Conspiracy theorists have observed that China hiked its RRR on January 12 and February 12; a swift glance at the calendar reveals that today is March 12.  Informa Global Markets also told its customers that  2 inv. houses say PBOC hikes rates today as well

1125 support is definitely a level  that BOK identified and the risk on the downside is 1085-95 area if 1120-25 breaks which will be quick drop with strong momentum in an oversold area.

If only RRR hike comes in,  it will be a nice short squeeze in  a well positioned market  and first target is where you see the resistance on that reverse head& shoulder around 1165-1170.. to break it .. needs extra news globally.

As a trading idea,

Buy 1w USDKRW call by paying 35k USD for premium.  5 mio USD notional with an atm spot  strike.
35k vs. 128k.. loss/win ratio with  tp at 1165.

David Greenlaw, MS Economist, had an interview with BBG radio the day before and spoke about his forecast for the next payrolls number. He is expecting a weather related rebound of +100k, a census impact of +100k and an ex-weather, ex-census rise of +100k (total headline payroll increase of +300k or more).

The front end of US Yield Curve is expected to shift higher if unemployment numbers comes in-line with NFP.  It is possible to see a further USD strength but market may not let people taking advantage of an easy trade and may bring some extra volatility in coming days as Move Index picking up from the oversold area.

For now, I think Dollar Index (DXY) seems to be capped at the moment and looking for a retrace down to  79.65-79.75 area with momentum turning into bearish at the moment. We have 55 weekly SMAVG and 23.8% fibonacci retrace of 74.17 to 81.34 rally.

Just to bear in mind.

• Never, under any circumstance add to a losing position.
• Capital comes in two varieties: Mental and that which is in your pocket or account. Of the two types of capital, the mental is the more important and expensive of the two. Holding to losing positions costs measurable sums of actual capital, but it costs immeasurable sums of mental capital.
• The objective is not to buy low and sell high, but to buy high and to sell higher. We can never know what price is “low.” Nor can we know what price is “high.” In bull markets we can only be long or neutral, and in bear markets we can only be short or neutral.
• Sell markets that show the greatest weakness, and buy those that show the greatest strength.
• To trade successfully, think like a fundamentalist; trade like a technician.
• Keep your technical systems simple.
• The hard trade is the right trade: If it is easy to sell, don’t; and if it is easy to buy, don’t. Do the trade that is hard to do and that which the crowd finds objectionable. Life is meant to be tough.
• An understanding of mass psychology is often more important than an understanding of economics.
• Be patient with winning trades; be enormously impatient with losing trades.
• The market is the sum total of the wisdom … and the ignorance…of all of those who deal in it; and we dare not argue with the market’s wisdom.
• Do more of that which is working and less of that which is not: If a market is strong, buy more; if a market is weak, sell more. New highs are to be bought; new lows sold.
• All rules are meant to be broken: The trick is knowing when… and how infrequently this rule may be invoked!

Bit late after that move in GBP, but this looks like   T H E trade to me  – according to my chart.

With the shocking RICS data, CABLE took out the lower side of the “Bear Flag” (see blue lines), which should open up for a bigger move lower.

Suggestions:  Sell CABLE between 1.5040-60 S/L above 1.5120.. bit expensive – but this might have “home run” potential.. urrghhh… Next support is 1.4800, then 1.4600-20 – inital target – and even 1.41ish afterwards. Would love to buy some options for that – but the RR – of course- is making this impossibly expensive.
Anyhow, see how we fare…
Good Luck!

(Reuters) – Oil prices fell from eight-week highs on Tuesday, pressured by a stronger dollar and uncertainty about an economic recovery.

U.S. crude futures for April fell 38 cents to settle at $81.49 a barrel, after reaching a low of $80.16 a barrel earlier. In London, North Sea Brent crude oil futures slipped 56 cents to settle at $79.91 a barrel.  A stronger dollar makes dollar-denominated commodities, such as crude oil, more expensive for holders of other currencies.

USDCAD touched down to 1.0235 support overnight and bounced up to 1.0275 with good amount changing hands around 1.0260-65 area. With above the reasoning to limit further CAD gains, the daily oscillators suggesting the bearish momentum decreasing and a possible squeeze on its way with Slow Stochastic suggesting a buy starting from an oversold situation.  With 1.0250-55 bringing intraday support, 1.0225 should be bottom of the day to let USDCAD turning around and printing 1.0435 in short term. Worth to bear in mind the 55 Days SMAVG at 1.0470.