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1. FX Beat Inside View
Page 2 Market Recap, Treasuries,
Briefs, Institutional Positions
Page 3 Economic Data Preview,
Key events, Top News
Page 4 Fundamental Analysis
Page 5 Economy Watch, Trade
Views
Page 6 Individual Forecasts
Page 7 Currency Derivatives
Page 8 Trade Positions
Page 9 Technical Analysis
Page 10 Trade Idea
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● USD: Most investors received BoJ’s shock as too cautious to ever adopt such a
stimulus measure, sending dollar to an almost six-week high of 121.495 yen. It was
last up 1.7% at 120.87 yen. The greenback was up 0.4% against a basket of major
currencies at 98.885, though still down about 0.7% for the week.
● EUR/USD: The Euro has made a high of 1.0975 and started to fall from that level. It
was trading around 1.09197. The major resistance is around 1.1000 and break above
1.100 will take the pair to next level around 1.1060/1.1100 in short term. The minor
resistance is around 1.0950/1.0980. Overall bearish invalidation is only above
1.1000. On the lower side minor support is around 1.0870 (200 day HMA) and break
below targets 1.08200/1.07800.
● USD/JPY: The yen was on track to post its biggest daily drop against the dollar in
over a year after the BoJ shocked markets by adopting negative interest rates. The
pair has broken minor resistance 118.85 and jumped till 121.39 at the time of writing.
The short term trend is slightly bullish as long as support 119.90 holds. The major
support is around 119.90 and break below targets 119.50/119. On the higher side
minor resistance is around 121.50 and break above will take the pair till 122/122.80.
● GBP/USD: The Sterling turned negative against the euro and declined half a per-
cent against the dollar, with dealers citing a turn lower in oil prices and a month-end
rebalancing by some big institutional investors. It dropped to $1.4303 per dollar and
76.30 pence per euro. The major resistance is at 1.4420 (trend line joining 1.43626
and 1.4407) and support is at 1.4260 (trend line joining 1.4079 and 1.4170). The pair
has made a high of 1.4413 on the day and was trading around 1.43630. On the
higher side any break above 1.4420 will take the pair to the next level at around
1.4450/1.4500. The Cable is facing short term support around 1.4350 and break
below will take it further down till 1.4300/1.4270/1.4250 level.
● USD/CHF: The pair has broken major resistance 1.0170 and jumped till 1.02250
and was trading around 1.0200. The major resistance is at 1.0170 (trend line joining
1.01980 and 1.01894) and the short term trend is bullish as long as support 1.0140
(7 day EMA) holds. Any break below 1.0140 will drag the pair down till 1.0100/1.005.
On the higher side resistance is around 1.0225 and break above 1.0225 will take the
pair till 1.0255/1.0300/1.0335.
● AUD/USD: The Australian dollar held solid gains as the greenback took a knock
from soft economic news that trimmed expectations of an aggressive tightening by
the US Fed. It was firm at $0.7093, having rallied nearly 1 percent on Thursday. It
briefly popped back above 71 cents and was set to post a rise of 1.1 percent for the
week. It was trading around 0.7082 and the short term trend is slightly bullish as
long as support 0.7000 holds. On the higher side major resistance is around 0.7170
and break above targets 0.7250/0.7300. The pair’s minor support is around 0.7060
and break below will drag the pair till 0.7000/0.6920/0.6820.
● NZD/USD: The New Zealand dollar regained some lost ground to $0.6486. It had
dropped as low as $0.6419 on Thursday after the Reserve Bank of New Zealand said
it might have to cut rates again given inflation remained too low. It is set to end the
week where it started.
1
January 29th, 2016
www.econotimes.com

2. 2 www.econotimes.com
Market Recap
● World shares inched higher after the BoJ shocked
markets by adopting negative rates in big stimulus
effort.
● European stock markets were higher, with the pan
-European FTSEurofirst 300 index rose 1.2 percent
by 0930 GMT, having dropped 1.7pct on Thursday.
