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May 31, 2012

If TMM ran Europe

Filed under: Forex Strategies — Tags: — admin @ 4:43 pm

There is a Carlsberg advertising theme that has been running for years that is on the lines of  “If Carlsberg did xyz” followed by some Utopian version of xyz. We don’t know if it’s our desire for a cool lager or the mess in Europe that has triggered us to do our own version, but here it is.

If TMM ran Europe

– London would be where Cannes is.
– The European Parliament would be in Athens.
– Current political leadership of Eurostriches would be freed onto the African plains.
– New political reps would have votes allocated on issues dynamically by “Likes”or “Followers”.
– Switzerland would be included and stop pretending.
– UK would leave the EU and join NAFTA.
– The ECB would be in Bangalore.
– Policy makers would sit on trap-doors over shark tanks on 1 min time triggers only over-ridden by them making a decision.
– “Ocean Finance” would consult Spain.
– The Bundesbank would be a water park.
– Greece would discover oil (but only enough to pay their debts).
– Mediterranean resorts would be pegged to beer prices.
– Health and safety would be left to Darwinian selection.
– Pan-European mobile phone calls would be at “local” prices.
– OCD suffers would be moved to Naples.
– Fruit would be misshapen.
– Human rights wouldn’t contradict common sense.
– Coffee prices would be capped at E1.50 a cup but at 50cents in Paris, Switzerland and Venice.
– Eurovision song contest votes would be weighted by debt/gdp.
– Lying about your finances would be a capital offense.
– Day-Glo liqueurs would taste as good at home as they did at 1am on holiday.
– Pedestrians and cyclists would be as punishable as car drivers for accidents.
– Pension schemes, casinos and “Dignitas” would be run as one.
– Germany would be made to play Santa at Xmas.

Daily Forex Fundamentals – May 30, 2012

Filed under: Currency Charts — Tags: , , , — admin @ 1:28 am

What’s on the Economic Horizon

Australia’s retail sales down by 0.2% in April
U.S. pending home sales expected to print flat in April
Italian bond auctions and Draghi’s speech due today

U.S. Dollar (USD)

The dollar bulls are back in business! Thanks to risk aversion in markets, Greenback traders mostly ignored mixed economic data from the U.S. Instead, they boosted the safe-haven higher against its major counterparts. Read on to get the details! Read more…

Euro (EUR)

Pain from Spain! That’s exactly what the euro got yesterday, as it got battered by its major counterparts after a credit rating agency downgraded Spanish debt. EUR/USD slipped below the 1.2500 handle and closed at 1.2499 while EUR/JPY dipped to the 99.00 level. Read more…

British Pound (GBP)

Talk about dropping the ball! The pound held its own quite well against the dollar and the yen during the Tokyo and London sessions, but late in the New York session, it fell to pieces! GBP/USD slipped from the DO to end the day 49 pips lower at 1.5635, while GBP/JPY slid 34 pips to 124.33. Read more…

Japanese Yen (JPY)

With risk aversion dominating markets, who needs to look at Japan’s economic data? The yen roundhouse-kicked its counterparts down the charts again as concerns in the euro zone heated up. When will the yen’s supremacy end? Read more…

Canadian Dollar (CAD)

“Save yo drama for yo mama!” yelled the Loonie yesterday as it got dragged down by euro zone debt concerns but managed to recoup its losses by the end of the day. The Canadian currency even ended positive against the Greenback, with USD/CAD closing 10 pips below its 1.0240 open price. Read more…

Australian Dollar (AUD)

It stops at two! Just when we thought that the Aussie bulls are aiming for strike three, AUD/USD took a breather from its gains yesterday. The pair only reached an intraday high of .9899 before risk aversion eventually dragged it to its .9841 closing price. Read more…

New Zealand Dollar (NZD)

Little by little, the Kiwi is chipping away at the Greenback’s recent gains! For the fourth straight day, it managed to end stronger against its American counterpart as NZD/USD finished 15 pips higher at .7623. Will it make it five in a row today? Read more…

Swiss Franc (CHF)

Not much action on Swissy pairs yesterday as USD/CHF and EUR/CHF hardly budged from their opening prices. While USD/CHF ended 25 pips higher at .9611, EUR/CHF slipped just 6 pips down to 1.2016. Will we finally see big moves today? Read more…

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

In forex trading, you get better odds at securing pips when your fundamental analysis is complemented by technical analysis.

Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!

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May 30, 2012

JFDI

Filed under: Forex Strategies — Tags: — admin @ 4:43 pm

 Many years ago when TMM were junior probationary assistant trainee dealers they came across this term scrawled over deal tickets that were being sent back to the back office after a query. When consulting with medical friends it appeared that it was also commonly used on path lab requests returned asking why the test was necessary. Now TMM are screaming it at their screens every time they see a headline along the lines of “XYZ European central bank/government/politician hasn’t yet decided on anything”.

So please –  Calling all Eurostriches, rabbits in headlights, procrastinating bureaucrats hopelessly out of their depths, policy wonks who can’t bend the current rules enough to fit, political leaders having to cope with something beyond local opinion polls, Germans hung up on outdated fears of hyperinflation, Frenchmen hung up on not being peripheral and peripherals who just don’t realise the game is up ….    JUST F’ING DO IT!

If it involves kicking Germany out with Greece; if it involves pawning the Sistine Chapel, Alhambra, and the Elgin Marbles (again); if it involves running the printing presses until they melt; if it means nationalising banks under a  general Europe umbrella raather than a domestic one; even if it involves taking us back to the stone age  – PLEASE JUST GET ON WITH IT! Some of us have lives to lead and watching the sandcastle of the Euro dissolve as the tide of reality comes in, is as predictable, sad and frustrating as watching the real thing at the end of a balmy day on the beach. Either kick it down, walk away or get the JCBs in to protect it with a 30ft coffer dam as some of us need to move on.    

But still it drags on. Yet again today’s headlines continue to be a passage of indecision, full of “nots” and “haven’ts” against “wills” and “doings” whilst the market is fast evolving into a “no news is bad news” mode and until we can get this elephant out of the room we can’t focus on what else is going on in the real world. For now it’s a mad world. And we know it’s a mad world when:

– Denmark issue at negative yield.

– Taking on the SNB is a near free option.  

– Headlines appear 12yrs out of date – ECB SAYS NONE OF EIGHT EU COUNTRIES UNDER REVIEW MEET REQUIRED STANDARDS TO JOIN EURO CURRENCY UNION

– UK politics freeze up in apoplexy over a U-turn on a tax on hot pies.

– Robert Mugabe is appointed UN “Leader of Tourism”

Team Macro Man have given up and are wandering up the beach to the Pub.

Tuesday Charts 5/29/12

Filed under: Technical Analysis — Tags: , , — admin @ 3:06 am

A lie gets halfway around the world before the truth has a chance to get its pants on. ~ Winston Churchill Good morning. Euro remains under pressure, but still holds above $1.2500 support. Dollar maintains bullish trend while above support layer formed by the two horizontal lines seen below USD Index  S&P500 Recovery fails to Read More


© 2012 FX Trading Blog

Daily Forex Fundamentals – May 29, 2012

Filed under: Currency Charts — Tags: , , , — admin @ 1:29 am

What’s on the Economic Horizon

U.S. and European traders return from 3-day weekend
U.K. CBI realized sales index to slip to -7
New Zealand building consents to print another big increase?

