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Thursday, 1 August 2013
How I made £15,108 in one day, trading Oil
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More tools, more training, more 1-2-1 support = More Profits
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Wednesday, 31 July 2013
Technicals in FX
Technical Analysis
EUR/USD
EUR/USD seems to be range bound
“Euro-area domestic demand later this year and in 2014 should be supported by the accommodative monetary-policy stance as well as the recent gains in real income owing to generally lower inflation.”
- ECB President (based on Bloomberg)
- Pair’s Outlook
For the past 6 days pair is trading in rather tight range—between monthly R1 and weekly PP. Although short and long term technicals indicate strength of the pair it does not seems there is a strong enough catalyst in the market which could ignite a rally. Bounce for weekly PP and some short term rally could be expected, but it is unlikely advance above 1.339, at least for the time being. Dips should find support with 1.318. - Traders’ Sentiment
It seems that bears are pushing bulls back out of the market since share of bears in the market increased by 2% and at the moment they account for 63% of market participants. In addition to this, share of pending long orders decreased by 4% and is at 54% gauge today.
GBP/USD dips to 20-day SMA
"There is now no doubt that consumer confidence has recovered strongly from the unparalleled trough of the last five years. It is the longer-term changes that mean far more than one single month's figures, and the current trend is definitely upwards."
- GfK (based on Reuters)
- Pair’s Outlook
Pair received a bearish impetus from the Fibo 61.8% (mid June to beginning of July move) few days ago. It depreciated by 50 pips (on the open to close basis) then and almost 100 pips yesterday until it found support with the 20-day SAM where the pair is trading at the moment. In any case, pairs outlook remains bearish as 1.5191/119 seems wont be able to provide enough of a support. - Traders’ Sentiment
Open positions are changing hands rather often between the bears and the bulls lately. Bears now account for 59% of market participants. That is 4% less than yesterday. Bulls, however, cant manage to swing the distribution of pending orders in their advantage—it remains at 48% gauge.
USD/JPY trading at monthly PP
“From here, traders, like the Fed, will be looking to the data to suggest the timing of the next move.”
CMC Markets (based on MarketWatch)
- Pair’s Outlook
After a 200 pip dip in the end of the last week, pair found support with monthly PP and has been trading around it for the past 4 days. It seems that such neutrality is likely to persist further, although, judging from market sentiment dynamics, we might see some short term rallies which should be capped by 99.6/100.00 JPY. In case pair receives bearish impetus and 97.5 JPY fails to provide enough of a support, there is a chance it might trail down to 94 JPY. - Traders’ Sentiment
Bulls are maintaining a tight grip on the market—they account for 74% or market participants. However, for the first time in almost two weeks majority, even if slim, of pending orders (52%) are set to sell the greenback against the yen.
USD/CHF remains at Fibo 23.6%
"It's another waiting day, we have a lot of important data points later in the week so people aren't going to change positions a lot today."
- J. Safra Sarasin (based on The Economic Times)
- Pair’s Outlook
Similarly to some other pairs greenback-franc cross is trading in a rather narrow range for the past 5 days. However, short and medium term technicals point at weakness of the pair. In such case it could be sold off all the way to 5 month low at 91.3 cents. Short term rallies are rather unlikely, but, just in case, should be capped by the 94 cents. - Traders’ Sentiment
Situation in the market is remaining exactly the same for the third day in a row. Share of open long positions in the market holds at 72% level and pending long orders remain at 57% gauge.
Monday, 29 July 2013
What now for USD Dollar pairs?
EURUSD
The Euro remains well supported, as the price continues to channel higher and approaches next target at 1.3300, with weekly close just under the barrier. Friday’s Doji would signal further consolidation, before the price resumes larger rally that commenced from 1.2754, 09/07 low and targets 1.3414, 18/19 / 06 peaks. Positive technical s remains supportive for final push higher, with 1.3250/00 zone offering initial support and expected to protect the downside.
Res: 1.3300; 1.3325; 1.3400; 1.3414
Sup: 1.3250; 1.3220; 1.3200; 1.3164
GBPUSD
Cable ended Friday’s trade with Doji candle, as the price moved within 1.5350/80 consolidative range. However, positive tone dominates on lower timeframes studies and favors further upside. Clear break above 1.5400 barrier that was cracked on spike to 1.5433, is required to open 1.5476, 26/06 high and psychological 1.5500 barrier. Positively aligned daily studies are supportive, with Friday’s low at 1.5354, reinforced by 20DMA, offering initial support, ahead of psychological 1.5300 handle. Only loss of last week lows at 1.5262, would delay bulls.
