could be so bold)
Interesting thing I've noticed is that appeared (until recently) to be a relative correlation between the DOW and the currency - DOW UP, Currency UP.Now it appears to have shifted to DOW DOWN, Currency UP.

Any observations on that - my observervations have been cursory rather than scientific/rigorous so it may just be that I have noticed it whilst trading and there may be absolutely nothing in it. However, would be interesting to hear from a pro (in the nicest possible sense)

mg (I am Curious Yellow - and if that rings any bells you're older than I thought)