U.S. Dollar (USD)

As the saying goes, “you win some, you lose some!” The dollar got a taste of both victory and defeat yesterday as it marked gains against the euro but edged lower against the yen. What’s in store for it today? Read more…

Euro (EUR)

Nice try, euro bulls! Just when we thought that the euro might finally catch a break, concerns on Spain dragged the common currency by the end of the day. EUR/USD fell by 45 pips, while EUR/JPY also slipped by 39 pips. Read more…

British Pound (GBP)

After gapping higher against the Greenback over the weekend, the pound slid back down as the day dragged along and eventually closed the gap. GBP/USD dipped to a low of 1.5663 then ended the day at 1.5665. Read more…

Japanese Yen (JPY)

There ain’t no stopping the yen! Among the three most traded currencies, it was the strongest performer as it posted gains against both the dollar and the euro. Will the markets continue buying up this safe haven currency? Read more…

Canadian Dollar (CAD)

Finally, a breather for the Loonie! Thanks to improved risk sentiment in markets, the Loonie was able to put a stopper on its losses. USD/CAD dropped to an intraday low of 1.0220 before it capped the day at 1.0255. Read more…

Australian Dollar (AUD)

Score another one for the Aussie! For the first time in a long time, it recorded its second straight win against the dollar as Aussie bears took a breather and allowed bulls to take control over AUD/USD. Will this pair continue to soar? Read more…

New Zealand Dollar (NZD)

NZD/USD gapped up over the weekend and the pair struggled to stay above its week open price of .7585 the entire day. The pair spiked to a high of .7645 but crawled back down to close at .7587. Can NZD/USD make bigger moves today? Read more…

Swiss Franc (CHF)

So much for getting a headstart against the Greenback! USD/CHF quickly closed its weekend gap as the pair failed to stay below its week open price of .9556 and rallied towards the .9600 handle instead. EUR/CHF, on the other hand, had a relatively peaceful day as it consolidated around the 1.2020 area. Read more…

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

In forex trading, you get better odds at securing pips when your fundamental analysis is complemented by technical analysis.

Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!

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May 29, 2012

Sinostriches

Filed under: Forex Strategies — Tags: — admin @ 4:43 pm

TMM have been suffering deja vu. Groundhog year perhaps.

The check list –

European spreads – check
Bank bailouts needed – check
Equity markets on the slide – check
Complete and utter silence from the very people that should be seen to be taking control of the situation – CHECK CHECK CHECK!!!!

The Eurostriches are back. We have just revisited our first post on the Eurostriche back in summer 2010 to remind ourselves of their morphology and were struck by the familiarity of conditions to the point of depression. Unfortunately the one noticeable difference was the amounts mentioned that would shock the market. Today we need to have at least one more zero added. E30 billion? Pah ! That’s nothing!

Back in 2010 the market was looking East for the ultimate bailout, but today Voldermort and his Death-eaters appear to be too distracted patting out the flames on the hems of their own robes to worry about taking over the world. But TMM are worried that China is starting to suffer from the same disease as Europe. That of the Eurostriche.

The last policy response we saw from the bridge of the Chinese ship was to ram the engines into reverse to counter a boiling property market. Now whilst TMM have no love of Chinese property developers, cement magnates or officials who use informal financial channels in Macau to take cash offshore, there is a difference between a smack around the chops, solving the root of the problem (political accountability, abominable oversight of SOEs and a need for “real deal” control style privatization) and putting the whole economy into cardiac arrest with a credit/fiscal baseball bat to the head.

But since this last response, the infighting between the Captain and his officers on the bridge of the Chinese economy appears to have left no one in charge of the controls. Only the PBOC appears to be tinkering around the edges and TMM think they should stop behaving like a former pimply 15 year old turned 30 year old overpaid banker/fundmanager, jumping up and down on the couch at Spark in Beijing celebrating its newfound cultural relevance and realize that it is doing as much to bully the economy now as the property developer bovver boys do when doing “land consolidation”.

This morning there was rumoured hope of a new stimulation package but this was swiftly countered by *CHINA HAS NO INTENTION TO INTRO LARGE SCALE STIMULUS: XINHUA. TMM would like to believe that this is a comment on the lines of the Bernanke Put, to be taken as meaning that they have no intentions as there is no need, rather than there would be no intentions even if there is a need. Or rather, that the easing this time around is unlikely to be the “just throw a couple of trillion of loans at it”, and more about targetted easing, particularly on the fiscal side.

