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Short AUD/USDFundamentals:- The RBA will be making there rate announcement next week which is not expected to change. There is concern over the levels of consumer debt at the moment and lagging GDP. I expect the AUD to weaken against the stronger USD next week especially after the stela NON Farm Payrole figures on Friday. Technicals:- There is an nice area of confluence between 7593 and 76020 which is looking like the point we might see a reversal from the Friday short squeeze. The fibanacci retracement at 50% is also at this level for the 4 hour chart. sell 7593 stop loss 7630 take profit 7450
Short
by FreeForexSignals4u
Short NZD/USDFundamentals:- We had a crack at this one last week but it ended up just consolidating. This week we are looking to the NZ financial stability report and the NFP to bring in some much needed volatility to get this currency pair moving. Looking at the macro prudential tools that the RBNZ use to base there report I can see that the economy is static or drifting off in most area's. The biggest concern is the Credit to GDP ratio which is dragging inflation and any chance of a rate hike in the future; this translates into a weaker NZD. The estimated figures for the NFP are looking good and with the FOMC looking at a possible hike at the next meeting further downside in this currency pair can be expected. Technicals:- The price found resistance at 6950 which was last weeks entry point but has since tested that again. A possible fake breakout caused by short selling could push the resistance level up to the 7000 level which is going to be my next entry level. Daily, 4 hour and 1 hour charts are indicating over bought so a turn down could be imminent. Sell limit:- 7000 stop loss :- 7050 take profit:-6850
Short
by FreeForexSignals4u
Short NZD/USDFundamentals:- We have retail sales out from NZD tonight at 11:45pm so the markets will just be open in time. Depending on the figure will depend on where we enter this trade it might be that the market even opens lower than it closed in anticipation of the data. Expecting the USD to continue strengthening into the week next week certainly against the weaker currencies. Technicals:- Just looking for basic support and resistance on this one a push up to 6940 or 7000 would both be good sell levels. Sell limit 6940 / 7000 stop loss 7050 take profit 6800
Short
by FreeForexSignals4u
Long USD/CADFundamentals:- After the CPI readings from Canada last week I am expecting a continuation of this turn around. As the currency is commodity linked to WTI crude, which was the main driver in strength for the Canadian dollar last week, The WTI price seems to be lacking any more upward drive. Also the US is still expected to raise rates further as the average hourly earnings increases even though the NFP figures where a little lack luster. Technicals:- The head and shoulders breakout last week came through nicely but as we reverse on that trend we expect to see the neckline retested as resistance. If it breaks we could see a retest of the shoulders and the head. Check out the linked chart to see the head and shoulders pattern. and visit the main website at BOAFX to get the full analysis
Long
by FreeForexSignals4u
Short GBP/USD Fundamentals:- We had quite a turmoil last week with the trade war possibilities and then at the weekend with the strikes on Syria. I was up in arms about what to trade this week when I realised the Retail sales figures for the US on Monday are expected to come in much better than previous. Not only that but the strikes on Syria are supposed to be a single message to discourage Syria from using chemical weapons and not a sustained attack so there might not be as much of a market reaction as first thought. We do have weakly earning from U.K. which are expected to rise however it could just be a reaction to the minimum living wage going up so again not much more strength for the GBP which I think we are due a pull back on. Technicals:- On the daily chart we have a double top at 14300 which if broken could see a further rise to 14500 especially as the current daily Oscillator is showing over sold, However in line with Fundamentals, I am expecting a bigger pull back on the recent long position. A breakout of last weeks pivot point could see 14000 retested. If you want the full stop loss, take profit and in depth analysis then visit the website boafx
Short
by FreeForexSignals4u
