Dollar interest over the rest of the year

This is a discussion on Dollar interest over the rest of the year within the Discretionary Trading forums, part of the Methods category; For the last 3 months I have been following the USA economy closely in anticipation for recovery. The fed have ...

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Old Aug 29, 2016, 6:48pm   #1
Joined Jul 2008
Dollar interest over the rest of the year

For the last 3 months I have been following the USA economy closely in anticipation for recovery. The fed have disappointed markets with its hawkish stance without any meat on the bone. With usd being sold off a lot over the months as a result of rate hike disappointments, I came to the conclusion that it was oversold in context of the data points.
Japan has been delivering continuous disappointments with its data all while the currency has been subject to safe haven flows. The yen is one of those currencies that doesn't play nice with data points and the central bank is losing its credibility and ability to direct markets. The divergence of the US and Japanese economies in context to the usdjpy has opened up an opportunity. In early August I opened a series of bets, easing myself into a longer term position for the dollar to gain against the yen. The latest fed meeting and subsequent comments from Japan are the turning points in my opinion to set the scene for the dollar for the rest of the year.i am looking to take up to 1000 pips with possibly more on the table to offer (will likely lock in and see if I can squeeze more). Interest rate differentials is giving me a small rollover bonus every night.

Anyways, just thought I'd share a longer term trade with everyone.

My gradual entry into this position is:

101.11
100.50
100
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Old Sep 3, 2016, 9:24am   #2
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forker started this thread Job numbers yesterday was below the low estimate but I should point out that August is historically a low month for job numbers. Still bullish on the pair and closed a portion of the trade with a view to get back in on that portion on pullbacks.
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Old Sep 13, 2016, 6:26pm   #3
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forker started this thread Article out tonight that the BOJ are considering deeper negative rates. Extension of their program was always a matter of when not if and this news, if proven to be true, will serve this trade well.
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Old Sep 22, 2016, 9:40am   #4
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forker started this thread New buy opportunity. I have opened new trades into this position. All yen moves have been speculative and fundamentally the economy is overvalued with data points being far less hawkish than the US economy. Just an FYI to anyone following this. The position I am holding is medium term (3 to 8 months)
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Old Oct 6, 2016, 8:04pm   #5
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forker started this thread update:

Trade is on track and USA data is coming supportive of a rate hike. As i see it the trade is roughly half way to my target zone. So long as the data continues on this path then the trade should get there in the next 2-3 months.
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Old Oct 27, 2016, 4:48pm   #6
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forker started this thread position has reached the halfway mark. I will start tapering the position when it reaches 107
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Old Oct 30, 2016, 9:34pm   #7
 
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Originally Posted by forker View Post
position has reached the halfway mark. I will start tapering the position when it reaches 107
fwiw - if Fed raises rates I see it testing 108-110s
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Old Oct 30, 2016, 10:13pm   #8
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forker started this thread Hopefully. My only concern is the uncertainty around the elections and how that tends to drive yen. I think JP Morgan recently came out saying they believed 108 was on the cards.

Momentum in the USA has definitely been picking up since April and the most recent data is supporting a trend.
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