UK's FTSE climbed 0.9 pct, Germany's DAX was up
1.4 pct and France's CAC gained 1.5 pct in early
deals. While the MSCI world equity index rose half
a percent.
● Tokyo's Nikkei closed up 2.80 pct at 17,518.30,
Shanghai Composite Index ended up 3.1 percent at
2,737.60 points and China's CSI300 Index gained
3.2 pct at 2,946.09 points.
● Oil prices increased on Friday, on track to finish
the week sharply higher, on expectations of a deal
by major exporters to cut production to reduce the
massive over-supply that has sent prices tumbling.
Brent futures jumped over a quarter since hitting
an intra-day low of $27.10 per barrel on January.
20. Brent rose 18 cents to $34.07 a barrel by 1020
GMT, after closing up 79 cents, or 2.4pct on Thurs-
day. U.S. crude climbed 26 cents to $33.48 a barrel,
having settled up 92 cents, or 2.9pct, at $33.22 on
Thursday. While the U.S. crude is set to record al-
most 6 percent weekly gain.
● Gold steadied after recent gains to its highest
since Nov, and it is on track to end January with its
strongest monthly rise in a year. Spot gold was lit-
tle changed at $1,114.62 an ounce by 0630 GMT.
U.S. gold for Feb delivery was flat at $1,115 an
ounce.
Treasuries
● The yield on 10-year U.S. Treasuries fell 4bps to
1.95 percent.
● The yield on Japanese benchmark govt bonds fell
to record lows after the BoJ said it would charge
0.1pct for excess reserves parked with the institu-
tion, in the footsteps of ECB.
● Germany's 10-year Bund yield dropped 4bps to a
9-month low at 0.29 percent, while 2-year German
bond yields hit a fresh record low at minus 0.471
percent.
● JGBs rallied massively into uncharted territory af-
ter the unexpected BOJ rate cut, with 10-yr yields
were close to 0.10%, after the biggest session gains
since late 2008 and sharpest drop in yields for 13
years.
● UK Gilts opened 36 ticks higher than the settle-
ment of 119.45, as expected, as core markets re-
acted to the BoJ's shock of negative interest rates.
March Gilts stopped shy of new contract highs of
120.14, reaching a day high of 120.06. Lows on 10-
year cash are still intact, but only just with screens
last at 1.605%, against the January 20 low of
1.604%.
● Australian government bond futures climbed, with
the 3-year bond contract up 2 ticks at 98.100. The
10-year contract also inched 2 ticks higher at
97.3300, while the 20-year contract inched 1 tick
to 96.8150. New Zealand government bonds eased
at the short end and gained at the long end as the
yield curve flattened.
Market Briefs
● BOJ stuns markets with surprise move to negative
interest rates.
● USD/JPY initially jumps 2 pct, later trims gains.
118.38/121.49 range.
● Brent gives up 2.5% early gains and back to flat
into NY.
● Kuroda says move aims to forestall risks from oil,
China.
● Kuroda: Committed to do whatever it takes to
meet price target.
● BOJ: CB will cut interest rates further into nega-
tive territory if judged as necessary.
● EUR/USD plays 1.0950/1.0883 then recovers to
1.0922.
● GBP/USD sold sharply from 1.4413 to 1.4285.
● EUR/CHF notc hes up another new high at 1.1130
from 1.1078.
● EZ Dec Money-M3 Annual Growth 4.7% vs previ-
ous 5.1%. 5.2% expected.
● EZ Jan Inflation, flash 0.4% y/y vs previous 0.2%.
0.4% expected.
● Swiss Jan KOF indicator 100.3 vs prev 96.8 re-
vised. 96.0 expected.
● CBR unchanged key interest rate at 11%.
● Kremlin spokesman: Russia interested in discuss-
ing oil market with all participants.
● Greece may have positive growth in last 2 quar-
ters of 2016.
Institutional Positions
● Morgan Stanley: Beyond the global backdrop, policy con-
cerns keep us negative on TRY and BRL.