Res: 1.5402; 1.5433; 1.5476; 1.5489
Sup: 1.5350; 1.5327; 1.5300; 1.5262
USDJPY
The Dollar/yen ended week in red, after repeated failure to hold gains above psychological 100 level, triggered fresh weakness. Friday’s extension lower that broke below 98.22, previous low, probed below 98.00 support. This completed daily failure swing and opens way for broader weakness. Break below important supports at 97.65/58, 50% retracement of 93.78/101.52 ascend / daily Ichimoku cloud base, is required to confirm bearish resumption from 101.52 and 100.85 highs and open 97.00, round-figure support and 96.74, Fibonacci 61.8% retracement, as daily indicators are attempting below their midlines. Negative tone prevails on lower timeframes, with the downside being favored, however, bears may be interrupted by corrective rally on oversold conditions.
Res: 98.33; 98.70; 99.00; 99.38
Sup: 97.62; 97.22; 96.95; 96.74
AUDUSD
The pair ended week during which the pair tested both, 0.9000/0.9300 near-term range borders, with positive tone prevailing on a bounce towards the upper boundary. Friday’s trading was seen as consolidation under the range top, as the price held above 0.9200 support. Positively aligned short-term studies keep the upside focused, with clearance of 0.9316/43 barriers, required to confirm bottom and commence recovery phase. Conversely, repeated upside rejection would signal further sideways trading and increase downside risk, if price falls below 0.9200/0.9150, Fibonacci 38.2% / 50% of 0.8997/0.9316 range.
Res: 0.9286; 0.9316; 0.9343; 0.9400
Sup: 0.9226; 0.9200; 0.9167; 0.9127
The Euro remains well supported, as the price continues to channel higher and approaches next target at 1.3300, with weekly close just under the barrier. Friday’s Doji would signal further consolidation, before the price resumes larger rally that commenced from 1.2754, 09/07 low and targets 1.3414, 18/19 / 06 peaks. Positive technical s remains supportive for final push higher, with 1.3250/00 zone offering initial support and expected to protect the downside.
Res: 1.3300; 1.3325; 1.3400; 1.3414
Sup: 1.3250; 1.3220; 1.3200; 1.3164
GBPUSD
Cable ended Friday’s trade with Doji candle, as the price moved within 1.5350/80 consolidative range. However, positive tone dominates on lower timeframes studies and favors further upside. Clear break above 1.5400 barrier that was cracked on spike to 1.5433, is required to open 1.5476, 26/06 high and psychological 1.5500 barrier. Positively aligned daily studies are supportive, with Friday’s low at 1.5354, reinforced by 20DMA, offering initial support, ahead of psychological 1.5300 handle. Only loss of last week lows at 1.5262, would delay bulls.
Res: 1.5402; 1.5433; 1.5476; 1.5489
Sup: 1.5350; 1.5327; 1.5300; 1.5262
USDJPY
The Dollar/yen ended week in red, after repeated failure to hold gains above psychological 100 level, triggered fresh weakness. Friday’s extension lower that broke below 98.22, previous low, probed below 98.00 support. This completed daily failure swing and opens way for broader weakness. Break below important supports at 97.65/58, 50% retracement of 93.78/101.52 ascend / daily Ichimoku cloud base, is required to confirm bearish resumption from 101.52 and 100.85 highs and open 97.00, round-figure support and 96.74, Fibonacci 61.8% retracement, as daily indicators are attempting below their midlines. Negative tone prevails on lower timeframes, with the downside being favored, however, bears may be interrupted by corrective rally on oversold conditions.
Res: 98.33; 98.70; 99.00; 99.38
Sup: 97.62; 97.22; 96.95; 96.74
AUDUSD
The pair ended week during which the pair tested both, 0.9000/0.9300 near-term range borders, with positive tone prevailing on a bounce towards the upper boundary. Friday’s trading was seen as consolidation under the range top, as the price held above 0.9200 support. Positively aligned short-term studies keep the upside focused, with clearance of 0.9316/43 barriers, required to confirm bottom and commence recovery phase. Conversely, repeated upside rejection would signal further sideways trading and increase downside risk, if price falls below 0.9200/0.9150, Fibonacci 38.2% / 50% of 0.8997/0.9316 range.
