A little bit of fundamentals and technical

Janet Yellen is set to speak tonight, historically her speech echoes the sentiments from the FOMC minutes. This will cause the USD to be bullish especially pre-speech and post speech direction would depend on the content.

I went in long on USD/JPY at 103.70

In addition to the fundamentals, this pair was near support level when I entered. A bounce given the strength of the dollar is very probable.

As for GBP/JPY,this pair was also at support and given the recent outcome of the MPC votes, long term.GBP/JPY should be up.

MPC bank rate votes- Two voted to hike rates

The Bank of England Monetary Policy Committee announced their voting results. Two voted of the board members voted for a rate hike while the other nine were agreeable that rates should remain as they are.

It is a sad moment for me as my GBP/JPY would have given me at least another 40-50 pips had I not closed my position earlier.

FOMC minutes- rate hike may be earlier than expected

FOMC is always a mover for USD pairs and equity markets. This time, the report highlighted the strength in the US economy, causing the USD to extend its bull run and equities made gains.

The key point was that the creation of new jobs may spur a rate hike earlier than expected. Interest rate parity shall dictate that whenever there is a rate hike, the currency will extend gains.

The full FOMC minutes.

GBP/JPY long and closed

I went in long on this pair yet again at 170.80, the same as my previous trade and closed it with a 60+ pip gain.

I did not want to risk my unrealised profit prior to MPC asset purchase and bank rate votes were out.

Australian Monetary Policy minutes

It has been a busy day for economic reports today. The Australian Monetary Policy minutes were out this morning at 9.30.

Customarily, this triggered a bullish sentiment for AUD/USD before the minutes were released. This pattern has repeated time after time.

Notice the level of this pair at 5 am and at 9 am. Regardless of the content, this pair has always showed signs of upward movements in anticipation of the document to be made public.

The minutes can be found here.

Realised gains before UK CPI came out

In the previous entry, I mentioned that I went in long for GBP/JPY.

I wanted to close my position although the trade did not reach my target price. The reason behind this is simply not wanting to risk my unrealised gains. This is a volatile pair and a 100 pip movement in a day is possible.

I closed my position with a 70+ pip gain. 

The consumer price inflation (CPI) was terrible this time, it dropped by 0.3% in comparison to the previous month and failed to meet estimates. The key points of the report are: 

• The Consumer Prices Index (CPI) grew by 1.6% in the year to July 2014, down from 1.9% in June.
• Falls in clothing prices provided the largest contribution to the fall in the rate. Other large downward effects came from the alcohol, financial services and food product groups.
• The largest, partially offsetting, upward effect came from the transport group.
• CPIH (not a National Statistic) grew by 1.5% in the year to July 2014, down from 1.8% in June. RPIJ grew by 1.8%, down from 2.0% in June.
• The National Statistics status of CPIH has been discontinued pending work by ONS to investigate and improve the method for measuring owner occupiers' housing costs in this index. Full details can be found on the UK Statistics Authority website and an explanatory note on the ONS website.

There`s growth in the UK economy!

The second GDP estimate remained the same as the first at 0.8%. This has led to the revised expansion of the economy for 2014. According to Reuters, this has been the best performance in more than six years.

The full report can be obtained here.

This further strengthens my GBP/JPY long position. I had an instant 50 pip gain at the moment the data was out.

Long GBP/JPY

I entered this pair long at 170.83 as the support at 170.775 is very strong and I missed the opportunity to enter at the initial bounce. 

The second estimate for the UK GDP will be out tomorrow morning. I did some back-testing and the results were in line with this move. 

The first estimate was 0.8%, meeting expectations. Historically, movements for the UK GDP has been in line and if any will be very tiny, insufficient to go against the current for GBP pairs. 

Sold MEGB

I closed out my short and long term positions in MEGB at 46 and 46.5 cents respectively. The overall gain was 12 and 14%.

My move earlier this year to anticipate this counter to double up from the structure of the call and put options by the main shareholder did not take place. Never the less, this is still a gain and a realised one.

Bull run ended for USD

The second quarter advanced GDP in US surprised many by showing a growth of 4% on Wednesday.
The bull run for the USD started then and I went in long for USD/JPY and shorted NZD/USD, AUD/USD and EUR/USD.

However the run has come to and end in my opinion. I entered in line with the weakening dollar, holding long positions in GBP/USD, NZD/USD and shorted USD/CHF.