● J.P. Morgan: Short EUR/NOK, GBP/USD, GBP/SEK, EUR/
CHF, USD/PLN, NZD/USD AND PLN/HUF.
● J.P. Morgan: Buy -1m/+2m one-touch calendars in USD/
JPY and USD/CAD.
● J.P. Morgan: Stay long USD/KRW via 3 month NDF (entry
point 1179), with dips back to 1200 likely to be viewed as
an opportunity to add to longs.

3. Economic Data Preview
● (0830 ET/1330 GMT) The U.S. Commerce Depart-
ment releases advance (first estimate) U.S. fourth-
quarter gross domestic product data. The report is
likely to show that GDP increased at a 0.8 percent
annual rate, after growing at a 2.0 percent rate in
the third quarter.
● (0830 ET/1330 GMT) The U.S. employment cost
index is expected to show a solid increase in wage
growth in the fourth quarter, at 0.6 percent after a
similar gain in the third quarter.
● (0830 ET/1330 GMT) Canada's economy is ex-
pected to have expanded by 0.3 percent in Novem-
ber, underscoring expectations that the fourth
quarter was likely weak at best.
● (0830 ET/1330 GMT) Canada's Producer Prices
probably dropped 0.3pct in December after falling
0.2 percent the prior month.
● (0945 ET/1445 G MT) ISM Chicago releases its
Purchasing Managers Index for January. The index
stood at 42.9 in December.
● (1000 ET/1500 GMT) The Reuters/Michigan Con-
sumer Sentiment Index likely fell to 93.0 in January
from 93.3 in the previous month.
Key Events
● (1045 ET/1545 GMT) FedTrade Operation 30-Year
Fannie Mae / Freddie Mac (max $1.950 bn).
● (1530 ET/2030 GMT) Federal Reserve Bank of San
Francisco President John Williams participates in a
panel before the Commonwealth Club, Bank of
America/Merrill Lynch Walter E. Hoadley Annual
Economic Forecast event in San Francisco.
Top News
● Euro zone inflation accelerated in January, only
modest relief for the ECB which is still likely to cut
rates again as price growth could turn negative by
the spring and lending suffered an unexpected set-
back. Headline inflation rose to 0.4% from 0.2 per-
cent while core inflation, which strips out volatile
food and energy prices, rose to 1pct from 0.9 per-
cent, reversing the previous month's fall.
● The BoJ unexpectedly lowered a benchmark inter-
est rate below zero, stunning investors with an-
other bold move to stimulate the economy as vola-
tile markets and slowing global growth threaten its
efforts to overcome deflation.
● China had a broader fiscal deficit in 2015 than a
year earlier as it jacked up spending to cushion an
economic slowdown and government revenue grew
by the smallest percentage in 27yrs, Finance Minis-
try data showed on Friday.The ministry's website
said that fiscal expenditure rose 15.8 percent from
2014, while fiscal revenue grew 8.4 percent, leav-
ing a deficit of 2.355 trillion yuan ($358 billion).
● German retail sales dropped in December for a
weak end to the year, suggesting the private con-
sumption that has driven Europe's largest economy
could lose steam in the fourth quarter. Retail sales
were down by 0.2pct month-on-month in real terms
after growing a revised 0.4pct the previous month,
the Federal Statistics Office said on Friday.
● Russia's central bank left its main lending rate on
hold as expected but noticeably toughened its
rhetoric in the wake of a relentless oil price slump
that has sent the ruble crashing to record lows. The
central bank said in a statement it did not rule out
a tightening of its monetary policy, if the inflation
risks amplify, and that the deterioration in global
commodity markets would require a further adjust-
ment of the Russian economy.
● British consumer morale rose for a second month
in a row in January to hit its highest level since last
summer, but households remain pessimistic about
the economy’s outlook, a survey showed on Friday.
Market research firm GfK said its overall consumer
sentiment indicator rose to +4 in January from +2
in December.
● Iran's oil exports are on set to rise more than a
fifth in January and February from last year's daily
average, data from a source with knowledge of its
loading schedules shows, revealing how Tehran is
ramping up sales after the lifting of sanctions.
