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July 31, 2013

Daily Forex Fundamentals – July 30, 2013

Filed under: Currency Charts — Tags: , , , , — admin @ 1:30 am

What’s on the Economic Horizon

Spanish GDP and German Gfk on tap for the euro
U.S. consumer confidence to boost the dollar?
Japanese reports surprise to the upside

U.S. Dollar (USD)

And so it begins. The NFP week volatility started off with the Greenback on top of its major counterparts as a strong U.S. report supported an overall risk aversion theme in the markets. EUR/USD and GBP/USD saw losses while USD/JPY and USD/CHF posted gains. Read more…

Euro (EUR)

Uh oh. It looks like the euro wasn’t able to shake off its Monday blues yesterday. The shared currency finished lower against most of its counterparts with EUR/USD down by 21 pips at 1.3266 and EUR/JPY ending 47 pips below its opening price. What happened to all the swag we saw last week? Read more…

British Pound (GBP)

Monday shaped up to be a bad day for the pound. After opening the day at 1.5384 versus the dollar, the pound trickled slowly throughout the day, ending the U.S. trading session at 1.5350. Read more…

Japanese Yen (JPY)

The party continues for the yen bulls as overall risk aversion dragged on the yen crosses. Did Japan’s reports have anything to do with the yen’s performance?! Read more…

Canadian Dollar (CAD)

The Loonie is back in the green! After ending last week’s trading with a loss to the dollar, the comdoll bounced back yesterday. USD/CAD finished the day lower at 1.0260 after starting at 1.0278. Read more…

Australian Dollar (AUD)

The Aussie was one of the biggest losers against the Greenback yesterday after AUD/USD closed 53 pips lower than its open price. And that’s with no data out from Australia! Read more…

New Zealand Dollar (NZD)

After almost two days of consolidation, the Kiwi experienced a nosedive yesterday. It began the day .8080 versus the Greenback but found itself sharply lower by the end of the U.S. trading session. It closed the day 50 pips lower at .8030. Read more…

Swiss Franc (CHF)

Monday turned out to be a painful day for the Swiss franc as it was unable to hold its ground versus the U.S. dollar. The USD/CHF pair began the day at .9283 but ended the U.S. trading session 23 pips higher at .9306. 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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July 30, 2013

Holidays

Filed under: Forex Strategies — Tags: — admin @ 4:42 pm

TMM are spreading themselves a bit thin over the next two weeks due to holidays, so posts will be even less frequent (if at all).

We are going to have crack at re-enacting one of the best ever film openings – The one from Sexy Beast.

In the meantime please use comments to keep discussions alive, especially the joke themes.

Daily Forex Fundamentals – July 29, 2013

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

What’s on the Economic Horizon

Yen Dominated Friday’s Trading
U.S. Pending Home Sales on Tap

U.S. Dollar (USD)

Booooooooring. Due to the absence of high profile economic data, EUR/USD’s price action was as dead as a doornail last Friday. After opening the Asian trading session at 1.3286, the pair simply moved sideways, finding support at 1.3252 and resistance at 1.3298. It closed the day barely changed at 1.3282. Read more…

Euro (EUR)

D’oh! That was so close! After gaining ground in early Friday trading, the euro gave up some of its gains against some of its counterparts. This resulted to minimal gains for EUR/USD and EUR/GBP, but significant losses for EUR/JPY and EUR/CHF. What happened?! Read more…

British Pound (GBP)

What a choppy day! GBP/USD moved mostly sideways on Friday, as it jumped to a high of 1.5434 then dipped to a low of 1.5356. Meanwhile, GBP/JPY ended the day in the red as it tumbled to the 151.00 area. What’s in store for the pound today? Read more…

Japanese Yen (JPY)

The yen continued to show everyone who is the real big boss of the foreign exchange market as it rallied strongly versus other major currencies. USD/JPY, for instance, marked its second straight day of winning, falling to 98.17 from 99.19. Despite the yen’s gains, analysts are saying that the yen’s moves are simply corrective, and will not last. Read more…

Canadian Dollar (CAD)

Way to go, Loonie! USD/CAD was slated to end the day with gains last Friday until a report from the unofficial Fed mouthpiece weighed on the Greenback. USD/CAD dropped from the 1.0300 area and capped the day just 5 pips higher than its open price. Booyah! Read more…

Australian Dollar (AUD)

Unless you’re a range trader, you probably despised how AUD/USD moved last Friday. The pair’s priect action was completely directionless as it traded within a wide range. It found support at .9230 and resistance just below .9300. Read more…

New Zealand Dollar (NZD)

Zzz… The Kiwi had a lazy Friday, as NZD/USD simply cruised across the charts. The pair moved between a tight range between the .8100 major psychological resistance and support above .8040. Could it bust out of its consolidation today? Read more…

Swiss Franc (CHF)

After its sharp dive earlier in the week, USD/CHF took a break and consolidated below the .9300 major psychological level on Friday. Which way could USD/CHF go 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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July 27, 2013

Annual Planning Glossary.