LONG DXY / USD: HAWKISH FOMC RATE STATEMENT - SEPTEMBER HIKE?The FOMC rate statement was largely in line with expectations and to the hawkish side - with a september hike hinted at. Much of which followed the rhetoric of FOMC members in the past few weeks (see previous posts) and data (disregarding the poor -4% durable goods mom print). Perhaps the most hawkish/ promising statement made for a Sept rate hike was the fact Fed George Preferred to Raise Rates to Range Between 0.50% and 0.75% - hinting hikes are now being considered. And "Fed Could Raise Rates Later This Year, Possibly As Early As September". Though on balance the Fed did repeat the dovish phrases "low/soft" several times when regarding various measures of inflation and business investment. This FOMC Statement holds in line with my medium run long $ view (hike based) - especially against Yen, GBP, EUR, AUD and NZD who are expected to ease and thus policy diverge. In terms of market pricing, the Fed Funds Future Option implied probabilities of a rate cut have continued their steepening this week - following the 3wk trend with Sept/Nov now pricing a 25.9/ 26.8% probability of a hike (up from 9% 2wks ago) - Dec now has a probability of 41.8% and is showing some stability here, with a 50bps hike implied at 9.9% and rising steadily. From this the implied probability of one rate hike in 2016 is at nearly 70% (Nov+Dec) - which imo is in line, or slightly below my qualitative probability of 90%. With the probability of 2 hikes at 12.5% which is about what i would expect. Nonetheless eyes are now focused on BOJ - which is expected to be a year changing meeting. September FOMC Rate Decision Statement - 0.50% unchanged: --Fed Leaves Policy Rate Unchanged, Says Near Term Economic Risks Have Diminished -Fed Offers More Upbeat Assessment of Labor, Economic Conditions -Fed Could Raise Rates Later This Year, Possibly As Early As September -Federal Reserve Keeps Fed Funds Range Unchanged at 0.25% to 0.50% -FOMC: Voted 9-1 For Fed Funds Rate Action -Fed Leaves Discount Rate Unchanged at 1.00% -Fed: Economic Activity Expanding At A 'Moderate' Rate -Fed: Labor Market Strengthened, Job Gains 'Strong' in June -Fed: Payrolls, Other Indicators Point to 'Some Increase' in Labor Utilization in Recent Months -Fed: Market-Based Inflation Compensation Measures 'Remain Low' -Fed: Survey-Based Inflation Expectations Measures 'Little Changed' -Fed: Inflation Expected to Remain Low in Near Term -Fed: Inflation Expected to Rise to 2% Over Medium Term As Transitory Effects Fade -Fed: Household Spending Has Been 'Growing Strongly' -Fed: Business Fixed Investment Has Been 'Soft' -Fed Continues to Expect 'Only Gradual Increases' In Fed Funds Rate -Kansas City Fed's George Dissents On Fed Policy Action -George Preferred to Raise Rates to Range Between 0.50% and 0.75%
TVC:DXYLong
by QuantumLogicTrading
4
DXY/ USD: FOMC - GS 65% 2016 RATE HIKE; RABO ONE 2016 RATE HIKEGoldman Sachs on July FOMC Decision : - The run of positive economic news in recent weeks has coincided with generally dovish comments from Fed offcials. Policymakers have indicated that they are not “behind the curve”, and have expressed increased uncertainty about the neutral level of interest rates. We would treat recent comments with caution, however, as we have not heard formal remarks from the Fed'€'s leadership. - Taken together, we see recent economic data and the public comments from Fed officials as consistent with only modest changes to the FOMC statement. We think the committee will upgrade its discussion of the labour market and measures of inflation expectations, but change little else. The period between the July and September meetings will include a number of important data releases as well as the annual Jackson Hole conference. Therefore, policymakers will have an incentive to keep their options open, and plenty of opportunities to guide market expectations, should they need to. - We continue to see a 25% chance that the committee will raise the funds rate in September and a 40% chance that it will do so in December - implying a roughly two thirds probability of at least one rate increase this year. RaboBank on July FOMC Decision: -While the Fed is in a wait-and-see mode to assess the threats to the global outlook and the strength of domestic momentum, recent US data have boosted the Fed;€™s confidence. We expect the Fed to squeeze in one rate hike before the end of the year, most likely in December.