● U.S. economic growth likely braked sharply in the
fourth quarter as businesses doubled down on ef-
forts to reduce an inventory glut and unseasonably
mild weather cut into consumer spending on utili-
ties and apparel. Gross domestic product probably
rose at a 0.8 percent annual rate, according to a
Reuters survey of economists, also as a strong dol-
lar and tepid global demand hurt exports, and
lower oil prices continued to undercut investment
by energy firms.
● Taiwan's economic growth in 2015 slowed to its
weakest pace since the global financial crisis, as
ebbing world demand took a heavy toll on the is-
land's exports and maintained pressure on the cen-
tral bank to further lower rates. GDP in the final
three months of 2015 contracted 0.25 percent
from a year ago, according to Directorate -General
of Budget, Accounting and Statistics. That ex-
tended a 0.63 percent slump in the June -September
quarter and was below expectations of a 0.25 per-
cent contraction.
3 www.econotimes.com

4. 4 www.econotimes.com
FundamentalAnalysis
Subdued German core inflation to push ECB into further
loosening monetary policy, possibly in March
Preliminary state data released on Thursday indicated that
German inflation inched up in January, but overall price pres-
sure remained weak, which may embolden proponents of
further central bank stimulus. The German inflation rate rose
to 0.5% in January, as expected. However, while the headline
inflation is doing flips and twists due to the volatile energy
prices, the core inflation rate (without food and energy) has
remained at around 1.3% since 2012. The reading was the
strongest since May 2015 but still far from the ECB's target.
Volatility in energy prices is causing a rather erratic movement
in the headline inflation, but core inflation rate is looking as
solid as a rock, hovering around 1.3% since 2012. Nothing has
been able to really push the core rate higher, figures highlight
the European Central Bank’s struggle in hitting its inflation
target of just under 2 per cent. The ECB ultra-loose monetary
policy has largely fallen flat without having much effect on
the real economy.
German consumer prices account for almost 30% of the euro
zone index. With the continued slump in energy prices, fur-
ther second-round effects on other goods and only little pric-
ing power from retailers and producers, a strong acceleration
of German inflation any time soon is far from real. From the
ECB’s perspective, the steadfast anchor of the German core
inflation rate constitutes a bar that is preventing the euro
zone inflation rate from rising towards the 2% target.
"We do not believe that the euro zone inflation rate will move
very quickly towards the ECB inflation target. Besides still not
anchored inflation expectations, the slack economy and barely
rising credit demand, this should lure the central bankers into
further loosening monetary policy possibly in March, possibly by
lowering the deposit rate by a further 10 basis points", says Com-
merzbankin a research report.
Fundamental deflationary pressures persisting elsewhere in
the euro zone and worryingly low inflation expectations give
the ECB every reason to provide more policy support. ECB
President Mario Draghi has said the bank still has plenty of
options left, suggesting it could act as early as March. A ma-
jority of economists in a Reuters poll said the ECB is likely to
cut its deposit rate again in March.
"For the ECB ... the challenge has not become any easier. In fact,
German inflation data are welcome arguments for the opponents
of additional ECB action," INGBank analyst Carsten Brzeski said.
Eurostat’s flash estimate released today showed Eurozone
headline inflation recovered to 0.4% y/y in January, up from
0.2% in December. The more important core inflation in-
creased to 1.0% y/y from 0.9% previously. The ECB will have
February monetary developments and inflation data to assess
whether low oil prices are making their way into core inflation.
For now we feel the ECB is likely to cut its deposit rate again
in March. EUR/USD was little changed after Eurozone CPI
data, trading at 1.0915 as of 1030 GMT.

5. 5 www.econotimes.com
Economy Watch
● Philippines economic planning chief says 7-8 pct growth doable this year.
● Philippines economic planning chief says decline in oil prices to benefit the country.
● Reuters Survey - India to revise up fiscal deficit target to 3.7 pct of GDP in 2016/17, 3.5 pct in 2017/18 (3.5 pct, 3.0 pct
currently).
