Weekly Insights March 27, 2022
Downward sloping for the week-long period...
Nick Howell
Red Jacket Chief FX Strategist
Summary of Weekly Insights: "Unexpected events related to the war could trigger violent moves.”
USDCAD started the week at 1.2604 and finished at 1.2476.
Range on the week was 1.2499 to 1.2631.
Things affecting USDCAD this week:
EURUSD finished at 1.0982
Oil is up to $113.40, up $9.65
NATO has decided to ramp up sanctions
US economic data:
New Home Sales were at 772k, 810k was expected
Core Durable Goods down 0.6%, up 0.6% was expected
Pending Home Sales down 4.1%, up 1% expected
Initial Claims at 187k, up 212k was expected
In Canada:
No new data
What do we like?
Gemini Investors - Buy USD at 1.2450
Theta King - Buy USD at 1.2460 if seen on Monday, Tuesday, or Wednesday
Prop Account - Buy USD at 1.2480, 1.2500 seems to be a barrier
The Week Ahead
USD
Tuesday- Conference Board Consumer Confidence, JOLTS Job Openings
Wednesday- ADP Non-Farm Employment, GDP for Q4
Thursday- Initial Claims
Friday- Non-farm Payroll, ISM Manufacturing PMI, Unemployment Rate
CAD
Thursday- GDP for January
The Models and The Stats
The Theta King Model
Last week's predictions: Up, Up, Up (Monday, Tuesday, Wednesday). The BMO Fair Value Model currently has no position.
This model provides a 30-day prediction in the direction of the USDCAD for our Theta King FX contract investors. Please be sure to check in with us each morning of a trade since we run the model daily.We combine a fair value model with our proprietary model called "Jeremy".First question; "Is the USDCAD trading at fair value?" If not, we recommend a contract in the direction of fair value. This provides an extra level of protection over and above the knockout barrier already offered as a feature of the contract. If the USDCAD is at fair value, we ask the next question.Second question; "If USDCAD is at fair value, what is the market consensus telling us?" Here we look at recent price changes in USDCAD puts and calls to tell us about the expected direction over the next 30 days.Combining these two approaches has been our most accurate prognosticator.
The Gemini Model (nicknamed "Jeronimo")
Sell (53% confidence)
This prediction is a seven-day tenor used mostly for the purchase of Gemini shares. The predictions are based on deep learning algorithms trained with historical price data and a significant number of other metrics. It incorporates patterns and trend behavior through the use of machine learning algorithms. Another prediction is made on Monday afternoon for the Tuesday trades.
Friday Volatility Reading (for Theta King FX Contracts)
7.1%
Contracts issued this coming week, Monday-Wednesday, will have a minimum net leveraged payout of $10,000If you haven't traded with us in Theta King FX contracts, please see our new product page on the website.
Theta King Statistics
Stats to February
Contracts issued = 1,140
Matured (paid out) 899 = 78.9%
Average payout on leveraged contracts = $14,647
And Finally...
Thanks for reading! We’ll see you next Sunday night.
We’d love your feedback. Please email thoughts and suggestions to dave@redjacket.ca.
Happy Trading!