Get started

Powell

ridethepig | EUR Market Commentary 19.01.2021📌 ridethepig | EUR Market Commentary 01.19.2021 We should strategically protect our position, not a sickly stop or weak-looking exposure, etc. As you can see, the bids at 1.207x held and buyers as widely expected fought like a lion to defend their jurisdiction. This was not the act of Christian kindness or pity or etc, this is a strategic point that required defending from the outflows. The strength to pull back above our 1.212x pivot shows that buyers are functioning as normal, while sellers are licking their wounds and covering quickly. How to get rid of our opponent? A break above the 1.222x via a more dovish than anticipated Yellen today will get rid of any remaining sellers and force 'confidence' back into the spotlight. This will not receive tender treatment as it always comes down to the same situation: It always comes down to the same situation; a central bank which could be called sound, but which has one sickly component. As we all know by now, the longer the delay in USD devaluation from Fed, the worst the blow is going to be in Equity markets and one way or another eventually this is going to look like Fed has been financing the WhiteHouse and then the game is up. Confidence will send capital fleeing. Here eyeballing a test of 1.222x first before 1.230x. While invalidation or reassessment will be required should we breach the current floor Thanks as usual for keeping the feedback coming 👍 or 👎
Long
by ridethepig
9
ridethepig | EUR Market Commentary 18.01.2021📌 ridethepig | EUR Market Commentary 18.01.2021 Here to kick the week off with the first moves we have buyers choosing to defend the 1.207x bids, protecting the support level and relieving the channel structure of this duty so that it can become a bit more appealing possibly for a slingshot. The next moves higher in EURUSD can be the start of a swing that cracks the 2018 highs. Yearly Eurobonds Sellers have missed the proper moment to get in contact with the stops below the support. If the position were with Pound, on the other hand, the win for buyers would be much more difficult, whereas now euro follows on its own logically defined map. UK is at the heart of the matter of fundamental impacts around Brexit, the euro will be considered a stepping stone for UK outflows as sharp speculators and large macro hands evacuate through the flanks to avoid getting caught up with BOE -ve rates. To the topside 1.212x remains a 🔑 pivot level with initial targets found above at 1.222x and 1.230x while invalidation comes from a sustained breach below support. Thanks as usual for keeping the feedback coming 👍 or 👎
Long
by ridethepig
12
Gold - A Major TestGold prices fell heavily last week as US yields climbed above 1% on the back of the Georgia election results. With the Democrats having secured an unlikely blue wave, Joe Biden now has the platform to deliver on some of his more ambitious priorities, including a massive stimulus plan. The President-elect is due to outline plans as early as today, with reports suggesting he will push for a $2 trilllion stimulus package. The worry in the markets then being its impact on inflation, bond purchases and interest rates, hence the moves in yields. Fed policy makers have been trying to ease these concerns this week and have succeeded to some extent but with the 10-year still above 1%, there's still clearly some work to do. Should policy makers fail to alleviate these concerns, we could see a very significant breakout to the downside in gold, breaking below the 200/233 SMA band which has been key support since breaking above it back in December 2018. Combined with the rejection of the 61.8 fib last week, it would be a bad warning signal for the yellow metal.
OANDA:XAUUSD
by OANDA
6
ridethepig | Rate Differentials 📍 A quick update here on the elements of EUR and USD Ending the 'C' part in the swing down has been a hard struggle and with such a problem a surprising retreat is expected. Buyers are threatening to bottle up their opponent. A pullback in EURUSD towards 1.15/1.14 will make things a lot easier: Inflation is demanding a return, after sufficient preparation, watch out on the battlefield (see my explanation in the recession strategy). The other theoretically plan of attack is a flank attack in USD which must be nipped in the bud via FED but they will lag behind now. Real money understands the point behind this move. Firstly, the test of 1.70 is starting to be considered from the point of view that the current block is settled to the topside. As usual thanks for keeping the feedback coming 👍 or 👎
TVC:US10YLong
by ridethepig
6
DIS 12/21/2020 LongDIS gapped up on heavy volume over a significant level that it was bumping up against & has spent six days digesting these higher prices. I bought a half-sized position on Monday (12/21/20) when the market gapped lower due to a new COVID strain mutation in the U.K. I believe that the market is over COVID & has been for some time. Unless there is a negative development on the vaccine front, Pumpin' Powell is going to be able to continue inflating the asset bubble. The DIS pullback also coincided nicely with a bounce off of the 9-day EMA. My initial stop is below the low of the gap-up day. I'm looking to add larger size on a break of Monday's highs circa $172. I would also be willing to add on a false break & quick reclaim of Monday's lows, at which point I would move stops up to just below the false break.