Res: 0.9286; 0.9316; 0.9343; 0.9400
Sup: 0.9226; 0.9200; 0.9167; 0.9127
Thursday, 25 July 2013
Tuesday, 23 July 2013
Gold Market Update
Bullion Round Up
Does the current breakout warrant higher prices or has the media overblown the potential for higher prices? We would like to take this opportunity to remind our readers that gold continue to trade in a bearish market environment as discussed this morning in the Live Trading Room. The current rebound may well be a short one as we have not seen enough evidence that gold prices could recover and continue higher. Ironically, we are starting to share the same view as Chairman Bernanke that our understanding on gold could be rather limited.Recent monotonous price movement has led many investors asking questions about the prospect of holding gold as safe haven assets. We have seen outflow from gold backed ETFs as the primary instigator on the fall in price. Physical demand from China, India and Middle East managed to support the recent price action. In addition, the GOFO rate on gold bullion has been trading in the negative zone for the past 10 day’s added pressure. Speculators have decided to cover their shorts at this level but further advancement in gold price may remain limited due to various resistance levels at $ 1338, $ 1350 and $ 1375.
We have covered the current temporary short covering event weeks before it happened. As a forward looking publication, we will not discount the fact that gold could maintain this bull run in the event that physical demand increases, confidence among investors are restored and more short covering among the sellers (as we approach end of July). Short term support is at previous resistance (now support) at $ 1301 level but other supports are at $ 1270, $ 1250 and $ 1208 area. With a weaker US dollar index, gold prices can maintain its current rebound. However, we will remain cautious on US economic data that could well increase the potential of “septapering” or even increase the size of tapering.
Gold Technical Outlook
The recent price action in gold reached our short term objective at $ 1325 / $ 1338 area. We continue to see strength in the current rebound and prices could consolidate in the next few days. However, we advise caution because investors and speculators may change stance should the US economic data improved.Chairman Bernanke made it clear that tapering is data dependant and he promoted an accommodative stance for now. Global equities rally on the back of his dovish remark, followed by other risk assets. Given that gold reached an oversold territory (when it was trading at $ 1180), there are rooms for dip buyers and speculators to trade higher. Bloomberg survey shows that hedge funds are more bullish and have increased their long bet on gold.
Prices could continue higher after it break pass previous resistance at $ 1298 and the psychological level of $ 1300. Potentially, prices could retest $ 1325 and short covering rally may push the current rebound higher.
Despite that, the medium term bearish perception has not changed. Once the rebound rally is exhausted, we would strongly recommend our readers to short sell the yellow metal again.
Resistance: $ 1326, $ 1338, $ 1387 Support: $ 1302, $ 1270, $ 1208.
Traders Notes: Expect a short period of short covering before the market resume lower. Short sellers are looking to short at $ 1326 and $ 1338 area target remains open at the moment. Stop loss is advice at $ 1350 area.
| Short Term (1 week) | Medium Term (1-3 weeks) | Long Term (1-3 months) |
| Bullish – target 1325/1338 | Bearish – target 1155 | A rebound rally? |
Sunday, 21 July 2013
USD/JPY ready for more weakness?
This Sunday Japan will vote a new Upper House, with the ruling party
already having an overwhelming majority in the lower one. According to
polls, Kuroda and Abe will get the all needed power to lead the country,
something that will happen first time since 2007. Back then, the
USD/JPY was trading above 120.00 levels never seen again. And in the
meantime, both leaders reassure market players that they are ready to
continue with their ultra lose policy of monetary easing.
Has the time come then, for USD/JPY to resume the upside? So far nothing indicates so, according to the daily chart, although technical readings indeed favor the upside: latest June kneejerk down to 93.70 was barely corrective as the level represents the 38.2% retracement of the October/May bullish run. But the recovery stalled around a shorter Fibonacci retracement area, 78.6% retracement of its latest fall at 101.50, and the pair is having a hard time to hold above the 100.00 level these past couple of weeks.
