USDJPY is at 109.30 while the USD index - DXY is at 91.21 as a result that 10-Treasury is at 3.02 +2.37% in the US trading session. Corrective moves are expected within the US session but are limited to a tight range. The over-crowded USD Put options market have started to unwind positions when the USD index traded above the 90.70 levels.
Meanwhile, DXM18 Futures contract below is trailing behind; trading at 90.98 indicates a backwardation that still prevails and makes adjustments moving closer as the expected interest rate hike schedule spread for the year is in the making. This would provide the necessary trading cycle for the USD to move higher. Although, any corrective move on the 10 Year Bond below the 3.00 level may well see the same narrative correction before any continuation occurs.
As we may see some unwinding trade positions once the COT report on the USD comes into play in the coming weeks. Likewise the increase in relative volume in futures / options markets tend to increase but the difference can only be seen when the final COT reports reflects the true data thereafter.
And above these levels is positive with the exception that stocks would be affected to wards a corrective move. The important closing price for the week would be well anticipated as it would provide a more clear direction moving into the new month of May.
While other currencies affected with a stronger USD are the USDCHF at 0.9843, with the European majors weakness due to unwinding trade positions; as the GBPUSD is trading lower at 1.3935, EURUSD at 1.2172. The commodity currencies like the AUDUSD have fallen trading at 0.7563 while the USDCAD / Loonie is at 1.2873 respectively.
Sequence of Related Trades:
Besides we may see some interesting movers and shakers in Asia particularly in the YEN and the NK225; as the Futures NKDM2018 is at 22220 +125 up = +0.57%. Triple digits would hold for as long as volumes are present.
ReplyDeleteWe know that the complexity of these trades are quite expensive to take. However, whenever we are right on the market call, we do capitalize the effectiveness of the market call and their corresponding market potential. Maximizing the profitability that the market offers and presents should well be considered. Volatility can be good for those who wait patiently when the time comes.
ReplyDeleteAfter the market call, as of 4.26.18; NK225 up +125.52 at 22338.89 as of this writing a +0.56% move and can still get better. While the USDJPY is steady at 109.35 with a high at 109.47.
ReplyDeleteThe USD DXY at 91.47 high continues its move even with a corrective move on 10 Treasuries slightly below the 3% threshold. It's a sight to see both the USD and DOW Equities moving in the same direction.
ReplyDeleteMeanwhile, the USDJPY holds steady at 109.27 while the EURO is below the key price level of 1.2180 currently trading at 1.2118. With CABLE at 1.3939, USDCHF at 0.9875 from the past 10 consecutive weeks high along with the GBPCHF training behind for the past 8th week trading at 1.3777.
Not to mention, that the AUSSIE has had only three corrective moves out of 13 weeks on the decline and is at 0.7552 in the intra day trade of the US session.
The Law of Total Probability in the FX Market
ReplyDeleteAt times the Law of Probability do apply, knowing 'how to' is equally as important as to knowing 'when to' use the application in certain market conditions.
Being able to fundamentally relate marginal and conditional probabilities are essential to the equation; as market conditions changes at the same time that prices do. The process to achieve a higher degree of probability in projecting price accuracy can only be achieve by a method that we have developed at MegaTrade101 called as the 'CIPHER3' Analysis.