Trade Update (15-Nov)

We were stopped out of the short EUR/USD trade on Monday.

Our profit target was reached on short AUD/USD after the wages data on Tuesday.

We remain short GBP and NZD.



Short half unit NZD/USD at 0.6901; s/l 0.7018; t/p 0/6685

Short half unit GBP/USD at 1.3114; s/l 13223; t/p 1.2805



I am not unhappy to be out of the AUD short ahead of the employment data today.  Employment data globally have tended to beat expectations.  The Australian vacancy data continues to grow at a steady and solid rate and NAB business survey employment component has been stable recently at a solid level.

However, we may look to sell AUD again.  Growth and market indicators from China suggest some tightening in financial conditions and softening demand.

A concern in our positions is the weak performance in the USD.  It has received a reprieve from firmer than expected CPI and retail sales data, but it does not feel like the USD wants to go up.  It may be in the process of a making a longer-term top, it may be that uncertainty around the stability of government and the significant changes underway at the Fed are undermining confidence in the sustainability of a US economic recovery.  The Fed appears soon to be devoid of quality leadership capable of controlling disparate Fed President voices.  When faced with doubts they may choose to leave rates unchanged or cut again.  The strongest voices that appear to remain (including Brainard and Kashkari) are strong advocates of fewer hikes.

GBP has performed well in light of the softer than expected CPI and employment data this week.  The political risk concerns have not played out as negatively as I thought they might.  Reports I have been reading suggest that analysts are still seeing good odds of progress into year-end in Brexit negotiations.  My position is small, and stop loss is conservative.

In considering selling AUD, I am thinking of an alternative proxy than the USD.  However,  I am struggling to see the case for any alternative currency at the moment.  I may revert to Gold.  However, gold does not appear to be doing as well as it should in an environment where the USD is struggling, and the market is in a bit of a risk-off mode.

Overall conviction remains low.

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Greg Gibbs,
Founder, Analyst and PM
Amplifying Global FX Capital Pty Ltd