Cross Trading SPOT & FUTURES as an Alternative Strategy

The US NFP figures was the main catalyst for the currency market's volatility that led a substantial price recovery for #CABLE, #EURO and the Japanese #YEN. As mentioned, the 'healthy' declines were a preemptive signal that there was something the market place were brewing heading towards the JOBS data last Friday.

Understanding the practical way of 'Cross Trading' SPOT & FUTURES may well be an alternate strategy that needs to have a deeper analysis for a tactical investor / trader. Although, the JOBS figure were a fundamental in nature, the price swing on CABLE were quite encouraging as it marked a high @1.4580 with a  pullback again @1.4370 seen at the Monday Asian session. The similarity of price movements across the board is expected after a dramatic price swing after the Labor department's surprise data.

With that said, the spread between alternating US Dollar Futures contracts shows the resiliency of #DXU16 (Jun) compared with #DXZ16 (Dec) as a spread that  range led the market into a decline, as the FED's June hikes would be pushed out towards July. Uncertainty has again prevailed, as the market awaits for FED Chair Janet Yellen comments this week.

Meanwhile, the SP500 remains at the higher band of the range with the  #SPY also remained steady. The obvious higher volumes last Friday would serve as the initial support for a price recovery with the position adjustments derived from the rapid post NFP price decline that led the European majors to simply react from such rapid action.

Remaining EURO & CABLE Short-positions caught at the low band of the previous decline had to struggle ahead of the USD decline which has been led by them rather than a USD related move. This can be seen with the figures in the COT Volume & Open Interest report post NFP #'s. However, it still remains that price swings would be confined within a wide trading range for the coming days leading towards Janet Yellen.