I have put in an order to open this morning: long GBP/USD. This is a technical trade — playing the recent range — but would probably also do well if my short EUR/USD trade goes against me. I should probably have just bought it, because the price wasn’t too bad, but I put in an order to buy slightly lower and the price has run up. Let’s hope I get another chance.

I am watching the UK 10-year yield still. At 4% it is a clear technical sell — I am planning to buy the 10-yr gilt future, but the market isn’t open today owing to the UK bank holiday. The withdrawal of QE is a concern, so this is a short-term trade in the expectation of a reversal from 4% even if the yield then punches above 4%. The end of QE has been well signposted so I am not too concerned about a sudden break in the bond market.

The other interesting thing today is the S&P 500, which has broken out of its trading range. The futures broke out and tested the level on 23 Dec, but I missed that because I tend to watch the cash index. In any case I am going to wait until the market opens today before doing anything.

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