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DYNAMIC STRADDLE: USDJPY & GBPJPY - TP FROM BOJ & FOMC EVENT VOL The best Idea to play BOJ and FOMC from a risk-averse perspective is to own both in a Long Straddle Strategy Dynamic Straddle: Long USDJPY & Short GBPJPY - TP from volatility & Event likely hoods TP levels = cannot be greedy else you may miss one trades exit point so <25 pips when it goes in your direction for each - total TP = 50pips as 2*25pips Reasoning - Traditional Straddle involves would be long and short the SAME cross.. - However i suggest we long USDJPY as UJ has proportionately MORE upside possibility: 1. FOMC is likely to be neutral-Hawkish, this will help UJ trade flat/ higher = Supports long - - *FOMC PARADOX* important to note that in this sensitive risk-off market if the FED is too hawkish/ hikes it can cause a UJ sell off, as higher rates means greater economic/ market uncertainty as liquidity and financing becomes tighter (despite rate hiking usually making USD trade higher through increased $ deposit demand for higher rates) 2. BOJ is likely to be dovish, this will help UJ to trade higher (especially in this risk averse market - easing helps calm mrkts) = supports long 3. USDJPY ISNT directly impacted by BREXIT fears as GBPJPY as USD and JPY can be considered safety assets, this helps USDJPY trade higher = supports long So we have 3/3 for long USDJPY. - Now to hedge this trade AND benefit from possible downside, we SHORT GBPJPY as GJ has proportionately MORE downside possibility. 1. FOMC neutral-hawkish, drives risk-off momentum (higher rates reduces market liquidity and undermines economic growth thus increasing uncertainty) which drives demand for Yen/JPY, increased demand for JPY supports short GBPJPY 2. BOJ being dovish/ easing potentially helps JPY sell off - however, GBPJPY will be the least sensitive of JPY seller of the JPY crosses, as GBPJPY is the perfect play for Brexit and risk-off, hence in the long run JPY selling wont last long in GBPJPY as once JPY is cheap, buyers will enter to continue hedging/ speculating on brexit with the favourite pair, poor potential/ long run JPY sell side = supports gbpjpy short 3. GBPJPY is directly impacted by Brexit uncertainty in two ways. 1) as investors wish to sell GBP as the uncertainty is only negative for GBP (especially when polls are at 55%). 2) as Investors wish to buy JPY for their "safe haven" asset play. UJ only has the JPY buying to push it lower, which is limited/ offset further as USD buying can also be considered a "safe haven asset) = Supports short GBPJPY We have 3/3 for short GBPJPY Evaluation. - We have 3 points supporting both LONG UJ and SHORT GJ - AND by playing this trade we are able to gain from ALL eventualities, we dont have to guess the BOJ or FOMC outcomes since we have a LONG and a SHORT we have covered ALL eventualities. - Also from a vol perspective, GBPJPY risk reversals continue to become negative by a significant amount 1wks lost 0.6 to -2.1 (from -1.5), so investors continue to demand GBPJPY downside puts for speculation/ hedging - supporting the short. - USDJPY ATM volatility, sold off significantly with 1wks losing 3.55 to 12.45 - lower vol in UJ supports buying. *Any questions on why i think FOMC will be neutral-Hawkish or why BOJ will be dovish-easing please ask in the comments*

FADE THE GBP RALLY - GBPJPY & GBPCHF SHORT - 200 TO 300 PIPS TP Wanted to post a quick message telling people to sell the rally for 100-200 pips dependant on how quickly you get on the short.. Volatility is trading lower (as we expect in a rally) however it WILL pick up again/ reverse once it bottoms out - which i think is now! The trend for all GBP pairs is LOWER hence dont fight the trend with longs INSTEAD when you see GBP pairs in the green +0.7%-+1% look for good resistance levels to short. GBP is only going to extend lower in the long run with Lower inflation (yesterdays CPI print missed at 1.2% core and 0.2% CPI) and also as Brexit sell-offs continue - this is merely a recovery from the 5 days of losses so short at these levels is a high probability low risk trade - short it whilst the volatility/ price trades expensive IMO. Prices above 151.5 are the high probability/ lowest risk shorts possible, if we see 1.522 that is the high of the week so I suggest going 8/10 short at these levels for more than 300 pips to 1.492 low. The reason I like short GBPJPY and GBPCHF is descibred in detail in "relative value" posts attached to this one!