NYSE:DISLong
by apaqu
ridethepig | JPY Market Commentary 18.12.2020📌 @ridethepig G10 FX Market Commentary 18.12.2020 What was the point in BOJ meeting overnight? Finally extensions of the handouts coming from the Japanese base, and remarkably the 103.0x was rescued via lack of conviction from macro players to chase it lower. Buyers now can play the break, undoing their opponents work and imagine the test of 105 as being important for the yearly close flows. This iteration of dollar strength will be most visible in GBPUSD and USDJPY - choppy conditions seem appropriate. Here we are tracking this rather technical move. I am looking firstly for a move towards 105 resistance, followed by a zag to fade back towards 103.5x which is a 300 tick round trip. Thanks as usual for keeping the feedback coming 👍 or 👎
Long
by ridethepig
1
Gold finding a floor - finally?📌 @ridethepig Gold Market Commentary 16.12.2020 The moves in Gold have been excellent to track this year because of the tendency to put turning points around the Central Banks. This of course seems very appropriate. The 'infamous' loading zone has allowed us to pick the low hanging fruit, now things are going to start getting a bit trickier from a positioning perspective. I am certainly holding longs and will become a player of the momentum break today above $1,875. How far Fed is from reality and certainly equity markets too is remarkable, carrying out a quick review of the flows we are way out of the $1,803 support which is the one we were tracking earlier in the year. In any case, it is clear that the direction is long and with the Fed support essential - we should not suffer in the least. Buyers are aiming for $1,960 and $2,075 extension targets. Thanks as usual for keeping the feedback coming 👍 or 👎
FOREXCOM:XAUUSDLong
by ridethepig
23
ridethepig | CHF for the Yearly Close📌 CHF for the Yearly Close An excellent swing move, which is extraordinarily difficult to spot. You should note that what has played out has been completely carefully controlled and exclusively on the FED side. Whereas SNB have been seeking salvation against the inflows, the USD cycle is playing out by default and monetary error more than anything else. You cannot solve a monetary issue with private debt by issuing more private debt. As we know, the flows which have dealt considerable damage to buyers can constitute a good criteria for the evaluation of the next pivot level in play at 0.870x. There is no way to avoid the test, buyers need to be careful not to get hemmed in as a breach will threaten a -10% sweep which is what I am eyeballing for 2021. Switzerland will act as a suitable haven; SNB will threaten to gain time but only making the breakthrough harder in my opinion. Not the most technical of charts...shows the levels we need to exploit and when broken, advance the units and swing the bat. Thanks as usual for keeping the feedback coming 👍 or 👎
Short
by ridethepig
ridethepig | Aussie for the Yearly Close📌 AUD for the Yearly Close It seems a good choice of the moment to also progress with the Commodity Currencies next, the characteristic of the next macro themes are going to be coming from shortages on supply side and we can dissect how to configure that into currencies and in accordance with the previous diagrams. AUD has freed some space above for the coming months and quarters, the 0.813x initial target is interesting to note how the opportunity for capitulation of sellers arises, the breach will unlock the 'inverse' of a waterfall concept that we are now discussing in USD; With enormous complications for commodities coming, after a few more mistakes from politicians, AUD will be one of the main winners in the moves. In the next flows, 0.950x and 1.097x are clear extensions but until we can crack through the 0.813x soft resistance are only considered skeletons in the closet for now. Thanks as usual for keeping the feedback coming 👍or 👎
Long
by ridethepig
4
ridethepig | Dollar for the Yearly Close📌 Dollar for the Yearly Close Now comes the dollar complex which we have covered several times - the artificial devaluation which we were tracking in 2019 has arisen: Dollar bears now have a good position, because it is looking highly unlikely that Trump can pull this off now and manage to force a stop to the artificial devaluation. This somewhat clumsy move of a Biden/Harris WhiteHouse alongside a GA senate flip which looks cooked to come in January - will expose badly the USD and nothing will be able to prevent it from hanging on. The struggle to control a private debt problem by issuing more private debt is a serious mode for the birds. ...Monetary policy, or better said, Keynesian economics has the difficult task of proving its worth now: For USD the chance of setting up a counter attack of the highs is diminishing on all wings. As we are seeing, frequently the 90.0x handle has been difficult to crack, so it is clear that we need to pay attention to a breakdown here as it unlocks the possible momentum force towards the nearest support at 77.8x. Another extremely violent example of capital outflows looks around the corner for the U.S in 2021. Thanks as usual for keeping the feedback coming 👍 or 👎
TVC:DXYShort
by ridethepig
6