Filed under: Forex Strategies — Tags: , , — admin @ 4:42 pm

We are now over half way through the year so why waste those quiet summer months when you could be preparing your business plans for 2014. Whilst there are still 5 months to run TMM have heard the first murmurs of 2014 forward planning. So for all others who have to go through this painful process we offer a glossary of the most popular terms and phrases that appear in every annual plan.

Revenue Projection – A single number that has to be at least 20% bigger than the last one. It is guessed the median of a distribution of probability that is so wide it makes the result irrelevant yet will be held as 100% predictive by the MBAs who run the spreadsheets.

Five Year Plan – A hockey stick graph running flat (investment phase) for 3 years with the pick up point selected to be just beyond when the plan author hopes to have landed a better job leaving those behind to cope with the inevitable underperformance.

Revenue Breakdown by Product – Micro-management for those who believe that your markets are predictable enough to set budgets by but not to allocate risk to.

Leveraging the Franchise – Assuming that large volume sophisticated professionals will pay the same margins as your small retail clients, whilst assuming that your retail clients have an appetite for the products the sophisticated professionals use that are banned for retail use anyway by the regulator.

Low Hanging Fruit – All the business that was harvested 20 years ago by your competition.

Niche Market – Only doing one thing averagely well.

New Initiatives – Painting old initiatives a different colour.

Focusing on Core Abilities – Excuse for lack of investment in new initiatives.

Product Development – Hurriedly patching together something that will hopefully mirror the thing that your CEO read was mentioned in your competitor’s annual report as having generated them outperformance. Guaranteed to be out of date and not profitable by time of implementation.

Cross-Selling Opportunities – Bothering your colleagues for business (instead of the clients) and blaming them for your failure. Missed Cross-Sell deals are always the other department’s fault whilst Cross-Sell success is lauded in management PR memos but in reality results in a bun-fight over internal revenue allocation (if there ever was any).

Account Mapping – A process that involves explaining yet again to management why the world’s biggest product users (a list they read in Forbes in the First Class lounge) are not the easiest or most profitable to deal with and are most often competitors rather than clients.

Staff Development Plans – Finding the least expensive and shortest course to send the fewest number of staff on covering a subject that will not give them aspirations or threaten management but can be used as a weapon against underachievers – “And even though we sent you on the self development course”.

Human Resource Planning – Processing bodies as efficiently as possible whilst negotiating inconvenient local and international laws. See “Japanese whaling ship”.

Team Motivational Planning – Guessing which day of the year will be quietest to buy the team a beer and sandwich.

Run a Tight Ship – Just read “Mutiny on the Bounty” for a fair description of life and inevitable outcome on a “tight ship”.

Dependencies – A list to be ignored by management in a year’s time once budgets are missed due to lack of whatever was on that list.

Cost Allocation – A very large number that you have no control of that is deducted from your profit centre to be given in its near entirety to the IT department in order to guarantee that your technology remains firmly 15 years behind that employed in your village shop.

Travel Policy – An algorithm (or virus) developed by travel agents as complex as any used in weather forecasting. Run by your institution to generate maximum inconvenience for the traveller at costs far in excess of those available online to the rest of the population whilst somehow managing to report “cost savings” to management.

Performance Measures – Probably the cleverest structured product your institution has ever dreamed up. Fashioned on a Las Vegas slot machine, it beams “Play Me” enticingly in bright lights yet achieving a payout involves getting at least 12 bells in a row.