● Reuters Survey - Markets and ratings agencies would accept some slippage in 2016/17 fiscal deficit – economists.
● Reuters Survey - India gross borrowing for 2016/17 expected to be 6.49 trillion rupees.
● Reuters Survey-18 of 27 economists don't expect Feb 2016 budget to be Arun Jaitley's last as finance minister.
● Reuters Survey - All 32 economists see Reserve Bank of Australia keeping rates on hold at record low 2.0 pct at Feb 2
meeting.
● Reuters Survey - Majority of economists forecast steady rate outlook until early next year.
● Reuters Survey - 11 out of 31 see a rate cut by mid-year.
● U.S. economy on track to grow 1.0 pct in fourth quarter from +0.7 pct estimate Jan 20-Atlanta Fed's Gdpnow model.
● Iran's Rouhani expects producers to restore balance in the short-term.
● S.Africa's cbank statement: Headline CPI now expected to average 6.8 pct in 2016 from 6.0 pct seen in November.
● S.Africa's cbank statement: GDP growth seen at 1.3 pct in 2015 vs 1.4 pct forecast in November.
● S.Africa's cbank statement: Core inflation to average 6.0 pct in 2016, 5.9 pct in 2017, pvs forecasts 5.5 pct and 5.4 pct.
● S.Africa's cbank statement: GDP growth forecast for 2016 seen at 0.9 pct vs 1.5 pct in November.
● S.Africa's cbank statement: Headline CPI now expected to average 7.0 pct in 2017 from 5.8 pct seen in November.
Policy Watch
● Futures imply traders see 12 pct chance of Fed raising rates at March policy meeting - Reuters data.
● Futures imply traders see 34 pct chance of Fed rate hike in March, up from 31 pct Tuesday - CME'S Fedwatch.
● Futures imply traders see 14 pct chance of Fed raising rates later Wednesday, little changed from Tuesday - CME'S Fed-
watch.
● Reuters Survey-50 percent probability ECB will increase its monthly asset purchases in March.
● Reuters Survey-31 of 59 economists agree with Draghi that the ECB has 'plenty of instruments' left to deploy.
● Reuters Survey-59 of 68 economists predict a deposit rate cut in March.
● Reuters Survey-Median 80 percent probability ECB will ease policy in the next six months.
● Chile central bank benchmark rate seen at 3.5 pct in Feb - cenbank poll of traders.
● Hungary cbank plans to keep base rate steady for sustained period -Managing Director Virag.
Trade Views
● Morgan Stanley: Our bear case of 1.30 for GBP/USD by year end is becoming more likely.
● Morgan Stanley: For now, GBP weakness will likely be driven by high market volatility, weakness in global trade and a dov-
ish BoE.
● Morgan Stanley: We look for more depreciation in ZAR for 2016 given risks on the capital account from growth weakness
and an unstable external environment, amid disappointing current account rebalancing.
● Markets expect the BoE to stay on hold for longer and Brexit risks to rise throughout the year, then inflows into UK markets
may start to slow, no longer providing the GBP support.
● Morgan Stanley: USD/ZAR to trade at 18.75 for 2016.
● Sterling turns lower, hits day's lows against euro and dollar.
● Dollar/yen briefly spikes after Nikkei reports BoJ discusses negative interest rates.