ridethepig | CHF Market Commentary 03.12.2020Another interesting play where buyers can win the flow. So, the idea to outguess a temporary floor in USDCHF is correct as we are approach very 'rich' levels for sellers. If buyers are going to have a late breakfast 0.890x is the level to load. Another few pips down and it would be difficult to defend because of the horizontal support. For those that remember the previous attempt we are tracking exactly the same attack. As we all know, the philosophy of a minor swing, is only for the evaluation of any possible situation with the major swing involved. And for this particularly we have the next leg higher in dollar cooking with some devaluation from SNB to put the icing on the cake: An interesting move, EURCHF ⬆️ and USDCHF ⬆️ up a lot more... The flow is worth considering, it is not a pitless market, very often we can close our eye to some dollar devaluation but we sellers are out of energy and we need to smooth things over. Thanks for keeping the feedback coming 👍 or 👎
Long
by ridethepig
5
ridethepig | NFP PlayNFP is threatening the breakdown in EURUSD and across G10 pairs. The flows, with centralisation focused on the dollar follow profit taking and an early advance. This can be exploited and is easy to understand what is in play (as with NZDUSD). We have our shelter at 1.215x which is our ceiling, the next step is to look for areas of value to the downside. In a classical price action style, support regions are suitable targets at 1.211x and 1.200x. This will be met with demand; macro position building. More an anyone else, you will all know how bullish we were on euro ahead of the crowd. We are back above those highs after the breakthrough and with claims ticking down we are in time for payrolls, it is harder to play the buy side this time as we are already extended and at rich levels. The idea is of course an attempt to ride a retracement on the NFP headline. Lets see how it goes.
Short
by ridethepig
15
ridethepig | NZD Chart of the WeekThis chart update comes after the conversation with @YIQI.... We are tracking how the following elegant defence can hold a breakup through, namely the main target in NZ 10Y Yields: For those who remember, the sweep and breakup was what we had our eye on. A move from 50bps to 100bps was very fancy! And now we have for ourselves a change of scenery! The previous flow must unwind, and in plan of their new attack we can ride the profit taking. Sharp sellers are itching to attack, 0.705x should be able to hold, I am in full sized positions. Thanks for keeping the feedback coming 👍or 👎
Short
by ridethepig
8
ridethepig | Dollar into December📍 Dollar into December ... Here we are dealing with a sensitive situation, which we have discussed previously at earlier opportunities. One should not overlook the underlying strength of the dollar given it is the centrepiece of the currency board. After clearing the vaccine and all is roses newsflow, the next chapter of covid and risk is here into December - I am expecting dollar to find some short-term support, investors will take cover under the table while risk rushes into the room for the coming weeks. The manoeuvre is intended to provide a retrace from the impulsive leg down, but not too far. We must defend skilfully as sellers are already 'quite in love' with the dollar devaluation story. However, markets do not move in straight lines and some legs are worthy of participation. I personally think a pullback towards 94/95 before we can continue with artificial devaluation towards 80/75 in 2021. Thanks as usual for keeping the feedback coming 👍 or 👎
TVC:DXYLong
by ridethepig
9
FX Update: Mind the gap if Powell fails to signal easingSummary: The price action yesterday smacked more than a bit of end-of-month rebalancing after an incredible month for global equity markets, but it could also be that USD traders are a bit nervous ahead of Fed Chair Powell testimony today and tomorrow, as much of the USD bear case is built on the anticipation in the nearest term that the Fed is ready to move aggressively at the December FOMC when the lame duck president Trump and Congress may not be. Today’s FX Trading focus: Fed Chair Powell testimony the next test for USD The price action yesterday – was it end-of-month volatility, or USD bears unwilling to take their case too far before getting a look at Powell testimony today and tomorrow before Senate- and House panels, respectively? Too early to tell, but the Powell testimony today is likely to help give us an answer if it sparks a round of volatility in either direction. And as noted in the summary for this article: from current USD bearish positioning, buoyant market action and even comments from other analysts, there appears to be considerable expectation that the Fed is ready to move at the December 16 FOMC meeting with new easing, something I am not entirely sure is justified, given the extremely generous financial conditions in place, recent record highs in equities, etc. Sure, Powell is likely set to plead strongly for more fiscal measures to bridge the gap between what is now a very ugly present for many Americans without income and with benefits set to expire, to a post-Covid-19 future that hopefully sees a rapid return in the direction of full employment. Of course, none of this necessarily matters if the market is happy for the Fed to merely signal – whether in Powell’s testimony and/or at the FOMC meeting, that it is simply well primed to respond with powerful easing to the least stumble in the economy or markets down the road. But the chief trouble in all of this is the structural backdrop in which we have seen a shift to fiscal primacy and the risk that monetary policy is not the medicine the economy is looking for to make up for the risk of a shortfall in demand. That being said, even if Congress can only agree on a relatively modest fiscal package, there is a considerable “wall of savings” that can be injected into the economy from this spring’s covid-19 emergency response, which was so overwhelming that personal income in aggregate grew massively, even as spending collapsed and savings rose. With incomes rapidly normalizing for many workers in recent months, an outlook for further normalization on hopes that the vaccine roll-out can see Covid-19 restrictions lifting rapidly within a few months could shift consumers into a more optimistic stance on putting their savings to work. Personal balance sheets in aggregate in the US are in pretty solid shape, and the 2008-09 financial crisis response was so generous to banks that they could be happy to lend on the margin as well. For the nearest term, however, if current market pricing is in expectation of a significant upgrade of Fed caution and even a strong easing move now rather than later, then we have the risk of a disappointment for risk sentiment in the nearest term that fiscal cliff worries could exacerbate. As well, if either of the Georgia run-off elections for the final two Senate spots are seen likely going to a Republican, investors could fret the risk of political gridlock and the lack of any notable fiscal impulse next year. This could then spoil the normally strong season and lead to some bout of consolidation in risk sentiment and a solid boost to the US dollar into year-end rather than a new down-wave. Either way, it is difficult to get a feel for a market in which so much of the price action is driven by rank speculation, fundamentals be damned. And really, November saw the greatest rally in global equities for a single month in history, and the USD ended the month only down about 2% relative to the mid-point of the previous month’s price range. Not very impressive. Hoping we get a day or two with some information value from this market, but not convinced that we will. Chart: EURUSD Yesterday’s price action, in which, for example, EURUSD just managed to kiss the big 1.2000 pivot level and AUDUSD tried at the 0.7400+ highs before the air suddenly came out of the move, created a tempting reversal pattern in places for would be USD bulls, but the move came on the last day of a stunning month for global equity markets which might have driven end-of-month flows and we have the event risk of two days of Fed Chair Powell testimony to consider – perhaps best to wait and test how sensitive the market is to Mr. Powell’s message if any hints are offered on what the December FOMC meeting will bring. In the meantime, a close above 1.2000 theoretically opens up for the next resistance zone into 1.2500+, while any steep fresh sell-off back below 1.1900 would suggest the risk of the pair remaining in the rangebound doldrums. John Hardy Head of FX Strategy Disclaimer The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.
by Saxo
1
'Risk-off' knocking at the moonlit door; Long Gold📌 After completing a second test of 1.20xx, profit taking entered into play with the fix yesterday. Dollar is clearly restrained by Fed and WH prevention and then by a later of risk hedge clearings . Before I present the usual schematic representation, we should look at just how difficult the environment is to play correctly with timing these reversals. As soon as a divergence is formed, we have the choice of a shallow or deep retrace in EURUSD towards 1.16xx/1.17xx or a sharp leg higher in Gold towards $1,970 and $2,100. Gold bears must also bear in mind risk-off flows are once again knocking at the door via Iran after clearing the vaccine newsflow. I have been fielding questions around stimulus for a while, it is easy to lean on CB's but the correlation is breaking and exactly on time when this transfer should happen. Hard to understand; a better way to put this is look for a large correction in Gold after clearing the board to set about some painstaking defence for the next round of risk-off flows cooking. Thanks as usual for keeping the support coming 👍 or 👎
by ridethepig
8
Restraint at the highs📌 SPX has had its advance cut off; an attempt to cap it from the reckless advance allows the possibility of a panic blow which is decisive and impulsive in such situations, namely the invasion towards the pivot. This idea illustrates the stratagem of a major high against a 'positive' news flow. Since the Vol expansion is necessary for the defence of the highs, an exchange at 21/22 is the way we defend. You should memorise this move of forcing our opponent to make up their mind, after clearing the positivity newsflow around vaccine and etc we are going to have 'diversion' introduced. This should be considered playing against, contested elections and uncomfortable positioning from stimulus expectations leaves the entire board looking vulnerable. Thanks as usual for keeping the feedback coming 👍 or 👎
OANDA:SPX500USDShort
