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Quite some action in FX markets at the turn of the month. Several pairs (EUR/JPY, GBP/JPY, USD/CAD, AUD/USD) broke their respective 200 DMA, and few other ones (EUR/USD, GBP/USD, NZD/USD) their 50 DMA, which sparked some momentum. Stock markets turning lower has also contributed to the volatility.
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Risk sentiment a bit better to start the week
Risk sentiment has improved a bit since late Friday bounce in the stock markets. USD/CAD spiked 80 pips after weak jobs report on that day but gave it all back and is currently trading below the pivotal 1.26 level. 1.25 is the initial support and 1.27 the first stronger resistance.
12 Trading Rules by Joe DiNapoli.
1. Loss of opportunity is preferable to loss of capital.
2. Picking safe, readable, and ultimately high probability trades is the way to go.
3. Use logical profit objectives for all positions. Know your exits and stick to them.
4. Markets are squirrelly animals - make your trading plans ahead of the market.
5. Don't buy new highs or sell new lows - wait for the market to come to you. Buy retracements. If you miss the train, don't beat yourself up - another one will come by shortly.
6. Above all…
Stock Markets and US Presidentials
Joel Kruger, currency strategist at LMAX Exchange says that:
US Presidentials are “nothing more than a distraction from the primary headwind for the global economy, which is exhausted central-bank policy that can no longer artificially support investor sentiment”.
Kruger also notes that investors can kiss goodbye any remaining hopes of meaningful U.S. stock rallies this year.
He points that we are transitioning from a market that has been very much ‘buy the dip’ to a market that will be look…
US Presidentials are “nothing more than a distraction from the primary headwind for the global economy, which is exhausted central-bank policy that can no longer artificially support investor sentiment”.
Kruger also notes that investors can kiss goodbye any remaining hopes of meaningful U.S. stock rallies this year.
He points that we are transitioning from a market that has been very much ‘buy the dip’ to a market that will be look…
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Cable falls to the lowest since 2010
Not long after the London open, Cable broke below 2015 low (~1.4565) by a couple of pips before pulling back. Another attempt at new six-year lows saw the pair being sold to 1.4555. Next major support comes in near 2010 low (~1.4230).
GBP/JPY fell more than 700 pips so far this week and year, almost 200 pips per day, weighing strongly on both core pairs. This pair has been acting as a decent risk barometer having been correlated well with global stock markets.
GBP/JPY fell more than 700 pips so far this week and year, almost 200 pips per day, weighing strongly on both core pairs. This pair has been acting as a decent risk barometer having been correlated well with global stock markets.
Yen stabilizes ahead of tomorrow's FOMC meeting
Sentiment in stock markets improved today while ten-year U.S. treasury yield gained 7bp. In addition, there was a broader U.S. dollar buying throughout the second part of the day - a lot if it must have been position adjustment ahead of tomorrow's big event.
USD/JPY rallied 120 pips from the lows and gained nearly 70 pips on the day after it bounced from the trendline, drawn off of August and October lows. The pair is currently trading just above the confluence of 50, 100 and 200 DMA (~121.50), …
USD/JPY rallied 120 pips from the lows and gained nearly 70 pips on the day after it bounced from the trendline, drawn off of August and October lows. The pair is currently trading just above the confluence of 50, 100 and 200 DMA (~121.50), …
Yen pulling back
After a fake move to the upside on Monday, Yen has been heading lower. It posted four consecutive days of losses and has given back more than half of the gains that it made since last Friday's NFP report.
122 is the level to watch. If it holds, the pair may rally again to retest 124 - 125 in the days ahead. If it gives way, a return to 118 - 122 range will become the most likely scenario. A lot of that will depend on what stock markets will do in the near future.
122 is the level to watch. If it holds, the pair may rally again to retest 124 - 125 in the days ahead. If it gives way, a return to 118 - 122 range will become the most likely scenario. A lot of that will depend on what stock markets will do in the near future.
Yen continues south
After failing to hold 120 overnight, Yen turned lower and fell more than a cent before pulling back a bit. Second wave of selling sent it down to 118.85 so far. Stock market declines are being cited as the main driver, albeit likely mixed with some positioning ahead of the US jobs report.
Technically, the pair has been in a downtrend since August 24th rout. In my view, 120 - 122 is neutral zone. If the pair wants to re-establish bullish bias it has to break and hold above that zone. On the flips…
Technically, the pair has been in a downtrend since August 24th rout. In my view, 120 - 122 is neutral zone. If the pair wants to re-establish bullish bias it has to break and hold above that zone. On the flips…