EMFX Currency Charts- Risk lie to upside short term !

Cautious on EMFX short term possibly till end of July. If you are following my posts since May 2014 you will notice a  short bias in emerging market currencies especially INR (post election).

The following charts are long term however the daily formations and intra-day price action off this major trendlines should not be ignored! Also notable three day bank holiday coming in the US so I would expect the vols to kick in next week or so. Time to buckle up the seat belts..

 

Daily 10YR TRY Yields basing out at 8.50 support.

RV Trade: Bullish HUF/PLN

Ref Rate 100HUF= 1 PLN

Long term charts in HUF/PLN indicate a very good medium term opportunity for longs  in 1.34-1.3550 region depending on what sort of risk profile you have . The base of the long term trendline is at 1.3400 , I believe the support will continue attractive relative value traders and  there is good potential for 1.4200 in 6 months time.

>First of all my quant models compliment the current growth figures in Hungary which is now in the league of fast growing economies in (CEE region).
>Hungary's current account surplus will continue supporting the Forint relative to Poland which runs a deficit.
>Both CB's i.e  MNB and NBP have initiated series of small rate cuts  citing deflationary risks however the NBP seems relatively more dovish than MNB in its approach to tackle deflationary threats.


Risks:
Both Hungary and Poland have picked up momentum in terms of growth this year. The events which will dictate  the  pair are as below:
>Change in monetary stance by CB's
> Inflation starting to pick up.

Best of luck traders!
PS: Not to confuse the Bullish HUF/PLN with the earlier posted  Bullish USD/HUF . Different strategy one is RV other one is Directional..

Moreover the USD/HUF made a high print of 227.30 and had gained almost 2.75% since my post on 22nd May (221.50)

Silver/Gold Ratio an interesting medium term trade for 2014 !

Ref: 100oz Silver =  oz Gold

XAG/XAU  has been testing a long term trendline since 90's and has now made an interesting reversal pattern which I like to call it as 'Triangular Reversal' at a major trend line support. In other words Silver is heading for a major reversal and is more likely to revert back to 1.75 with a strong possibility of 1.90  on a longer term basis against Gold. My analysis is based on few stat arb models which I have run at my end and traditional methods like the one posted here. In short  Long XAG/XAU ref rate 1.58 has a potential to gain 15-20% in about years time. Fundamental factors could play a role as US growth gathers momentum along with other western countries like UK . ( Not to mention the positive spillover effects of US growth on EM countries.)
Medium-Long Term Play Guys
Best of luck traders !

USDHUF AT RISK ?

Guys if you trade USD/HUF then you gotta pay attention to latest formations on M,W and D charts. My weekly  stat arb is slightly skewed higher and supports the current bounce on the monthly trendline. I think there is a strong possibility of 230  and I am closely watching the flag structure on dailies along with the support on the daily trendline at 221. 

Good luck!

Indian elections USDINR thoughts!

Just a word of caution here for my followers from India.  Updating my thoughts as have got several requests with regards to USDINR.

First things first, my monthly and weekly stat arb have realigned for a slightly bullish forecasts and project a gradual move higher valid for next 3-4 months. Technically 59 is now key and should remain pivotal for next couple of months . I rarely trade against my model forecast hence I am more likely to stay away from INR shorts due to high carry but for corp players levels like 59 and 56( very strong , that thou if we see this) are good levels to own Dollars I believe.

INR traders and FDI's have already positioned for BJP victory and now what matters is the majority with which BJP wins. The higher majority is likely to give an immediate push to USDINR lower and a slim majority will result in profit taking sales to emerge.

As per model forecast a 4-5% upward correction is likely from post election Monday USDINR daily close price.

best of luck..

Pre-FOMC mins Stat Arb Model Forecasts

Hello Traders,

Going into FOMC minutes my daily USDZAR, USDTRY, EURTRY AND DOLLAR INDEX models are indicating a slight bullish forecast. This forecast is valid for next 5-7 working days and I am expecting Dollar to pick up momentum on upside for this week going into mid-next week.(short term).

Also notable Kiwi daily stat arb has indicated exhaustion in uptrend and correction lower is due. Out of all the forecasts I like the USDZAR LONG trade 'smalls' at 10.90 stops below 10.80 for 11.20 types.

On the majors, few other pairs like EURUSD,USDCHF have indicated slight exhaustion in trend and support a mild Dollar rally. Will be surprised any major downside in Dollar today. 

best of luck guys

INR UPDATE

With regards to the Long EUR/INR issued on 13th Nov, think time is ripe to close it as the position is not feasible owing to cost of carry which has costed almost 3% even though the price reference level is almost same since Nov 13'.

Some of the drawbacks of shorting high yielders eh !

will keep updated if any other interesting opportunities come up.