6. Forecasts
6 www.econotimes.com
USD/CHF
CONTRIBUTORS 1 MTH 3 MTHS 6 MTHS 12 MTHS
4CAST 1.0175 1.0385 1.0645 1.0800
ALPHA BANK 1.0200 1.0300 1.0500 1.0600
ANZ BANK 1.0200 1.0300 1.0700 1.0000
BBVA 1.0190 1.0480 1.0280 1.0450
BMO 1.0000 1.0100 1.0300 1.0700
BNP PARIBAS 1.0300 1.0800 1.1200 1.1400
BOFAML 1.0500 1.0900 1.1000 1.1700
BTMU 1.0100 1.0200 1.0500 1.0600
CIBC 1.0000 1.0300 1.0300 1.0300
CITIGROUP -- 0.9600 -- 1.0300
CREDIT SUISS 1.0200 1.0800 1.0900 1.1200
DANSKE BANK 1.0200 1.0200 1.0100 0.9900
DEKABANK -- 1.0300 1.0700 1.1200
DESJARDINS G 1.0100 1.0300 1.0500 1.0600
DEUTSCHE BANK -- 1.0300 1.0800 1.1800
DNB 1.0100 1.0300 1.0700 1.1500
DZ BANK 1.0050 1.0200 1.0200 1.0500
EUROBANK 1.0093 1.0000 0.9821 0.9829
GOLDMAN SACHS 0.9900 1.0200 1.0400 1.1000
HELABA 1.0000 1.0500 1.0000 1.0500
HSBC 0.9800 0.9400 0.9100 0.8500
IFR MARKETS 1.0300 1.0500 1.0600 1.0700
IHS GLOBAL 1.0090 1.0280 1.0430 1.0090
INFORMAGLOBAL 1.0000 1.0000 1.0200 1.0300
ING FINANCIAL 1.0200 1.0300 1.1000 1.0000
INVESTEC 1.0100 1.0200 1.0100 0.9600
MORGAN STANLEY 1.0200 1.0700 1.1000 1.1500
NATIXIS -- 1.0300 1.0600 1.0800
NOMURA 1.0100 1.0300 1.1000 1.1200
NORD/LB 1.0100 1.0100 0.9600 0.9400
NORDEA BANK 1.0004 1.0002 1.0419 1.0845
OCBC 0.9950 0.9950 1.0100 1.0400
POHJOLA BANK 1.0000 1.0000 1.0200 1.0300
RABOBANK 1.0000 1.0100 1.0200 1.0400
RBC 1.0400 1.0800 1.1200 1.1200
RBS 1.0200 1.0540 1.0900 1.1460
SANTANDER 0.9900 0.9900 1.0200 1.0400
SAXO BANK 1.0300 1.0800 1.1300 1.1800
SCOTIABANK 1.0300 1.0300 1.0900 1.1600
SEB 1.0300 1.0800 1.1200 1.1100
SOCIETE GENERALE -- 1.0500 1.1100 1.1400
ST GEORGE BANK 1.0300 1.0300 1.0200 1.0000
STANDARD CHART -- 1.0800 1.0500 1.0600
SWEDBANK 1.0100 1.0600 1.0800 1.0500
UNICREDIT 1.0300 1.0300 1.0500 1.0400
WELLS FARGO 0.9825 0.9825 1.0150 1.0725
ZKB 1.0000 1.0300 1.0400 1.0500
USD/JPY
CONTRIBUTORS 1 MTH 3 MTHS 6 MTHS 12 MTHS
4CAST 120.00 124.00 127.00 128.00
ALLIED IRISH 121.00 123.00 124.00 125.00
ALPHA BANK 120.60 123.00 124.00 125.00
ANZ BANK 118.00 117.00 115.00 115.00
AUREL 120.00 123.00 121.00 125.00
BANCO BPI 120.00 125.00 130.00 125.00
BBVA 125.00 128.00 131.00 133.00
BMO 122.00 123.00 124.00 127.00
BNP PARIBAS 120.00 128.00 130.00 134.00
BOFAML 125.00 128.00 125.00 120.00
BTMU 119.00 120.00 119.00 117.00
CIBC 122.00 125.00 124.00 120.00
CREDIT SUISSE 121.35 126.00 127.33 130.00
DANSKE BANK 124.00 124.00 125.00 125.00
DESJARDINS G 121.00 123.00 124.00 127.00
DNB 124.00 126.00 130.00 132.00
DZ BANK 120.00 122.00 125.00 125.00
EUROBANK 120.00 119.00 117.00 115.00
GOLDMAN SACHS 120.90 122.00 125.00 130.00
HELABA 121.00 125.00 123.00 125.00
HSBC 122.00 125.00 120.00 115.00
IFR MARKETS 125.00 120.00 122.00 120.00
IHS GLOBAL 121.09 122.12 123.28 125.51
INFORMAGLOBAL 120.00 123.00 123.00 128.00
ING FINANCIAL 122.00 123.00 125.00 120.00
INVESTEC 121.00 122.00 122.00 122.00
JULIUS BAER 119.00 120.00 120.00 118.00
MIZUHO SEC 120.00 123.00 128.00 130.00
MORGAN STANLEY 121.10 125.00 121.00 115.00
NOMURA 122.26 126.25 127.50 130.00
NORD/LB 121.03 122.00 122.50 123.50
NORDEA BANK 120.19 120.05 117.84 115.35
OCBC 117.65 117.50 118.67 121.00