Yet TMM do have a terrible fear that the diseases of political paralysis that has been seen in the US during its debt ceiling debates and in Europe with the lack of string hand response, is now breaking out in China. If TMM don’t see any signs of faster implementation of Chinese infrastructure projects then we are going to be dreaming up a new Ostrich term for the Sinocrats.

Sinostriches perhaps.

Daily Forex Fundamentals – May 28, 2012

Filed under: Currency Charts — Tags: , , , — admin @ 1:28 am

What’s on the Economic Horizon
U.S. traders on Memorial Day holiday
Japanese household spending & retail sales data on tap

U.S. Dollar (USD)

U.S. markets are closed today in commemoration of Memorial Day, but that doesn’t mean the Greenback would be in for a lazy day. The dollar gapped lower against most of its major counterparts over the weekend, suggesting that traders could be gearing up for something big. What could it possibly be? Read more…

Euro (EUR)

With the threat of a “Grexit” still looming over its head, the euro found itself continuing its steady crawl down the charts last Friday. It lost another 19 pips to the dollar as EUR/USD greeted the weekend at 1.2513, while EUR/JPY slid down another 9 pips to 99.68. Read more…

British Pound (GBP)

Are the pound bulls and bears ready for a reversal? Thanks to the lack of data from the major economies, the pound ended the day almost unchanged against its counterparts last Friday. Read more…

Japanese Yen (JPY)

The Japanese yen’s performance was as mixed as a bag of nuts last Friday, but it did manage to end the week higher than its major counterparts. This week, the yen gapped down against its rivals so let’s take a look at the catalysts that could get these gaps filled. Read more…

Canadian Dollar (CAD)

Another day, another loss! For the fourth straight trading day, the Loonie gave up pips to its American counterpart as USD/CAD climbed another 25 pips up to 1.0296. Will the 1.0300 resistance level finally give way today? Read more…

Australian Dollar (AUD)

Now that’s how you put up a strong fight! Despite the strong wave of risk aversion, the Australian dollar managed to hold on tight and end the day unchanged against the U.S. dollar. Will the Aussie be able to keep itself from getting wiped out this week? Read more…

New Zealand Dollar (NZD)

Phew! For the second day in a row, the Kiwi was able to catch a breather on its string of losses against the Greenback. NZD/USD tipped an intraday high of .7586 before it finished the day with a 17-pip gain at .7542. Read more…

Swiss Franc (CHF)

Have I forgotten to dust my monitor again, or did EUR/CHF actually show some action last Friday? EUR/CHF spiked to a high of 1.2038 before it capped the day back at 1.2011. Did someone play Adele’s Rumor Has It again? Read more…

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

In forex trading, you get better odds at securing pips when your fundamental analysis is complemented by technical analysis.

Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!

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May 28, 2012

This Is How You Get Got

Filed under: Forex Strategies — Tags: — admin @ 4:43 pm

You’re in the Bushveld digging up rocks
Got, this is how you get got
LSE listed and offshore borrowings too
Got, this is how you get got
Trying to hustle in Africa without breaching FCPA
Got, this is how you get got
Some guy called Paulson said “I like your stock a lot”
Got, this is how you get got

TMM can’t help but think of the lyrics of Mos Def’s “Got” warning of the dangers of flaunting wealth when thinking about precious metal miners. GDX, the largest ETF covering gold miners has flown high and far since the end of 2008 and it supercharged much of the more inflationista funds’ returns. Palladium is the standout but all of them ripped and ripped hard through mid 2011. If you were buying gold and particularly gold equities till you were almost blacking out you could do no wrong.

Recently however, this has changed as can be seen below. The first chart is gold versus GDX.

The second is a bunch of platinum miners and platinum and palladium. As you can see, for both the equities are not just doing really badly, they are underperforming physical in a big way.

