Well unfortunately, very little positive to report. It has been a terrible day. For a start after the RBNZ cut rates in line with our expectations, the NZDUSD fell as suspected, missed our TP by 9 pips and then jumped 190 pips in the other direction, so that was a disaster in all honesty.
As the day progressed, it looked like we were recovering, especially after the Dovish comments from the SNB about being ready to intervene to devalue the “overvalued franc”. Our GBPCHF buy reached 1.5041, recovering from its 1.4820 lows and our USDJPY buy was in the green. This recovery was very short lived and another flash commodity crash caused haven bids for the JPY and CHF which essentially reversed all recovery and plunged these trades deep into the red. Of greater concern is that these falling commodity prices are now problematic and may cause the FED to delay liftoff on Thursday, in effect changing our fundamental outlook completely. While it is still likely that the FED will lift off, every day that commodities crash more, it increases the likelihood of a delay.
As this point, I usually say we have to be patient, but it literally seems that everything has gone wrong this month. Be it Russia and Turkey having “issues” to put it politely, Draghi delivering less than anticipated, Chinese growth concerns and a massive fall in commodity prices. At this point, I have to say that I feel it is almost certain that we will miss our 20% target this month and while we will continue to try our best, we may even finish the year on a red month. What really upsets me is that for the last two weeks, rather than delivering results, I just give explanations, which is not very productive. We want wealth generation, not excuses.
The only positive I can think of is that it is highly likely that market sentiment turns to USD bid before the end of the week or early next week Pre-FOMC meeting to give us some relief from our red positions and that the account remains safe. However unfortunately, there are no other positives to report at this point. Sorry that I am unable to give you all better news.
Lets try to stay positive and just see how we can best emerge from this,