Last week’s recap
I caught the short moves on the currencies — the euro and the pound — and took longs on the US indices on the pullback, which were moved to breakeven before the weekend.
The interesting part was the setup into Friday. The market spent the week waiting for weak payrolls and pricing them in, right up to the print. The data came out strong instead, and landed straight into the quarterly expiration on top of that.
After that I am broadly leaning toward a weaker dollar — though that is a lean still being thought through, not a position.
The week ahead — a calendar with two live days
This is a thin week, and the shape of it matters more than usual:
- Monday — US holiday, so low liquidity.
- Tuesday and Wednesday — empty.
- Thursday — the ECB is expected to hike, which is short-term positive for the euro.
- Friday — CPI, right into the market close. It is the last inflation print before the Fed’s rate decision.
Two days carry the week. That is worth knowing before deciding how much to do on the other three.
JPY
They are actively loading a lot of open interest on the 0.0068 strike, and I agree with the read behind it: an attempt to halt the efforts of the Bank of Japan and the US Treasury.
Mapped onto spot, that same area gives zones that can be worked.
EUR
Here the chart shows the range of interest of the market maker and the funds. The workable approach is to take the zones where the percentage zones land — and to take each one with its indicated break probability rather than as a flat level.
GBP
The same story as the euro, with one oddity: there is a strange skew up top on the maximum-volatility boundary, the 3% zone. These are almost always laid symmetrically, and here they are not.
The useful part is that the options landed cleanly as well — which gives a stack of quality independent confirmations at one point, and that can be worked confidently.
AUD
The maximum-volatility boundaries of Wednesday, the Week and the Contract are all marked. The weekly boundary up top coincides with the Contract, so a break there is unlikely. A push into it is possible on Friday on the CPI, but under the Fed decision I would trade at least the pullback from it.
On the Limit Driver, with 3000 calls sitting on the boundary of Wednesday’s maximum volatility, the plan is to work by market and watch the reaction in the clusters.
Final take profits sit at 0.6993 for now — but a drop of that size is only possible after a rate hike from the Fed.
The plan, in one line
These are zones and scenarios being watched — the market decides, not the trader. Let price come to your levels and let the confirmations line up before you act. New to the terms? The glossary covers every structure named above — and if this is your first visit, where to start lays out a reading order through the free material.