RELATIVE VALUE: BEST EXPRESSION OF BREXIT - GBP VS USD, JPY, CHF An analysis of which LONG has the best value against the short GBP to play the Brexit. [ - GBPUSD has a target handle of 1.385. - GBPJPY target handle at 1.483. - GBPCHF target handle at 1.335 . - IMO currently i rule out GBPUSD short, as USD doesnt have the same "risk-off" demand as CHF and JPY. Also USD and GBP economies are perhaps the most highly correlated, both economically and politically out of the pairs hence Brexit downside may/ will spill over into USD uncertainty also and may cause a lack of USD demand relatively to the unlinked regions of JPY and CHF. Not to mention GU has moved 400-500pips lower (the most) in a week and short liquidity is getting tighter - i think momentum is slowing in this pair - it isnt making any lows. Also at 1.41 there is little interest to get short/ for new shorts to be added as we near the all time low handle at 1.38 - hence JPY/CHF denominations which arent at all time low levels are better expressions of downside GBP. - I think a dynamic and better way to play the BREXIT vote is using a long CHF or JPY denominator as you get a "two-way" short. e.g. investors will be actively buying JPY and CHF to hold a risk-off asset, that hedges against volatility/uncertainty/risk that the Brexit possibility holds (even more so if polls continue to become more skewed to a Leave vote - Guardian recently posted 55% in favour of the leave) - thus by denominating CHF or JPY you benefit from the demand momentum AND the Supply momentum of everyone wanting to sell/get rid of GBP as uncertainty and perceived risks/vols increases. - Therefore, Given the further 300pips of downside available in GBPCHF downside (300pips) relatively to JPY (100 pips) it has some way to to fall yet - especially once investors begin to realise JPY is an over expensive risk-off asset, they will demand CHF more as the next best/ cheapest way to hold safety AND GBP downside. - Also, since Sunday night short GBPJPY has performed twice as well as GBPCHF (2x as many pips lower - however this means that now GBPJPY is becoming oversold so we should choose short GBPCHF now). The GBPJPY 2x move lower vs GBPCHF is unsurprising as historically investors seek JPY first, until long liquidity tightens (overpriced) then they seek CHF as the next best alternative. However it is important to note, that in most high risk occasions, at the point of the event CHF and JPY eventually end up at the same levels e.g. it is a time horizon difference, JPY isnt necessairly better than CHF in the long run, JPY just receives liquidity BEFORE CHF, but not more than CHF in the end. - Illustrating this - GBPCHF has lost the LEAST to date in pips compared to GBPJPY and GBPUSD over the last while - hence why currently GBPCHF is the best short/ has the most pips available to short. Thus assuming you have missed the short GBPJPY I advise now adding GBPCHF short as we have 300 pips until the nearby handle at 1.338 (rather JPY only has 100 pips to the handle at 1.483). -Also one other element to note, is that EUR pairs e.g. EURJPY and EURCHF are also relatively cheaper than GBPJPY and GBPCHF - short EUR numerated shorts are also the next best/ next most valuable shorts after GBP numerations. Hence - imo once GBPCHF reaches the handle at 1.335 I will be looking to short EUR numerations as they are still relatively cheaper (The demand is for GBP as GBP is the most sensitive), however short EUR is the next most sensitive numerator as the EUROZONE is the next most affected ccy, since the UK EU Referendum directly impacts Euro area economy. Volatility demand: - Also not to mention GBPJPY and GBPCHF 1wk and 1m risk reversals in the long run are becoming negative at a higher rate/ momentum compare to USD e.g. investors are buying GBPJPY and GBPCHF Puts at an increasingly faster rate than GBPUSD puts (the change of the RR values are increasingly negative more than the GU - The GU RRs are almost already fully priced). Hence we are no

PRICE ACTION ANALYSIS - GBPUSD: SCOTTISH UK VS UK EU REFERENDUM This article compares the price and technical analysis of GBPUSD in the 10-weeks leading into the two events in order to gain an execution-able advantage going into the UK EU Referendum taking place on the 23rd June 2016. Price Action and Trends Scottish UK REF - 10 weeks = 14.July.14 to 18.Sep.14 - The first 8 of the 10 weeks GU traded extremely bid, selling off 1000pips from 1.7000 to 1.6000 . GU failed to make any significant recoveries during this period - signifying an extremely strong down-trend. - at the end of the down trend and coming into the REF, GU recovered 40% from 1.6000 on the 9th Sep, to 1.64000 on the 18th Sep (event vol highs at 1.6580). The sell off the proceeded to continue after the event, selling off back to 1.5900 by week 12/13. - Price action remained significantly below the 50 & 20 VWMA throughout the 10-week period and after the event - confirming the strong down-trend. UK EU REF - 10 weeks = 18.April.16 to 23.June.15 - Since the bottom formed on 29th Feb at 1.3850, GU has been trading in an up trend, forming marginally higher highs and higher lows. However, the uptrend has turned into sideways action in the last 3-4 weeks as GU has failed to make new highs of any significance and is failing to make higher lows - and the high-low range is tightening. in the last 10 weeks GU has risen 330 pips from 1.4270 to 1.4500 close-close and has had a range of 600 pips - 1.4170 to 1.4770. In the last 5 Weeks