Well the markets opened very softly today with both Japanese and Chinese equity markets closing negatively. It seems that the risk aversion mode is still lingering in the minds of investors, although much more gently than last week, possibly eased by last weeks US employment data. I have thought a little more about this one and think that this is what has supported the USD today. It is entirely possible that with Chinese inflation due to be released over the weekend that traders did not want to go into the weekend holding positions (this to me would explain the spike and sell off that occurred on Friday). Reading the CFTC we can see that people turned bullish on the JPY overall for the first time since 2012 last week (the overall positions are 4k net long) which indicates that risk appetite is yet to return to the market. In short the first trading week has left many people rattled.
Anyway back to today’s events:
The JPY has softened for the first time in 5 days. I see this as a direct result of the USDJPY pair movements. This morning it fell to 116.70 (as soon as Asia opened, despite Japan being on holiday) and then quickly wiped out all its losses and currently trades at 117.85. This happening despite commodities and equities not performing particularly well indicates the following things to me:
1.) It reached a vital support and was bought.
2.) People have begun profit taking on the JPY after it gained for 5 consecutive trading days last week.
3.) Once risk aversion passes, the JPY will weaken as quickly as it strengthened.
With regards to accounts:
Still deeply in the red, but significantly less so after all positions wiped out a few hundred pips of losses today. However, the situation is still dire.
Situation is nowhere near as Bad as Etoro. With unrealised losses being only 4% of account equity at the moment.
USDCHF trade was entered after yesterdays trade idea and is currently profitable. It has its SL in profit just in case recoil should effect us.
EURGBP sell is now only 40 pips in the red and headed in the right direction. It’s SL will be moved to profit at the earliest opportunity.
USDJPY buys are now 100 pips in the red and look to be headed in the right direction, technically and fundamentally (if the market can close above 118 today).
I did some one month calls for pairs I believe will strengthen to limit my exposure just in case. Came within 40 pips today of getting wiped on Saxo bank (for a VERY large amount) and literally nothing more than luck saved me. Will try to execute more options with longer expiry times to take advantage of pairs that have been forced to extremes due to the equity collapse of last week and risk aversion in the market.
Let us hope that the rest of the week continues much in the same way as today, and it will be a much happier one for us,
P.s. Thanks for the kind comments from all of you who are still reading. It really did cheer me up. <3