TVC:DXYLong
by QuantumLogicTrading
LONG DXY/ USD VS GBP: HAWKISH FOMC LOCKHART SPEECH HIGHLIGHTSFOMC Lockhart was the 4th Fed this week to imo be relatively Hawkish with his words, most notably reinforcing with the others brexits near-term stability saying "Doesn't Expect 'Brexit' to Have Near Term Impact on Economy" and " So Far 'Brexit' Reaction Largely Orderly". Most interestingly though was Lockharts view on the FOMC's positioning for future rate increases, saying "Won't Rule Out Two Rate Rises This Year" - which is extremely hawkish given most expect 1 at the most.. Back up this sentiment by insisting that the Fed is "Fed Not Behind Curve, Has Time to Decide on Next Rate Move". Nonethless Lockhart did somewhat contradict his "rate expectations" by saying "Time for 'Cautious and Patient Approach' to Rate Policy" which surely shouldn't be the case if 2 hikes are coming - that would be on the aggressive side. All in all, Lockharts comments go hand in hand with my Bullish medium term USD/ DXY view (see previous articles) - I like the USD vs EUR, JPY, GBP, AUD, NZD in the medium term so long DXY/ USD is favoured, even more so if 2 rate hikes were to be realised this year. At current levels short GBPUSD is my favourite expression FOMC RATE HIKE IMPLIED PROBABILITIES - On the likelihood of rate increases, in the past 24 hours, from the Federal Funds Rate implied probability curve we have seen rates/ probabilities firm after yesterdays "risk-break" recovery, with a 25bps September/ Nov hike steepening to 17.2% from 11.7%(Wed), and Dec setting new highs at 35.9% from 29.5% (Wed) - Dec also went on to double the probability of a 50bps hike to 5.1% vs 2.8%(Wed), giving Lockharts comments some weight. FOMC Lockhart Speech Highlights: -Fed's Lockhart: Fed Not Behind Curve, Has Time to Decide on Next Rate Move -Lockhart: Time for 'Cautious and Patient Approach' to Rate Policy -Lockhart: So Far 'Brexit' Reaction Largely Orderly -Lockhart: 'Brexit' Will Increase Long Term Uncertainty -Lockhart: Doesn't Expect 'Brexit' to Have Near Term Impact on Economy -Lockhart: Bond Market Yields Largely Reflect Flight-To-Quality Buying -Lockhart: Too Soon to Say 'All Clear' for Financial Markets -Lockhart: 'Brexit' Not a 'Leman Moment' -Lockhart: Still Expects U.S. to Grow by 2%, Expects More Job Gains -Lockhart: Economy is 'Performing Adequately' -Lockhart Says Fed Has Time to Decide on Next Rate Move -Fed's Lockhart: Presidential Election May Be Boosting Economic Uncertainty -Fed's Lockhart: Won't Rule Out Two Rate Rises This Year
TVC:DXYLong
by QuantumLogicTrading
SELL EURUSD/ LONG USD, DXY: HAWKISH FED GEORGE SPEECH HIGHLIGHTSIMO FOMC George was largely bullish/ Hawkish $ on the margin; surprisingly coming out and stating for one of the first times that "Fed rates are too low" and "Not Raising Rates in June Was Due to Timing Issues" - these two statements imo hint that a hike coUuld be on the cards earlier than perhaps was expected (Dec), in-light of his opinion of them being too low and that the missed June hike was merely due "timing issues".. could these timing issue be corrected in July? Unlikely given the Brexit result (likely if the vote was bremain), but nonetheless this was more than encouraging. On the wider economy George remained upbeat, highlighting last weeks NFP report as "welcomed news", and in the medium term reaffirming that "pace of job market growth has been notable" and "economy nearing full employment. The only downers were his comments regarding business investment which he said was "weak" but after went on to assure that "outside of energy, business investment levels were better". Further, he cited that brexit issues were "longer run" uncertainties that the FOMC will watch. Federal Funds Rate Implied Hike/ Cut Probability curve updates: On the back of the strong 100k+ beat NFP print last week, going into this week we have seen an aggressive steepening in the Fed Funds implied prob curve across the tenors; Fridays steepening trend has continued into this week, where now a September/ Nov Hike trades