Elections however, are those kind of events that can trigger a couple hundred rally in a day, and set a new outlook for a pair, and this weekend elections may be no exception: if current leaders get the overwhelming majority suggested by polls, the pair can easily breach the 101.50 resistance on Monday, and once there, the way towards 103.70 yearly high, will be open. But steady gains above that 101.50 are a sine qua non condition to confirm the pair is ready to resume the upside.
On the other hand, summer in the north hemisphere keeps majors ranging, and boards with no actual volume: if 101.50 contains any attempt of advance further, the pair will continue hovering below 100.00, with a strong support around 98.20/80 price zone for the upcoming week.
View Live Chart for USD/JPY
Has the time come then, for USD/JPY to resume the upside? So far nothing indicates so, according to the daily chart, although technical readings indeed favor the upside: latest June kneejerk down to 93.70 was barely corrective as the level represents the 38.2% retracement of the October/May bullish run. But the recovery stalled around a shorter Fibonacci retracement area, 78.6% retracement of its latest fall at 101.50, and the pair is having a hard time to hold above the 100.00 level these past couple of weeks.
Elections however, are those kind of events that can trigger a couple hundred rally in a day, and set a new outlook for a pair, and this weekend elections may be no exception: if current leaders get the overwhelming majority suggested by polls, the pair can easily breach the 101.50 resistance on Monday, and once there, the way towards 103.70 yearly high, will be open. But steady gains above that 101.50 are a sine qua non condition to confirm the pair is ready to resume the upside.
On the other hand, summer in the north hemisphere keeps majors ranging, and boards with no actual volume: if 101.50 contains any attempt of advance further, the pair will continue hovering below 100.00, with a strong support around 98.20/80 price zone for the upcoming week.
View Live Chart for USD/JPY
Tuesday, 16 July 2013
FOMC Minutes release
The US dollar was not able to hold its previous gains and lost ground
against its major counterparts over the past week. Following the FOMC
meeting’s minutes release, it became clear that the Fed will continue
its stimulus measures as Chairman Bernanke said the central bank has no
intention to change its aggressive policy in the near future.
Forex markets were very quick to react on the news and just a few hours were needed for the dollar to plummet sharply against both the euro and the pound. At the end of the week, the EUR/USD traded at 1.3067, or having a 239 pips gain, while the GBP/USD added 204 pips to its value, closing at 1.5103 on Friday. The USD/JPY lost 186 pips, with the last quote for the week being at 99.34.
Indices
FOMC minutes and Bernanke’s subsequent statement were expected with great interest by the capital markets as well. After the central bank’s firm stance became evident, the major US indices took the upward movement, registering significant weekly gains. The S&P500 closed at the record 1,678 points, or 2.84% higher; the Dow increased its value by 2.14% to 15,452 points, while the Nasdaq100 rose by 3.81% to 3,075 points. Additional boost in investors’ optimism came from the better-than-expected financial results of JPMorgan Chase and Wells Fargo.
Meanwhile, European markets were trading mixed in the past week. Germany’s DAX30 and France’s CAC40 rose significantly by 4.61% and 1.99%, respectively, while Spain’s IBEX and Italy’s S&P/MIB reported falls within 1%.
Commodities
Bernanke’s speech also triggered action in gold and silver buyers. Gold (XAUUSD) added 5.09% to reach $1,284 per troy ounce, while silver (XAGUSD) rose to $19.91, or 5.57% per troy ounce.
What to expect this week?
This week’s start is mainly focussed on reports from the US and China, as the majority of economic events on Monday are coming from the two countries amid a closed Japanese market due to a holiday and a lack of data from the Eurozone countries. China has already published its GDP, with figures showing another slow growth for a second consecutive quarter.
The country’s economy increased by 7.5% YoY compared to 7.7% for the same period the previous year, while it also revealed slightly weaker-than-expected Q2 results at 1.7%, opposite forecasts for a 1.8% rise. One of the main reasons contributing to the country’s lower GDP growth lays in the declining world demand for Chinese goods. However, many analysts commented that the current GDP results in the case of China are not a negative signal and it is still a healthy pace of growth. Later in the session, the US is due to publish its Retail Sales for June, while New Zealand will publish its Consumer Price Index, both on quarterly and annual bases. Tuesday will see the release of a series of UK economic data, including the country’s Consumer and Retail Price Indexes, both for QoQ and YoY bases, and the Bank of England Inflation letter. Other highlights of the day will be the meeting’s minutes of the Reserve Bank of Australia and the Bank of Japan, the Consumer Price Index for both – the Eurozone and the US, along with Germany’s ZEW Survey on economic sentiment.
