Weekly Insights April 3, 2022
Early peak followed by fluctuations...
Nick Howell
Red Jacket Chief FX Strategist
Summary of Weekly Insights: "Oil will collapse with a ceasefire in Ukraine, and oil will soar with an escalation"
USDCAD started the week at 1.2467 and finished at 1.2512.
Range on the week was 1.2440 to 1.2592.
Things affecting USDCAD this week:
EURUSD finished at 1.1045, up 55 points
Oil is down to $99.75, down $12.75
No ending in sight for Ukraine-Russia situation
US economic data:
CB Consumer Confidence at 107.2, 107 was expected
JOLTS Job Openings at 11.26 million, 11 million expected
ADP Non-Farm Payroll at 455k, 450k was expected
GDP was 6.9%, 7.1% was expected
Initial Claims at 202k, 197k was expected
Non-Farm Payrolls up 431k, up 490k expected
Unemployment improved to 3.6% from 3.7%
Manufacturing PMI at 57.1, 59 was expected
In Canada:
GDP came in as expected, up 0.2%
What do we like?
Gemini Investors - Buy USD at 1.2460, looking for an upside bounce
Theta King - Buy USD at 1.2460 if seen on Monday, Tuesday, or Wednesday
Prop Account - Buy USD at 1.2460 with stop loss at 1.2310 (Bought USD at 1.2480 last week and took 100 point profit)
The Week Ahead
USD
Tuesday- ISM Non-Manufacturing PMIThursday- Initial Claims
CAD
Tuesday- Trade Balance
Wednesday- Ivey Report
Friday- Unemployment change, Unemployment Rate
The Models and The Stats
The Theta King Model
Last week's predictions: Down, Down, Down (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 (52% 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)
Over 5.5%
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 March:
Contracts issued 1,143
Matured (paid out) 902 = 78.9%
Average payout on leveraged contracts = $14,631
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!