In a general sense, I may be long spot cable but be playing pullbacks on yen strength in the cross throughout the sessions. Because the cross is essentially synthetic, I look for short term opportunities in one, while holding a leg long or short. In my honest opinion, for example, being long the major sterling and short the cross just doesn't make sense...because ultimately the cross has to respond to major action and vice versa.

Just a quick question, are these usually done on a short term basis or do you hold the hedge for longer than a week (for example)?

Well, cable still looks pretty strong to me, so I'm still playing it from the bull side. Plenty of time to get on board if/when it turns.....
Break out of wedge, tight bol bands suggesting a momentum move ard the corner, macd CROSS, etc....
2.0106 is the sept 92 high, and to me that remains the big lvl on the topside.
Euro currently stalling at the 1.3668 lvl - the dec 04 high. If that goes (I think 3750 is on the cards), no reason for cable not to retest the recent high.

Attached Images

 

It depends, usualy these days it's only a short term trade, a year or so ago I found it easier as there was generaly a negative correlation between cable and GBPJPY in that GBPJPY would normaly go with the USDJPY side of the cross, so back then I wouuld often hold opposing positions for a week or more. That doesn't occur so much now if at all as everyone is intent on selling the Yen regardless, and USDJPY can get stuck at an importer/exporter interest level like the current 119.00/120.00

__________________
John G

Yes, i can understand the the desire, but not at these levels, Furhter upside must come from the backs of the shorts covering or there is too much absorbtion for the longs. Just think probabilities favour shorts, myself not playing here short or otherwise until prices come off, buying a break is my thinking at what level God only knows but volumes are geting thin right now, i see another small leg up before any conciderable correction of magnitude, which im quite sure will be bought hard.
Yet on the other side If euro is about to become major currency of the future, then pound must either decline to a parity with it to be enlisted within its strucutre, which i sure must happen further down the road. So much to speculate upon.

__________________
"perception is the measure of evolution"
"chance favors the prepared mind"

good point on the importer exporter levels...should be interesting what happens next week when those particular exporters are off on holiday.

What I have found though is the overwhelming relationship that still exists with the GBPJPY and USDJPY in the overnight. Seems like there still may be something there to trade.

good point....the market looks considerably thin considering the action that has been happening. volatilities are pretty low in both the major and sterling crosses...making conditions mature for short squeezes on itchy trigger fingered traders.

one thing, I don't understand how the pound would come to parity to fall within the structure...are you referring to a possible inclusion o fthe pound in the euro or the EURGBP cross pair?

I haven't actualy had a look at that, I will do so. thanks

__________________
John G

Richard sorry, i meant inception into the EU only seems rational to me to think this

__________________
"perception is the measure of evolution"
"chance favors the prepared mind"

As expected, the currency looks to break out in the intraday, probably making another move in the overnight.

Ultimately, speculative traders may be looking to potentially add to their positions at this point on a retrace.

Attached Images

 

any reason?

there's just an overwhelming sentiment that the UK will never want to be added to the current Eurozone roster.

Well i think its coming down to global consolidation, speculations of Ameridollar Mexico USA Canada joing seems like the path of nations

__________________
"perception is the measure of evolution"
"chance favors the prepared mind"

Any opinions?

Trading at 237.74, the GBPJPY has traded in relatively the same spot now for most of the New York session as the 238 psychological figure remains a formidable barrier. As a result, downside momentum is likely to ensue, backed by confirming momentum indicators. A stochastic death cross has already formed in line with a divergent MACD histogram. However, downside fences remain thick with the 237.58 (200 hMA) and 237.45 (100 hMA) figures looming just below. Should the aforementioned be taken out, sights will likely target the 237.00 psychological.

It seems the shake out upthrust 5-6 hrs ago was balance by its brother 2 hrs later with same magnitude, it hsould become interesting here pretty soon

Maybe a test of the hrly 236.88 lo which seemed to show good demand, 4hrs provides good demand around the 100 bar MA, maybe nobody home anymore. Not likely that nobodies home. EW wise looks like it could use a shot north to 238.30-40 area

There is no shortage of supply that is forcertain, think the LT carries are more than happy unloading into the rallies as the charts indicate

__________________
"perception is the measure of evolution"
"chance favors the prepared mind"

Morning all

Let's see if we get some decent movement today.

Still holding the cable option straddle and short on spot @ 2.0057 it needs to hold below 2.0074 today or else another 2.0130 test is likely and probably up to the 2.0230's imo

My downside target is 1.9940 looking for 1.9929/00 to hold the downside for a next possible move up, below 1.9900 and I think 1.9800 or lower is likely.

I'm getting hung out to dry on the Dow, I have a short june futures contract at 12,976 which is not looking too clever at the moment

Any other views on cable ?

Edit : apparently there is a UK clearer on the bid this morning, related to a GBP 2Bn dividend payment due in May so that could hold up any decline for a bit

__________________
John G