Short EUR vs. USD & JPY (20-Mar to 22-Mar); FOMC comment
stopped out of EUR/USD in post FOMC spike 21/22 Mar
Real-Time AmpGFX – Orders and thoughts post FOMC (Wed 3/21/2018 2:12 PM MT)
See my Quick Take on the FOMC sent via a separate email and link below.
https://ampgfxcapital.com/reports/fomc-quicktake-upgrade-forecasts-sets-suck-see-tone/
The FOMC forecasts, I thought, should have supported the USD, so its fall is surprising.
But I suppose the forecasts are not too far from what most would have expected, and the USD has reacted in a manner that has mainly just pushed it back into recent ranges.
Powell gave a straight down the line press conference, dealing with questions in a manner that should have not directed a bias one way of another, staying away from criticizing tariffs or fiscal policy, and indeed generally praising the the tax cuts as potentially boosting productivity, even if this is hardly reflected in the FOMC projections.
If there was a dovish tilt, it was that Powell emphasized the uncertainty in the forecasts and suggested the Fed will respond to events/data as they unfold. Since actual inflation and wages growth are modest, this gives the market reason to pay less attention to the upgraded forecasts.
I have been caught out this month by the choppy directionless nature of the FX market, and accept that this may happen again.
I have just marginally raised the s/l on my short EUR position.
Positions
Short half unit EUR/USD at 1.2284; s/l 1.2367; t/p 1.2028
Short half unit EUR/USD at 1.2252; s/l 1.2367; t/p 1.2028
Real-Time AmpGFX – bought EUR/JPY to close short position (Wed 3/21/2018 12:40 PM MT)
Bought half unit of EUR/JPY at 131.03 to close short position
The positive response in US equities and yields to FOMC poses upside risk for EUR/JPY
Positions
Short half unit EUR/USD at 1.2284; s/l 1.2363; t/p 1.2028
Short half unit EUR/USD at 1.2252
Real-Time AmpGFX – sold EUR/USD to add to short (Wed 3/21/2018 12:08 PM MT)
Sold half unit of EUR/USD at 1.2252 to add to short position after the FOMC rate decision
Initial take is that the statement should validate the higher trend in US yields
Positions
Short half unit EUR/USD at 1.2284; s/l 1.2363; t/p 1.2028
Short half unit EUR/USD at 1.2252
Short half unit EUR/JPY at 130.77; s/l 131.83; t/p 126.28
Real-Time AmpGFX – comment on trades earlier today (Tue 3/20/2018 6:20 PM MT)
On Tuesday, I was stopped out, around flat from a short EUR/JPY position.
A bit annoying as this trade was well in the money on Friday/Monday.
I should have lowered the stop loss to protect gains, but didn’t feel the urgency to do so with negative news on Abe coming from the weekend and political risk in the US also likely to keep the USD/JPY weak.
By the time I looked at it, on my Monday morning, EUR/JPY was already in the high 130s, so I thought my stop loss in the 131.30s was then still appropriate.
However, the USD/JPY bounced further and EUR found support from a Reuters story on ECB ending QE this year.
I thought the ECB news on QE should be faded, especially since the comments from ECB sources were emphasizing keeping rates low.
I remain bearish on EUR, and this was reinforced by the weak ZEW survey.
The USD has so far shrugged off the McCabe/Trump/Mueller risk from the weekend.
The FOMC is likely to sound up-beat judging by recent survey data and strong employment indicators.
I discuss several reasons to be short EUR is recent reports, including the AmpGFX report today – falling inflation expectations, weaker surveys, dovish tilt from ECB, lower real and nominal, long and short spreads.
https://ampgfxcapital.com/reports/usd-shrugging-off-political-risk-aud-headwinds-eur-cracks/
Broad market sentiment generally remains bullish EUR and bearish USD. However, the USD is now starting to firm up since its lows January, and EUR is again testing recent lows.
As such, I decided to enter a short EUR position, and re-enter the short EUR/JPY position earlier today.
Rising US yields may boost EUR/JPY, via a bigger impact on USD/JPY. However, Abe’s political scandal still hanging around. The USD/JPY has been less responsive to higher US yields. Tariff risks and choppy equity markets may keep market seeking a haven in JPY.
Perhaps the approaching FY end in Japan is something, but hard to see any consistent seasonality in JPY.
Position size still modest given the choppy and erratic price action.
Positions
Short half unit EUR/USD at 1.2284; s/l 1.2363; t/p 1.2028
Short half unit EUR/JPY at 130.77; s/l 131.83; t/p 126.28
Real-Time AmpGFX sold EUR vs USD and JPY (Tue 3/20/2018 7:04 AM MT)
Sold half unit EUR/USD at 1.2284
Sold half unit EUR/JPY at 130.77
Positions
Short half unit EUR/USD at 1.2284
Short half unit EUR/JPY at 130.77
Comments and orders to follow