Dollar interest over the rest of the year

forker

Well-known member
Jul 12, 2008
2,688
499
93
#1
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
 
Likes: Atilla

forker

Well-known member
Jul 12, 2008
2,688
499
93
#2
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.
 

forker

Well-known member
Jul 12, 2008
2,688
499
93
#3
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.
 

forker

Well-known member
Jul 12, 2008
2,688
499
93
#4
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)
 

forker

Well-known member
Jul 12, 2008
2,688
499
93
#5
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.
 

forker

Well-known member
Jul 12, 2008
2,688
499
93
#8
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.
 

forker

Well-known member
Jul 12, 2008
2,688
499
93
#9
trade is up over 700 pips (entered multiple additional trades on pullbacks including yesterday morning post Trump results.
 

forker

Well-known member
Jul 12, 2008
2,688
499
93
#10
107 is the area i start tapering the position down removing half. I really want to target 109-110 as the final destination
 

gerryg

Active member
Sep 9, 2013
915
8
28
#13
Watching this thread since Mid-September, awesome job, forker. Btw what is your risk setup, I mean risk per trade, lot size, etc.?
thanks.
 

Atilla

Well-known member
Nov 15, 2006
18,269
2,528
323
#15
Hope you've found some sanity and had a g1.

I'm getting cold feet over your super trade now. Well done and a great call!

fwiw - I'm easing off on the probability Fed will raise rates in Dec. :rolleyes:


(y)