Wednesday’s focus will shift to the Bank of England meeting’s minutes and the country’s Claimant Count Change as well as the US Building Permits data for June. Thursday will produce the UK’s Retail Sales on quarterly and annual bases, along with the US Initial Jobless Claims. Friday’s main entries will come from Germany’s Import Prices for June and Canada’s Consumer Price Index, as the trading day will be rather quiet in terms of economic events.
Outside of the economic calendar, some leading US companies will publish their financial results and heat the market as the earnings season is gathering speed: Citigroup (C) on Monday, Coca-Cola (KO) and Johnson & Johnson (JNJ) on Tuesday, Bank of America (BAC), International Business Machines (IBM), American Express (AXP) and Intel (INTC) on Wednesday, Verizon Communications (VZ) on Thursday and General Electric on Friday.
Forex markets were very quick to react on the news and just a few hours were needed for the dollar to plummet sharply against both the euro and the pound. At the end of the week, the EUR/USD traded at 1.3067, or having a 239 pips gain, while the GBP/USD added 204 pips to its value, closing at 1.5103 on Friday. The USD/JPY lost 186 pips, with the last quote for the week being at 99.34.
Indices
FOMC minutes and Bernanke’s subsequent statement were expected with great interest by the capital markets as well. After the central bank’s firm stance became evident, the major US indices took the upward movement, registering significant weekly gains. The S&P500 closed at the record 1,678 points, or 2.84% higher; the Dow increased its value by 2.14% to 15,452 points, while the Nasdaq100 rose by 3.81% to 3,075 points. Additional boost in investors’ optimism came from the better-than-expected financial results of JPMorgan Chase and Wells Fargo.
Meanwhile, European markets were trading mixed in the past week. Germany’s DAX30 and France’s CAC40 rose significantly by 4.61% and 1.99%, respectively, while Spain’s IBEX and Italy’s S&P/MIB reported falls within 1%.
Commodities
Bernanke’s speech also triggered action in gold and silver buyers. Gold (XAUUSD) added 5.09% to reach $1,284 per troy ounce, while silver (XAGUSD) rose to $19.91, or 5.57% per troy ounce.
What to expect this week?
This week’s start is mainly focussed on reports from the US and China, as the majority of economic events on Monday are coming from the two countries amid a closed Japanese market due to a holiday and a lack of data from the Eurozone countries. China has already published its GDP, with figures showing another slow growth for a second consecutive quarter.
The country’s economy increased by 7.5% YoY compared to 7.7% for the same period the previous year, while it also revealed slightly weaker-than-expected Q2 results at 1.7%, opposite forecasts for a 1.8% rise. One of the main reasons contributing to the country’s lower GDP growth lays in the declining world demand for Chinese goods. However, many analysts commented that the current GDP results in the case of China are not a negative signal and it is still a healthy pace of growth. Later in the session, the US is due to publish its Retail Sales for June, while New Zealand will publish its Consumer Price Index, both on quarterly and annual bases. Tuesday will see the release of a series of UK economic data, including the country’s Consumer and Retail Price Indexes, both for QoQ and YoY bases, and the Bank of England Inflation letter. Other highlights of the day will be the meeting’s minutes of the Reserve Bank of Australia and the Bank of Japan, the Consumer Price Index for both – the Eurozone and the US, along with Germany’s ZEW Survey on economic sentiment.
Wednesday’s focus will shift to the Bank of England meeting’s minutes and the country’s Claimant Count Change as well as the US Building Permits data for June. Thursday will produce the UK’s Retail Sales on quarterly and annual bases, along with the US Initial Jobless Claims. Friday’s main entries will come from Germany’s Import Prices for June and Canada’s Consumer Price Index, as the trading day will be rather quiet in terms of economic events.
Outside of the economic calendar, some leading US companies will publish their financial results and heat the market as the earnings season is gathering speed: Citigroup (C) on Monday, Coca-Cola (KO) and Johnson & Johnson (JNJ) on Tuesday, Bank of America (BAC), International Business Machines (IBM), American Express (AXP) and Intel (INTC) on Wednesday, Verizon Communications (VZ) on Thursday and General Electric on Friday.
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