Not that physical is looking healthy in gold – TMM’s brokers indicate that given the stuttering out and decline in ETF ounces for gold seen below in white is a big part of the drop in physical (orange). Were it not for central bank dip buying things would likely be much worse.

So, aside from TMM’s view that you’ve heard before – you know – that this recovery in the US is sustainable enough to not justify merciless slotting of USD as an investment strategy anymore – TMM thought it would be good to give you a couple of choice quotes from Eastern Platinum, a South African Platinum miner that they released in May last year.

On Friday 6th May, mine vehicles were driven by employees through the security gate to the Zandfontein Mine causing damage to mine property.  Employees then embarked on unprotected industrial action. Mine services at both Zandfontein and Maroelabult underground mines were also damaged, and for safety reasons, the management at CRM instructed the mines to be vacated. Approximately 180 workers then proceeded to unlawfully occupy the mines. Mine management advised employees to cease this illegal action, and simultaneously, a court interdict against NUM and its members was granted that instructed NUM and the employees involved to cease the action and vacate the mine. The workers involved made several demands to management, as well as threats of damage to mine property and underground infrastructure if management did not comply with these demands. To safely resolve this situation, to prevent it from escalating, and to safeguard the overall integrity of mine installations, management had numerous meetings with NUM and instructed them to ensure that their members vacated the mine and ceased their unprotected strike action. An offer was made by mine management to resolve the situation but this was rejected by NUM and/or the employees involved who refused to vacate the mine and made yet further demands of management that were rejected. As these workers refused to vacate the mine, the offer made by management was then withdrawn.
Following the failure to resolve this illegal action by some of their members, NUM invited the Congress of South African Trade Union (“Cosatu”) to assist in negotiations with the instigators of the illegal industrial action. Certain statements were made by the Cosatu and NUM representatives to their members in order to encourage them to vacate the mine. There was no agreement in place between CRM and NUM/Cosatu at this time. The workers involved in the illegal action subsequently vacated the mine.

Stuff happens, but stuff happens more in emerging market countries that have bad institutions and whose labor unions are the political support base of the ruling party as the NUM is with the ANC. TMM would like to say that anyone who thought doing business in South Africa was going to be easy or allow one to earn the excess return of precious metals over the contents of South African CPI or any other wages proxy failed in a big way to understand this country. If you want to own a mine you don’t just need high metals prices, you need them to rise faster than your costs. TMM think that mining in South Africa and having your profits increase very quickly is a bit like Mos Def’s description of flashing all of your rocks in Brooklyn. Dangerous, and not a long run equilibrium.

TMM are still negative on South Africa where most of the gold and PGM output comes from, miners in bad jurisdictions and when we want to short USD we find something cheap, not something shiny. All great parties have to end and TMM thinks it time to call this one whatever the gold bugs say.

May 27, 2012

Week Ends Up 210 pips

Filed under: Forex General — Tags: , , — admin @ 5:31 pm

This week saw the exit of the two positions that were opened prior to the start of the week. The GBPJPY netted the majority of the pips, whereas the EURAUD brought a slight profit but I only recorded the trade as breakeven.

The week ahead doesn’t look too magnificent with trades, but that’s okay because we’re not in the business of getting a buzz but rather making consistent profits. In today’s video I make mention of some trading ideas on how you can use trend lines to trade reversal patterns successfully. While I love trading breakouts I certainly shouldn’t rule out the possibility of being able to trade reversals using trend lines should the time need it!

Anyway, I hope you all had a successful week and I look forward to reporting again next weekend.

May 26, 2012

Charts to End the Week 5/25/12

Filed under: Technical Analysis — Tags: , , — admin @ 3:07 am

In these days, a man who says a thing cannot be done is quite apt to be interrupted by some idiot doing it. ~ Elbert Hubbard Good morning. The euro continues decline, being set for the biggest weekly loss this year, while the dollar is testing fresh highs – after a minor correction from 81.70 to Read More


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