Ken Veksler
The FX markets aren't in panic mode, at least not yet. That's the view of trader Ken Veksler who tells us what he's trading after a nervous week.
Short term
Trade view / 13 June 2016 at 14:10 GMT

GBPCAD may bounce into FOMC

FX Consultant / IFXA Ltd

GBPCAD sold off from 1.8335 to 1.8005 due to a Brexit poll claiming that the “leave” side had a 10-point lead over the “Stay” camp.  Two subsequent polls (by competing pollsters) have the race at a dead heat and GBPCAD has bounced. That suggests that there is plenty of room for a correction. And the correction may stem from position adjustments going into Wednesday's FOMC meeting.

Meanwhile, USDCAD has rejected the downside following a better-than-expected employment report on Friday. The mix of general US dollar strength and falling oil prices have driven USDCAD above resistance in the 1.2770 area which argues for additional gains toward 1.2900.

There is a ton of uncertainty around Wednesday’s FOMC meeting. Will the statement be hawkish, doveish or something in between? How will the new economic projections effect the rate outlook?  These questions and more may keep USDCAD bid while GBPUSD bounces within a 1.4100-1.4500 Brexit-poll dominated range.

Arguably, a rethink of the weekend's poll results combined with a bid tone to USDCAD should lead to GBPCAD gains in the next couple of days.

Management and risk description

This trade is borderline “toxic”. GBPCAD is all over the map, often times with no rhyme or reason and due to its large ranges, the stop loss is very vulnerable. The stop will get triggered on a rebound of WTI prices or on another Brexit poll showing the “leave” camp with a big lead.

It is also very opportunistic. It expects to gain from USDCAD buying into the FOMC meeting while Brexit positioning profit-taking gives GBPCAD a lift.

This trade should be closed prior to the FOMC statement being released.

Trade idea parameters

Entry: buy ½ position of GBPCAD at market (currently 1.8215), balance at 1.8140.

Stop: 1.8088.

Target: 1.8415.

Time horizon: two days-close before FOMC results.

GBPCAD 30-minute highlighting break of intraday downtrend and take profit
Source: Saxo Bank

GBPCAD 4-hour with Fibonacci retracement levels
Source: Saxo Bank

GBPCAD 5-year daily with moving averages
Source: Saxo Bank

— Edited by Martin O'Rourke

Non-independent investment research disclaimer applies. Read more
13 June
Estuardorlemus Estuardorlemus
Hello Mike , is the stop 1.8188 or 1.8088? Thanks !
13 June
Philidor Philidor
Hi Michael! I see what you're getting at, and of course it's technically sound but I'm very hesitant to trading spot GBP under these conditions. Just one mans opinion :-)

My view for any GBP pair would be set your sights on the actual vote, and where the greatest potential is, which is obviously "leave". Using options combined with spot, I then aim to break even or slightly more on a "stay" move, while taking losses only if we stay at current levels (the least likely scenario).
13 June
Michael O'Neill Michael O'Neill
Sorry Thats 1.8088
13 June
Michael O'Neill Michael O'Neill
Hi Philidor:
I agree with your Brexit concerns.which is why this trade ends on Wednesday.
13 June
John Roberti John Roberti
Dear Michael, Last week you indicated that in order to hope for a serious decline in oil, the level of 48,50 should be attained which has been the case today with a decline of 4 dollar drop in less than three days (48,23 this morning), even if presently it went up to 48,85! What do you expect for oil now with this new situation ,not to forget the increase in operated rigs in the us (Friday night) and the resumption of oil production in Alberta! By the way do you have info on this resumption? Worth mentioning the data from Ole Hansen on the short volume in oil which has picked up significantly last week. On the other hand, which would you consider the critical point which would indicate USDCAD definitely on the upside? Your present opinion would be appreciated Thanks in advance
13 June
John Roberti John Roberti
Sorry but I misread your note on GPBCad! you have already answered the question on USDCAD! thanks for that part.
13 June
Michael O'Neill Michael O'Neill
Hi John: WTI is trading as rationally as GBPUSD, meaning it is irrational. Oil analysts, Opec, Central banks etc all seem to believe that oil prices will be much higher later in the year. That long term view is providing support for the intraday view despite little evidence that the supply imbalance has been seriously adjusted. Having said that, the uptrend line remains intact.


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail