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EURAUD: Ideal opportunity for a pair tradeAfter seeing The Working Trader's idea I figured I could attemp a pair trade in this pair, to take advantage of the interest rate differential in both EURUSD short and AUDUSD long. The entry will be a market order, but I'd have to see how the markets open tomorrow, I will update the chart by then. For now, keep in mind that for pair trades, I aim to open a big position on each side, which thanks to the pair trade's more 'market neutral' stance, lets me use no stop loss and be somewhat safe, at least, as long as the ratio chart's setup is valid (in this case EURAUD). The advantages are multiple, check out The Working Trader's post in 'related ideas' for more information, I detailed it there. For now, if you want to enter this trade, find out the ADR value (atr of 1,5,10 and 20 bars added together and divided by 4). Once you know this you can calculate position size in base on your desired risk, per day. You will have to watch the trade, unless you're deep in profit, it won't be a set and forget deal. Good luck, and wait for the update regarding entry tomorrow. Target is initially the time at mode one, but it can retrace the whole terminal wedge (it should for it to be valid, and it has to occur in 1/3-1/4 the time it took to be formed). Cheers, Ivan.
Short
by IvanLabrie
11
EURUSD and GBPUSD: updateAnalysis on chart. I'll update it once I see a clear short signal in the weekly chart. Daily remains turbulent and unclear, it's possible to see a small rally, so shorting is a bit dangerous unless using wide stops and going long is even worse. I'll analyze price action and look into selling short once we see confirmation here. Crude oil seems to have resumed the downside, I'd be skeptical of a rally from here, but it's possible. As an addendum, TSLA might head down with crude oil, as gas gets cheaper and electric cars lose appeal (it has happened before). I'm looking to go long at a key level, as seen in my related idea below. Good luck, and have a nice weekend. Ivan.
Short
by IvanLabrie
14
31 Year US Bearish Bond Yields Coming to an EndThere are many reasons why bond yields should go down, however, there are many more positive reasons why bond yields will go higher. Demographically Challenged Our largest demographic population on the planet, not just in the US, is the baby boomers born 1944 to 1964. Largely early baby boomers born during WWII and up to the late 1940's have already started collecting on retirements. For these seniors to live comfortably in retirement they will need to draw down on a steady income derived from higher US Bonds yields. Boomers can no longer afford to risk money in equity markets, they will be forced to invest conservative in fixed incomes. US Political Movement For more than 30 years the US has run up debts with both political parties at fault. However, more recently we are seeing a shift towards a popular following of younger fiscal conservatives in the Republican party. Many of these fiscal conservatives candidates govern states and have taken on the challenge of run away debt spending. Fiscal Conservatism will also appeal to the US largest voting class, baby boomers. Baby boomers are fully aware that more debts equals more instability in the US, and want to see a more fiscal responsible governments. To appease the baby boomers wishes, whoever it is that leads the US, they will implement a strategy of spending cuts and debt reductions. Spending cuts and debt reductions will also help US Treasury Yields increase. Federal Reserve Raising Rates Our own Federal Reserve has been sounding off the warning now for almost a year, it's only a matter of time before Janet Yellen starts raising benchmark rates. Although US economy has entered another soft patch, which will require the Fed to talk down the rate increase in 2015. However, sometime in 2016 we will see our first rate increase in the US. I expect other countries like Great Britain to follow this trend of rate increases.
TLong
by QuantitativeExhaustion
30
Gold To Retest $1,130 As Dollar StrengthensNobody can ignore the greenback gorilla in the room any longer as one percent moves seem to be a natural occurrence. The unprecedented drop in the euro, yen and Swiss franc is forcing the dollar index higher, causing dollar-priced commodities to decline lower. There is a striking pattern with the Swiss franc and gold. For many years, both assets have traded alongside each other. In 2011, gold reached its top of $1,923 per toz. It is also when the Swiss National Bank (SNB) implemented its euro-franc peg. Following the SNB’s decision to shock the world in January and, potentially, break away from the paradigm of policies announced well in advance, the franc steadily began to sink lower. And gold’s impressive run this year ended. (bullion.directory) Some traders may feel that the Federal Reserve is only a few months away from hiking the key benchmark rate, many still believe the later half of 2015 is more likely. Even so, the perceived policy divergence between central banks is moving the dollar higher . The Fed still has yet to tighten monetary policy because they must remain “patient.” Nevertheless, gold is now at a three-month low, while the dollar is at the highest level since the mid-2000s. Gold is hovering at about $1,150 per toz., and price action is looking to retest last year’s low of $1,130. Before this can happen, gold will have to close below the narrow demand zone on the daily chart of $1,144/41. In reality, it could only take another one percent push on the dollar index. Former support levels of $1,163 and $1,175 will be the nearest levels of resistance. The 50-day EMA has crossed underneath the 72-day EMA, confirming bearish sentiment. If the lows are taken out, it could potentially get out of hand if the dollar continues to strengthen as it has. I recently published a piece on a wedge forming in silver, and if one were to look on the weekly chart for gold there is a wedge forming as well. Price action has made a series of lower lows and lower highs, while the price range is narrowing. Theoretically, the descending wedge is a bullish reversal pattern, but there is no rule on how far prices could drop. The wedge support shows that potential support below $1,130 would sit at $1,110/00 depending on where price action could make contact with the descending support trend. Price action support would sit at $1,095 and $1,045, if the wedge is broken. The volume has been large and heavily to the downside. Momentum looks to be picking up to the downside on the weekly chart. The ADX is beginning to tick back up, corresponding to the – DMI pushing higher. The dollar rising is worrying. It is not particularly the fact that it is strengthening, but it is strengthening at a pace not seen in nearly four decades. The dollar has increased 10.68 percent since February. The move is not normal, but it is reality. As mentioned previously, it will likely get a lot worse before the party runs out of drugs and the music stops. The strengthening dollar has hurt commodity prices, but it is also taking a toll of those record profits US companies have been raking in since the Fed implemented ZIRP. Equities are volatile and diverging from the dollar. Those bearish on gold during the S&P’s golden years are now making a case for holding gold. Times are changing. When the dollar’s momentum may wane is unknown due to the ongoing currency war, but one this is certain: a strengthening dollar will rip off the Fed’s band-aid, and the underlying economic rot will be seen for what it is. Please visit for more on precious metals, central banking folly and economics: bullion.directory
COMEX:GC1!
by CommoditiesTrader
6
USDCAD: Converging Bats and ButterfliesThe USD gained in strength last Friday after a favourable jobs report. The CAD data has also been good the last few days and they sure beat expectations Friday with their employment data. But appreciation of the USD on the back of their jobs report proved too strong for the CAD and this pair gained 165 pips before giving 35 back before market close. The Canadian economy is struggling with the low oil prices and there is rate divergence (given the recent rate cut by the BoC and the possibility of a summer rate hike by the FED) so I remain overall bullish on this pair. On the technical side, we saw some consolidation the last week after this pair had been rallying the 2 weeks prior. Consolidation breads advanced price patterns and we now have the contours of no less than three bearish harmonics on the 30M timeframe, each with a distinct X-A as the anker leg of the pattern. The two Bats and the Butterfly have potential reversal zones that converge nicely and in the chart I merged them into one 47 pips wide zone marked PRZ. The profit targets of the individual harmonics converge nicely as well and I merged them into two separate profit zones. Price has travelled only about 35% on the way from C to the PRZ, so patience is key and I am not jumping the gun. However, should the price continue to rise next week and eventually test the PRZ, I would observe it closely for a potential reversal. In that case I would enter a short, aiming to take profit in both profit zones. SL would go 10 pips behind the resistance. There are 255 pips to be made (if this pair follows the script) and the trade has a reward – risk ratio of 3.9! UPDATE: Price is still messing around between the C and D points of these patterns I published 21 days ago. I have now deleted them from my watch list. The patterns did not complete, there was no entry signal and I did not enter any trade here, so nothing was risked and nothing was lost. On to the next trade!
Short
by JazzForex
2
USDCADI am bearish on the US dollar, and I expect the loonie to gain ground. The BoC is not engaging in reckless monetary policy, even though, at times, traders found them absent. Canadian CPI is stronger - just above two percent YoY - than in the US, which should favor CAD. The Fed wants a weaker dollar. The Fed said it; Yellen said it. Don't fight the Fed, right? The Canadian economy is so-so, but I expect US economics to weaken considerably. There is underlying weakness in the labor market nobody is focused on. Since 2007, over two million jobs in the key 25-54 age demographic have been lost, while almost six million jobs in the 55 and older demo were gained. We don't need to worry about the participation rate. We should be worrying about the bulk of US employees simply passing away. I look for a weaker USD throughout 2015. Fed won't raise rates next year. Fed Pres. Bullard is already talking about extension of QE3 (after several bumblings about needing to raise rates). What 200 measly points of the top can do. Long CAD, Short USD in a position trade. Forecasts do not necessarily follow each other. Simply 1.08 within three months and 1.05 in 12. Check me out of Dukascopy TV: www.youtube.com
Short
by CommoditiesTrader
Higher rates thoughts push down EurStay short EurGbp or, if you prefear, long GBP! Since the macro economic data started to improve, the pressure on the exchange rate has became stronger. The beginning of rates normalization will make the UK's currency more expansive versus the Euromoney. At the same time, the chart seems to confirm the bearish view: It is unlikely (given also the macro-analysis) that the price will brake-up the current level @0.7895, looking also at the RSI oscillator (in 60 area), we have no signs of bullish trend beginnin. My view is that the price will continue its down trend, following the channel you can clearly see on the charts. Take care of 0.78 area that could be a strong point of inversion or continuation of the trend.
Short
by NicoS
GBP/AUD with 2 possible outcomesGBP/AUD currency pair is close to an important support near 1,772 level which is 2014 low and possible wave 3 end. If we take away the fact that 5 wave structure should be in the bigger trend direction (which is an uptrend on bigger time frames for GBP/AUD) then the downside scenario is valid and if price manages to go lower then 1,772 low then way to 1,74 and 1,69 levels should be open and we might see an wave 5 which should end the downmove started in January. There's also an bearish flag present on the daily chart which was broken last week but as stated before I'd be cautious with any shorts as long as we won't get an daily close below 1,77-1,772 level. On the other hand there's Fundamental point of view which may supports GBP recovering against Australian Dolar. The MPC rates vote which shows that 2 members wanted to rise rates on the last meeting suggest that Great Britain will be the first Big Central Bank to start normalysing the monetary policy. Also there's RBA in Australia which is not really happy with to strong Australian Dolar and trade balance data shows that's not good for Australian economy also. To sum Up I'd rather be long from where we are now with some big targets in mind and stops below 1,77 level. IF 1,77 level is broken then more downside is expected.
by tomasz.goljan