Johanes

JLS Trade: Long and Short USDCAD, NZDUSD, AUDUSD and EURUSD

FX:EURUSD   Euro / U.S. Dollar
The EURUSD on hold at 1.1200 as expected and the CHF and JPY carrying and re-carrying the USD, CAD, NZD, AUD, EUR (GBP will be carried later). By interest rate differentials, the USDCAD to upward ceiling and the NZDUSD , AUDUSD , GBPUSD and EURUSD to downward ceilings, however the current carrying and re-carrying to hold those pairs to be fluctuated interior their lower states of their medium term target zones. This results the opportunity to long and to short those pairs interior their current zones.

Long and short of those pairs interior their current zones (hedging trading) could be profitable by holding the long to the upper levels and to hold the short to the lower levels of their "interdays" or weekly and monthly levels. However, those pairs will not break their upper ceilings and lower ceilings for USDCAD .

I long and short on USDCAD , NZDUSD , AUDUSD , EURUSD and GBPUSD for capital accumulation.

The LONG on JPY-pegged pairs, the SHORT on EUR-pegged pairs and the SHORT and LONG on major pairs (excluding USDJPY and USDCHF ) result the portfolios to be "mutually hedged and re-hedged" by their volatility "interior their target zones" to allow the trading operation to be managed at "highly leverage ratios" up to 80x to look for higher return (in commercial operation).
Mar 09
Comment: Economic activity is seen expanding at a solid pace, albeit somewhat slower than in 2018, and the job market is expected to remain strong. Recent declines in energy prices will likely push headline inflation further below the FOMC longer-run goal of 2% for a time, Fed Chair Powell said in his Semiannual Monetary Policy Report to the Congress. Fed Chair added that over the past few months some crosscurrents and conflicting signals were observed. Financial markets became more volatile and financial conditions are now less supportive of growth. Growth has slowed in some major foreign economies, particularly China and Europe. And uncertainty is elevated around several unresolved government policy issues, including Brexit and ongoing trade negotiations. The Fed held the target range for the federal funds rate at 2.25-2.5% on January 30th 2019.
Mar 09
Comment: Fed Policymakers Unsure on Future Rate Hikes: Minutes
Many Fed officials suggested that it was not yet clear what adjustments to the target range for the federal funds rate may be appropriate later this year, minutes of the January meeting showed. Policymakers also noted that some risks to the downside had increased and pledged to end reductions to its balance sheet before the end of 2019.

Almost all participants thought that it would be desirable to announce before too long a plan to stop reducing the Federal Reserve's asset holdings later this year.

Participants noted that some risks to the downside had increased, including the possibilities of a sharper-than-expected slowdown in global economic growth, particularly in China and Europe, a rapid waning of fiscal policy stimulus, or a further tightening of financial market conditions. An increase in some foreign and domestic government policy uncertainties, including those associated with Brexit, an escalation in international trade policy tensions, and the potential for additional extended federal government shutdowns were also cited as downside risks.

Many participants suggested that it was not yet clear what adjustments to the target range for the federal funds rate may be appropriate later this year; several of these participants argued that rate increases might prove necessary only if inflation outcomes were higher than in their baseline outlook. Several other participants indicated that, if the economy evolved as they expected, they would view it as appropriate to raise the target range for the federal funds rate later this year.
Mar 14
Comment: JPY carry traders are pausing to wait central banks' refining policy and interest rate directional policy at current economic slowdown globally as provoked by the IMF and the global central banks. Global investors also refining their investment portfolios to assure profit booking for their shareholders' dividend.

No sign of unwinding by the carry traders yet, but pauses may take sometime before resuming to carry. This will result the resuming of major pairs to downward ( NZDUSD , AUDUSD , GBPUSD , EURUSD ) and to upward ( USDCAD ) as their interest rate differentials' price trends. However at mixed performance of price fluctuation.

GBP-pegged pairs could be in harmony on pressuring the positive interest rate differential pairs ( GBPCHF , GBPJPY and GBPEUR ) to downward (note EURGBP to upward) and supportive to pressure the negative interest rate differential pairs ( GBPUSD , GBPNZD , GBPAUD and GBPCAD ) to downward. Thus, at current market environment, the GBP-pairs in play.
Your main idea is to short the euro, to the level of 1.11 and 1.10, did I understand you correctly?
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Hello, friend, please tell me the euro to what level are you waiting for the correction?
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Johanes Vilena
@Vilena, The EURUSD could be corrected to 1.1550 and may up to upper ceiling 1.1800 by the EURJPY and EURCHF. The best way to trade EURUSD at current market environment is to long from the lower inderdays and to short from the upper interdays, wait the long position to upper level and the short position to lower level of their interdays or monthly levels whatever the tools you use to measure them.

The current measured target zone for EURUSD is 1.1800-1.0800 and by interest rate differential the pair is underway from the 1.1800 to 1.0800, however the current carrying on EUR by theh CHF and the JPY will depend the weakening of EUR to USD and to put this pair to sideways interior the current monthly bands/ceilings. This environment is good for high frequency buy for profit and sell for profit. Using hedging trading approach, risk is limited and overnigh rollover fees to off-set the overnight rollover charges.
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Vilena Johanes
@Johanes, Thanks for the answer)
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