by ridethepig
13
ridethepig | USDCHF Market Commentary 2020.11.26📌 ridethepig | USDCHF Market Commentary 2020.11.26 This is one of the classic simultaneous 'worm in the apple' plays. It is an instructive illustration of the link between bids and offers in the short-term and diversionary support on the lows. The dependence of buyers position appears clearly on USD strength. The correct play here is to bid the 0.907x lows. A fresh train of thought should unlock a test of 0.912x and 0.914x. And sellers will then have to overcome their problems once more. According to the 'dollar', we are all the way at the bottom of the range for Thanksgiving and this low must be blockaded: It is with reluctance and after great thought that I decided on this diversion out on the lows. It seems somewhat daring, because conditions do not seem to be quite safe in the US. One of my main principles states that a fading attack is only correct when we see that others are willing to play too, as with Europe this morning on the open.... For the flows, entry 0.907x with targets clearly defined above at 0.912x and 0.914x while invalidation below 0.905x. As usual thanks for keeping the feedback coming 👍 or 👎
Long
by ridethepig
6
The birth of fresh weakness📌 Here we go for the main event... To illustrate the spillover effects between US and the rest of the board, we are going to use AUDJPY. This is absolutely going to be a long night, and of course, I wish it was over with already. Trump should, as has been emphasised several times, come out on top. What would be the significance of this move? Well, it renders the risk-off crowd totally mobile as it will be contested. To the other side, a Biden victory has somehow been taken as positive, let me point out the tax hikes that shall come back and will be really damaging. SELL AUDJPY @ 75.00 | TP1 73.9x | SL 75.6x Using JPY as 'defence against the dark arts' of politics tonight for multiple protection angles, in fact it puts the dark arts in the spotlight; protecting AUD outflows and JPY inflows are going to get in each other's way!
Short
by ridethepig
3
ridethepig | ECB Market Commentary 2020.10.29📌 EURUSD Market Commentary 2020.10.29 At a time when Lagarde ought to play the “leading” role, something similar to the pacemaker in the Tour de France, and not kick the can with PEPP while reading newspapers about what has happened from her home. I am personally expecting nothingness from the ECB and instead to tee up more QE in December which will be continuation of the bearish euro story. Whether we like it or not the expectations were already stacked towards one side for a muted ECB today kicking the can till December. My sense is that with lockdowns, U.S elections and Brexit hurdles still to clear, waves of supply will keep coming and the pending test of 1.153x is still the most likely outcome. Short-term looking to take the rest of my shorts off at 1.160x, while Medium-term I prefer to be long the single currency and will look to load from cheaper levels in the 1.15/1.14 range. Thanks as usual for keeping the feedback coming 👍 or 👎
Short
by ridethepig
7
ridethepig | Dollar UpdatesThe threat of a pullback has been set up, the unpleasant rally in USD as investors rush to park capital in the greenback. Just at the right moment, because of lockdowns, covid chapter II and things of this nature the highs can be burst open. Although we are in LONG TERM structural decline in the dollar, it does not mean we will not have to rush and take cover under the table when the storm hits shore. Buyers thus have a fortunate swing in play this week towards 95.4x. The job is only half finished, governments are aiming to default on the debt and covid / lockdowns provide the perfect cover. Capitalism is taking a sabbatical, it's being undermined and globalisation is collapsing like a house of cards. Thanks as usual for keeping the feedback coming 👍or 👎
TVC:DXYLong
by ridethepig
11
ridethepig | Dollar into the elections📌 This will act as the start of the next 'novel' on dollar: the first of course will serve as our map into the next 13 days. We must review the Medium and Long term charts to understand the art of what we are tracking, and the contact between Dollar and safe-haven flows as we enter into another expansion of volatility. The follow diagram portrays the position from earlier in the year, momentum arose with Covid and to such an extent that a rise in USD is no longer possible without venom for EM FX in particular. We have also been able to construct examples of the flows in main course dishes like EURUSD: In a nutshell, what we are tracking here is the C leg in a retrace wave, inside a more structural, longer term decline in the USD. A complex multi dimension environment, my short-term models are indicating of USD inflows as a protection for election risk and as an example of the ultimate safe haven with lockdowns & covid chapter II. The key question which we will answer as we move along will be if this is infact a retrace inside a sustained decline, or the start of a brand new uptrend in USD. In this scenario, a test of 97.5x would be enough to build confidence in the view. Recommend layering these in G10 and EM FX as we go for all those following the live calls. Thanks as usual for keeping the feedback coming 👍 or 👎
TVC:DXYLong
by ridethepig
27