at 12%/11.8% vs 5.9%/5.9% on Friday and 0%/0% on Thursday, with a Dec hike trading at 29.6% vs 22.5% Friday. - This aggressive steepening, especially in the front end (where probabilities have doubled), is likely a function of FOMC member Georges Hawkish comments today, the NFP print and the aggressive recovery in risk across the board in the past few days which have all collectively improved confidence, which in turn has eased sell-side pressure on UST rates - today 10y UST rates have managed to trade 4.4% higher on the day (tnx), with 30y yields also up +0.95% - this is the first real break of downside pressure we have seen in rates for the past month. Trading strategy: 1. The above combined has helped my broad long $ view with my favourite expressions short term being in NZD$ and AUD$ downside (See attached posts). In the medium term, EUR$ and $JPY dollar upside are my favourite trades for the risk-on element that will readjust the USD higher in the backend of this year (see attached posts); And the Monetary policy divergence + brexit uncertainty that should bring EUR$ to a lower equilibrium in the future also. Alternatively, this view can be aggregated as pictured into a long DXY play, where imo, it trades 3-4% below equilibrium - index should be near 100. FOMC Member George Speech Highlights : -Fed's George: June Jobs Data Was 'Welcome News' -Fed's George: U.S. Economy Has Proved 'Resilient' -Fed's George: Expects to See 'Fairly Steady Pace of Growth' -Fed's George: Consumers Strong, But Business Investment Weak -Fed's George: Outside of Energy, Business Investment Levels Better -Fed's George: Pace Of Job Market Growth Has Been Noteworthy -Fed's George: Economy Close to Full Employment -Fed's George: Labor Market Recovery Not Evenly Shared by Workers -Fed's George: Labor Pressured by Loss of Middle Skilled Jobs -Fed's George: Fed Policy Limited in Role For Long Term Labor Trends -Fed's George: Fed Rates Are 'Too Low' -Fed's George: Fed Should Raise Rates Gradually -Fed's George: Not Raising Rates in June Was Due to 'Timing Issues' -Fed's George: Brexit Issues Are Longer Run Items to Watch
Short
by QuantumLogicTrading
3
USD/ DXY: FOMC DUDLEY & WILLIAMS - BREXIT & US ECONOMY SPILLOVER1. IMO Dudley tipped to the dovish side, especially on key inflation highlighting that it is " rising again, but still low". Other rhetoric reaffirmed much of what has been said post the brexit vote e.g. Uncertainty being the biggest factor. 2. Meanwhile, Williams was notably more upbeat/ optimistic, shrugging off the US's shock miss NFP report to instead point out that the underlying trend remains upward. He also relatively underplayed Brexit by saying his baseline view is that it will have a "modest impact" vs Dudleys sitting on the fence of "too soon to say". Further, Williams went on to underplay Brexit as a "normal global economic uncertainty". 3. Nonetheless, both found common ground regarding the "Uncertainty" surrounding the Brexit US spillover effects and "data dependency" being key for FOMC decisions. This has been the case not only between the two today but also for several members in the past few weeks/ months. 4. USD now looks to FOMC Minutes from the June Meeting for any further hints of net member direction and NFP on Friday. I expect much of the same, with bias to Dudley's more cautious/ dovish approach likely to underlie the Minutes but hopefully an outstanding NFP report to spur the USD. 5. The 30-day Federal Funds Rate futures market sold-off Fridays Hawkish gains today, with the Implied Probability of a 25bps FOMC rate hike significantly flattened across the curve, with a Sept/ Nov Hike now at 0% vs 5.9%, Dec at 13.7% vs 22.3% and Feb 2017 at 13.4% vs 21.8%. We also saw a dovish skew across the tenors in favour of a 25bps cut, with Sept/Nov probabilities increasing to 2.4% vs 2.2% Sept and 4.4% vs 2.2% Nov. July expectations traded flat at 97.6% no change. 