POHJOLA BANK 122.00 123.00 127.00 131.00
RABOBANK 121.00 122.00 123.00 125.00
RBC 123.00 128.00 132.00 128.00
RBS 120.00 122.00 123.00 123.00
SANTANDER 120.00 125.00 125.00 125.00
SAXO BANK 120.00 125.00 126.00 125.00
SCOTIABANK 124.00 128.00 129.00 131.00
SEB 122.00 123.00 127.00 127.00
SOCIETE GENERALE -- 123.00 124.00 125.00
ST GEORGE BANK 124.00 125.00 126.00 124.00
SWEDBANK 120.00 121.00 122.00 124.00
UNICREDIT 125.00 125.00 126.00 127.00
WELLS FARGO 121.00 121.00 122.00 124.00
ZKB 120.30 123.00 124.00 126.00

7. 7 www.econotimes.com
Currency Derivatives
Deploying GBP/AUD diagonal straps to serve both speculative and hedging objectives
As we anticipate a short term upswings are on the table but long term downtrend can also not be ruled out based on our tech-
nical reasoning in our previous article, we would like to position accurately and strategize using fairly priced options so as to
match the trend.
For our previous articles on technical analysis, please refer the below link for more reading:
http://www.econotimes.com/FxWirePro-GBP-AUD-bears-travel-in-sloping-channel-confirms-long-term-downtrend-to-
prolong-despite-interim-upswings-151998
Since, the pair is on verge of reversing the direction to the short term upswing approximately at around 2.0025 levels that i s
where it forms a consolidation pattern, such as a bottoming at channel base or in other words where the spot FX price action
has become tighter and where volatility would shrink away in advance of a big move in either direction. Typically, we're look-
ing for a pennant within the context of an upward trend.
After going through the above article on technical reasoning, we hope what the trend is intended to be at this juncture and i f
you compare the prevailing price of GBPAUD with the recent swings it would be more convincing.
Therefore, it's now the stage of tackling the situation after evaluating. For now, the pair has pretty much responded as per
earlier analysis and it should drag near channel base and we could then foresee a price bounces at around 2.0025 levels in
near term as the daily chart may pop up some buying interest that would result in some price recoveries from there onwards.
but we maintain our long term bearish targets.
As a result, we recommend wait for another 3-4 trading days then build the portfolio with longs positions in 2 lots of 2W
ATM 0.51 delta calls and 1 lot of ATM -0.49 delta puts of 2W expiries.
Since, we anticipate upswings after 3-4 days, this GBPAUD option straps strategy should take care of both upswings and
downswings, and yields handsome returns on the upside in short term.
Delta of far OTM options is very small which is why we've chosen ATM instrument on call. A 1 point movement in underling
pair will not have much effect on the option premium.
Investors need to be optimistic that the volatility in the underlying pair will occur during the short lives of the options. Pref-
erably, the movement will occur towards the leveraged side. If the hoped for price swing does occur, these strategies can be
quite rewarding.