however GU traded flat closed to close at 1.4500, with a range of 400pips 1.4340 to 1.4730 illustrating the tightening range, sideways movement and end to the trend - the market is sleeping and is waiting for a stimulus to break in a direction. - At the start of the 10 week period, Price bullishly crossed the 50 & 20 VWMA and has stayed above since, confirming an up trend. The 20 period, however, has been trading choppy, illustrating the low trend/ direction and the significant pull-backs. Comparisons 1. The Scot REF priced GU over 1000 pips lower in the 10 week period, in a decisive downward move - however, this UK EU event has failed to do anything similar and has actually done the opposite by rising in the last 10 weeks, currently trading up 300 pips. - Why? imo there is only 2 reasons why there has been such a big difference in the price action. 1. The reason GU isnt pricing downward is because GU already priced/ factored in Brexit uncertainty into the downside we saw between december 18th.15 to March 2nd.16, which took us from 1.5300 to 1.3800 which is a whopping 1500+pips lower - this was likely FOMC hike driven but given the extent of the move, it is highly likely that brexit was included in the price lower - hence why we are not seeing a move now - the UK REF is already in the price. 2. The less likely reason is that GU isnt pricing the move because 1). the market has been scared stiff by the uncertainty, and people simple arent willing to take risk either way thus explaining why price is trading flat/sideways. or 2) GU is planning on making a significant run to the downside in the next two weeks where it could shed 1000 pips if it falls back to 1.3800; or even 700 pips if it moves to 1.4000 which isnt that far off of the 1000pip Scot Ref move. The technical indicators are just mirror a function of price thus I will not read into the technicals much - obviously the Scot Ref indicators spent much of the time depressed since the price was falling rapidly, whilst the UK EU Ref has been mixed - since the price is trading sideways. *Look out for my upcoming article where i will discus what the above differences mean and what they imply price action will do in the next two weeks going into the UK EU Ref and FOMC.

PRICE ACTION ANALYSIS - GBPUSD: SCOTTISH UK V UK EU REFERENDUM 2 This article compares the price and technical analysis of GBPUSD in the 10-weeks leading into the two events in order to gain an execution-able advantage going into the UK EU Referendum taking place on the 23rd June 2016. Ranges Scottish UK REF - 10 weeks = 14.July.14 to 18.Sep.14 - GU started the period at 1.7000 and closed the period at 1.64000, with highs at 1.7150 and lows at 1.6000 with a range of 1150pips. - In the last 5 weeks (Aug.18th-Sep 18th) GU opened at 1.6730, closed at 1.6400 with highs at 1.6730 and lows at 1.6000 and a range of 730 pips - Close to open of 330pips - In the last 5 weeks (Aug.1st-Sep5th 5wk comparison) GU opened at 1.6877, closed at 1.6300 with highs at 1.6877 and lows at 1.6277 and a range of 600pips. - from week 10-13 GU shed the the Recovery/ No vote volatility gains, and traded from 1.6400 to 1.5900 with a range of 500 pips. UK EU REF - 10 weeks = 18.April.16 to 23.June.15 - GU started the period at 1.4270 and closed at 1.4500 - range of 600 pips - 1.4170 to 1.4770. -In the last 5 Weeks (5wk comparison) however GU traded flat open to close at 1.4500-10, but with a range of 400pips 1.4340 to 1.4730. Comparisons In general, the Scot Ref traded/closed much closer to its ranges than the UK EU Ref has to date e.g. in the "comparative" last 5wks, Scot Ref opened at 1.6877 (which was its high also) and closed at 1.6300 (only 30 pips from its range low at 1.6270) so GU ate 570/600pips of its range - illustrating that the Scot Ref had much more directional bias since it traded and held its extreme levels. Where as the UK EU Ref comparative 5wk period, opened at 1.4500 and closed at 1.4510, but with a range of 1.4340 to 1.4730, so GU only managed to eat/commit to 10/400pips that it ranged - illustrating that the UK EU Ref has lot direction commitment and 0 trend, it is a sideways ranging market. Technicals Scottish UK REF - 10 weeks = 14.July.14 to 18.Sep.14 - RSI, STOCH and RVI sold off in the first weeks of the 10wk period, then remained severly under pressure for the remainder of the 8wk sell off - all of which failing to break 40 and posting lows of 13 with several <20s. The event driven recovery between the 9th sep to 18th sep however helped the technicals recover to 50 levels. - Historical vol, traded in an uptrend during the first 8wk selloff from 2 to 11, before falling slightly during the recovery and spiking again to 10-12 around the REF date due to event volatility. UK EU REF - 10 weeks = 18.April.16 to 23.June.15 - RSI and RVI have been bullish, trading in the upper 60% all of the time, with several "overbrought" conditions arising at 70. - Historical vol has traded relatively flat, ranging between 6-12 with it ticking up in recent times to trade above 10 on most days now. - Stoch oscillated throughout the period, with a bias to the downside, showing two oversold conditions of <20, illustrating the bullish trend as it was the little pullbacks that caused these conditions. * See the first article in this series (linked to this article) *Look out for my upcoming article where i will discus what the above differences mean and what they imply price action will do in the next two weeks going into the UK EU Ref and FOMC .