6. Nonetheless, it was William's bias that won the day as DXY Traded well offered, up 66pips at 96.21, much of which driven by the risk-off turn markets have taken, sending USD higher across the board, most notably against the antipodeans (RBA driven), CAD (oil 4% lower) and GBP (down 2%) as BOE Gov Carney continued to provide dovish sentiment. Also imo earnings season $ demand may have started to price the index higher. 7. Going forward I expect to see continued USD strength across the board as GBP, the Antipodeans, CAD and JPY are likely to realise weakness on the back of poor economic fundamentals, brexit, and further oil falling (global growth worries - brexit/ china linked). Also I expect BOJ easing to price UJ higher in the near future which, all in all, should provide the perfect environment for a higher DXY and USD especially against JPY, NZD and GBP over the next 4-6wks for the attached reasons. End of week DXY should close up 3%+ if NFP comes in firm/ strong - 98.5 target Dudley on US Economy: - Dudley: Brexit Main Uncertainty, Too Soon to Say Impact Yet - Dudley: Investment in U.S. Also an Uncertainty - Dudley: Inflation Is Rising Again, But Still Low - Dudley: Fed Policy Remains Data Dependent - Dudley: Uncertain Outlook Means Can't Predict Fed's Next Move Williams on Brexit: - "I think the economic effects, on the baseline scenario, are relatively modest, but there still is the uncertainty about how things are actually going to play out," - "I would say that what's happened with Brexit has been just one of the normal uncertainties that always occur in the global economy and things that we just have to take into account," - On the poor US Jobs Report - "the underlying trend continues to be good, continues to be above trend and continues to show that the economy is strengthening and not weakening,"
TVC:DXYLong
by QuantumLogicTrading
BREXIT AND GEO-POLITICAL AFTERMATH: BUY USDJPY - HOW TO TRADENow that the Brexit risk has been realised the mentioned pairs above will share some correlation this week as the market changes between risk-on and risk-off as MANY on the events continually drive the sentiment shifts. My Plan & Expectations USDJPY 1. My conviction for UJ is long 8/10. -UJ traded to lows of 98.9 in the midst of the brexit hype, as the market hunted for risk off. Further, as with GBP it seems entities over the weekend have increased their JPY exposure to account for the increased percieved risk within the market causing UJ to open lower at 101.6 - However, over the weekend the BOJ had a meeting with other Japanese officials to discuss their plan (an easing plan likely) to combat 1. their inflation problem and now 2. the JPY's safe haven demand strength - both of which are cured by 8/10 aggressive easing policies by the BOJ - Thus I expect the BOJ to hold and emergency meeting this week announcing these changes to have immediate affect as UJ at 100 severely puts the brakes on their inflation growth target. - Further, as previously mentioned the BOE, SNB, FOMC and ECB (among others) have all said since the brexit vote that they are prepared to provide liquidity to markets and their rhetoric has been very dovish. - Thus the BOJ's new easing package which is likely to be aggressive e.g. 20bps rate cute and a large increase QE, will help depreciate the currency through increasing supply and reducing jpy demand. Further, the supportive/ dovish stance of the worlds central banks (particularly BOE and FOMC) will help ease risk aversion which in turn SHOULD reduce JPY demand therefore helping UJ trade better to the upside. So my trading plan for UJ is to buy at levels <102 - 101/2 is ideal (we are unlikely see 99 or 100 again as the risk-off impetuses have died). UJ should hold this range between 101.2 and 103 until CB meetings are in place - I will be holding UJ in the long term through to 110-115 at least. I have 8/10 long conviction for UJ Volatility update: Current UJ ATM 50 delta vols trade at 37.5%, which is surprisingly 3-4x higher than it was last week (the risk and volatility may not be over). 1wk UJ ATM 50 delta vols trade at 20%, significantly lower than current at 37.5% - I think this is a function of the central bank meetings expected this week which are inflating current volatility, with 1wk far vols lower as the events will have elapsed already. 