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*Good morning/afternoon everyone!*
We’re late with this note (all trades were posted on slack) because we were preparing to live trade the Bank of England rate decision but now that the first leg of movement has occurred – we have a few minutes to share our thoughts.
The U.S. dollar is trading higher against all of the major currencies this morning (with the exception of GBP which popped on the BoE’s upgraded growth forecast and their comment that rates could rise faster and earlier than they anticipated in November – which is an overwhelmingly positive comment. Stock futures are pointing to a lower open but the decline so far appears modest so USD/JPY is attempting to bottom and we think other yen crosses will as well (which is why we are long EURJPY). USD/CAD is also meeting resistance and we have chosen to buy the Canadian dollar vs. the Swiss Franc although USDCAD itself looks like an attractive sell. AUD and NZD are weak and likely to fall further but AUD is deep in its decline whereas NZD is just beginning to catch up, making AUD/NZD an attractive long trade. EUR is neither here nor there. Its benefitting from GBP strength but also held back by USD gains.
*The MAIN THEMES I see today are*
+GBP (post BoE)
+USD, +GBP, +CAD
-NZD, -JPY, -CHF, -AUD
*Today’s Initial Trades*
1. Buy CADCHF at .7509, Stop at .7481, Target .7537
2. Buy EURJPY at 134.24, Stop at 133.96, Target 134.52
3. Buy AUDNZD at 1.0826, Stop at 1.0798, Target 1.0854
Close ALL open day trades by 10:20AM NY / 15:20 GMT