8. Trade Positions
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EUR/USD USD/JPY GBP/USD USD/CHF AUD/USD EUR/GBP
RESIST3 1.0976 121.94 1.4476 1.0307 0.7171 0.7756
RESIST2 1.0973 121.50 1.4445 1.0255 0.7147 0.7665
RESIST1 1.0968 121.49 1.4429 1.0220 0.7129 0.7631
SUPPT1 1.0888 119.99 1.4277 1.0111 0.7024 0.7550
SUPPT2 1.0876 119.12 1.4271 1.0106 0.7008 0.7546
SUPPT3 1.0868 118.38 1.4268 1.0038 0.6992 0.7527
Strategy SHORT SELL BUY LONG BUY SHORT
Price 1.0900 121.45 1.4270 1.0121 0.7045 0.7612
Target 1.0560 - - 1.0325 - 0.7425
Stop 1.1060 - - 1.0100 - 0.7695
EUR/JPY EUR/CHF USD/CAD GBP/JPY EUR/NOK EUR/SEK
RESIST3 132.60 1.2000 1.4156 184.65 9.5705 9.3150
RESIST2 132.46 1.1671 1.4120 183.95 9.5320 9.3125
RESIST1 132.45 1.1181 1.4111 183.37 9.5260 9.3010
SUPPT1 129.60 1.1079 1.3980 182.19 9.3917 9.2505
SUPPT2 129.48 1.1020 1.3948 181.04 9.3795 9.2305
SUPPT3 128.95 1.0954 1.3941 180.00 9.3448 9.1585
Strategy SELL LONG BUY SHORT SELL LONG
Price 132.40 1.1069 1.4040 182.62 9.5310 9.2610
Target - 1.1600 - 180.10 - 9.3400
Stop - 1.0900 - 184.30 - 9.2450
NZD/USD AUD/NZD AUD/JPY USD/SEK USD/NOK USD/ZAR
RESIST3 0.6558 1.1049 101.24 - - 16.5870
RESIST2 0.6540 1.0989 99.91 - - 16.4995
RESIST1 0.6532 1.0968 99.01 - - 16.4500
SUPPT1 0.6464 1.0903 95.17 - - 16.1850
SUPPT2 0.6411 1.0902 94.78 - - 16.0485
SUPPT3 0.6348 1.0844 94.00 - - 15.1505
Strategy LONG LONG - SELL - LONG
Price 0.6455 1.0735 - - - 16.1850
Target 0.6670 1.1260 - - - 16.5500
Stop- 0.6410 1.0680 - - - 16.0350
Source: Aggregate trading positions of traders reported on Thomson Reuters FX matching platform

9. 9 www.econotimes.com
Technical Analysis
USD/CHF breaks major trend line resistance, targets 1.0300/1.0330
Major resistance – 1.0170 (trend line joining 1.01980 and 1.01894)
● The pair has broken major resistance 1.0170 and jumped till 1.02250. It is currently trading around 1.0200.
● Short term trend is bullish as long as support 1.0140 (7 day EMA) holds. Any break below 1.0140 will drag the pair down till
1.0100/1.005.
● On the higher side resistance is around 1.0225 and break above 1.0225 will take the pair till 1.0255/1.0300/1.0335.
It is good to buyat dips around 1.0170 with SL around 1.0100for the TP of 1.0255/1.0300

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Trade Idea
We prefer to short GBP/USD on rallies
Pattern formed- Channel pattern
Major resistance – 1.4420 (trend line joining 1.43626 and 1.4407)
Major support -1.4260 (trend line joining 1.4079 and 1.4170)
● The pair has made a high of 1.4413 and started to decline from that level. It is currently trading around 1.43630.
● On the higher side any break above 1.4420 will take the pair to next level around 1.4450/1.4500.
● Cable is facing short term support around 1.4350 and break below will drag the pair further down till
1.4300/1.4270/1.4250 level.
It is good to sell on rallies around 1.4365-1.4370 with SL around 1.4420for the TP of 1.427
RESISTANCELEVELS SUPPORT LEVELS
R1-1.4420 S1-1.4350
R2-1.4450 S2-1.4300
R3-1.4500 S3- 1.4270

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