1m UJ ATM 50 delta vols trade up on the week at 15.5% though the time curve is flattening meaning UJ vol is falling over time - lower vols = better conditions for UJ buying. Current UJ Option demand is skewed significantly to the downside, with Puts 40% vs calls 36% thus puts are in demand by about 10% more than calls - this supports nearterm risk-off views (RR -4). USDJPY as a measure of market risk. I still suggest using UJ as a measure of GBPUSD market risk - the volatility seemingly isnt over, and with near term uncertainty high, it is prudent to track UJ and use breaks of its 101.2-103.2 range as signals of net risk on or risk-off commitment .e.g. UJ higher risk on (jpy selling), UJ lower risk off (jp buying). The risk off move for GU imo is lower in this environment, and the risk-on move is higher. Thus, IMO UJ and GU are sync'd, and the two should be used as a tool.
by QuantumLogicTrading
1
Short AUD/USD Fundamentals: - The Australian economy has continued to show strength certainly more so than its counter country New Zealand. Although the commodity prices figure has shown growth in the past year we are still in negative growth. The Caixin Manufacturing PMI in China came out better than expected but the high wage growth shown in the NFP on Friday should dampen the rally a little. I would expect a sizeable pull back next week as the Non Farm Payroll figures set into the markets. Technical's:- At the moment there are no clear technical signs that this downtrend will continue so we are basing our trade on the natural movement of the markets but will be looking to move to break even as soon as we clear 20 - 30 pips profit
Short
by FreeForexSignals4u
EUR/USDFundamentals: - As expected the additional QE fell short of what the market would have liked to have seen and caused a substantial rally after the initial announcement. We think this rally is unjustified under the current monetary policy divergence between the Euro and the USD and still expect to see parity by the end of 2016. We will be looking for a return to the downside next week. Technical’s: A very volatile price action on the euro at the end of the week, as we rejected the daily lows and the 2 significant support levels at 11100 and 11000, price also formed a higher low on the weekly signalling further upside however the weekly 50 ema has not been rejected or cleared as we once again look for the euro to make reject higher prices or make a lower high in which case we’ll be able to sell further. learn to trade like a pro for free bankonadam.com
Short
by FreeForexSignals4u
Long USD/CADFundamentals: - Mixed data from Canada last week with a tick up in unemployment and worse than expected employment change. However the rally in Oil did help the Canadian strengthen for a period of time last week. I don’t think the Canadian can maintain a positive rally, once the data starts to be absorbed by the market we should see this pair return to the upside one again. Technicals: This pair along with the pound is setting up to be a great trading opportunity. Besides the fact that fundamentals suggest further bull power, the technical’s come in supremely. The weekly closed as a pin bar rejecting the lows of 13600 and even 13800, these prices where the bottom prices on which we predicted a reversal to the upside couple weeks ago. On top of the pin bar we have a weekly 50% Fibonacci pullback and rejection from the 12800 swings lows from where price started trending heavily upward, lets couple that with a daily that formed a pin bar as well and a bullish engulfing that closed on the last day of the week and we have a nice recipe for high probability long trades. The trading plan in this regard is simple, we wait for a higher low in intraday to get in long at a better price or just take a trade with a larger stop loss on a new high. Want to know more about how I trade? take the free course bankonadam.com
Long
by FreeForexSignals4u