Daily Forex Fundamentals – July 26, 2013

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

What’s on the Economic Horizon

University of Michigan consumer sentiment index to be revised higher
Japanese CPI Ticks Slightly Higher

U.S. Dollar (USD)

So much for ending the day in the green! After getting off to a solid start during the London session, the dollar came crashing lower on weak data, allowing EUR/USD and GBP/USD to soar to new highs. What the heck happened?! Read more…

Euro (EUR)

The euro had another stellar performance on the chart despite the sub-forecast reading from the German IFO survey. Thanks to a strong finish in the New York session, EUR/USD ended 87 pips higher at 1.3285. Read more…

British Pound (GBP)

Talk about a topsy turvy day! The pound traded higher ahead of the much-anticipated U.K. GDP report only to get sold off when the official data came out. GBP/USD dropped like a rock from 1.5387 to 1.5265! However, the currency quickly regained its composure and the pair settled 84 pips above its opening price at 1.5394. Read more…

Japanese Yen (JPY)

Everyone give the yen a forex high five! It just gave dominated the forex market yesterday! With USD/JPY dropping below 99.50, EUR/JPY and GBP/JPY simply followed suit and melted down the chart as well! Read more…

Canadian Dollar (CAD)

The USD/CAD sell-off continues! Snatching away 49 pips from its American counterpart, the Canadian dollar ended the day with another win to extend its rally. Will it do it again today? Read more…

Australian Dollar (AUD)

It was a bounce back Thursday for the Aussie, as it came roaring back yesterday! After opening the day at .9158, AUD/USD rose 100 pips to finish at .9258. Can the Aussie continue to rise? Read more…

New Zealand Dollar (NZD)

Whoa, look at the Kiwi soar! NZD/USD easily flew past the major .8000 handle yesterday following the surprisingly hawkish RBNZ rate statement. The pair finished the day with a whopping 157-pip gain at .8091. Read more…

Swiss Franc (CHF)

The franc looked so darn fine like a rich, dark, moist chocolate cake after a hard day. It rallied strongly against the dollar, finishing with an 86-pip gain as USD/CHF closed at .9292. 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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July 26, 2013

My “Forextra”, Levels in the USD & “Decision Levels”,

Filed under: Currency Charts — Tags: , , — admin @ 3:42 am

This week I covered the levels in the USD that I’m watching as I discuss what the “Forextra” is and why it’s so important. For those of you who have never seen me look at futures markets like the dollar, Dow, crude oil, and gold…these are markets that can impact individual currency stories and it’s vital to know their key levels and trends. I begin this discussion around the 4:00 (minute) mark.

Speaking of key levels, I discuss that it is we’re really trying to discover when we’re drawing lines and levels on our charts. I call trendlines, support, resistance, and even major and minor psychological levels “decision levels” because it’s at these levels that we expect the market to make some sort of “decision” or move. There are three scenarios: Acceleration, Stall, and/or Reversal. We expect one of those reactions at a line we have drawn and the expectation we expect relies on our opinion of market trend and momentum (e.g. expecting a breakout versus a stall and reversal) I begin this discussion around the 9:00 mark.

A few other spots of interest in the video are my Aussie dollar analysis (21:00)

I also discuss the USD/JPY and the Nikkei (30:00)

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Daily Forex Fundamentals – July 25, 2013

Filed under: Currency Charts — Tags: , , , , — admin @ 1:27 am

What’s on the Economic Horizon

German Ifo business climate index to climb to 106.3?
Potential upside surprise in U.K. preliminary GDP
U.S. durable goods orders data on tap

U.S. Dollar (USD)

USA! USA! USA! The markets cheered for the American currency yesterday as it racked up win after win against its major counterparts. Is this the comeback we’ve been waiting for? Read more…

Euro (EUR)

It was quite a good run but all good things come to an end, don’t they? EUR/USD ended its four-day winning streak as it closed in the red yesterday. Was this just a retracement though? Read more…

British Pound (GBP)

And that ends the pound’s reign as king of the charts! For the first time in a week, GBP/USD closed lower, as it finished 70 pips lower at 1.5309. Will yesterday prove to be the turning point for Cable or is this merely a breather for the bulls? Read more…

Japanese Yen (JPY)

The ball was in the court of yen sellers yesterday, as the safe haven currency got no love from the markets. It sold off against the dollar and the euro, chalking up an 83-pip loss against the Greenback while losing 85 pips to the shared currency. Read more…

Canadian Dollar (CAD)

Just when it seemed the Loonie was poised for more gains, it fell victim to Greenback strength during the U.S. session. USD/CAD dipped to a low of 1.0263 before popping back above the 1.0300 handle. What’s in store for the Loonie today? Read more…

Australian Dollar (AUD)

Abandon ship! The Aussie sank like a rock yesterday as disappointing manufacturing data from China led to decreased demand for the high-yielding currency. AUD/USD tapped a high of .9318 before it descended to .9160, marking a 133-pip loss on the day. Read more…

New Zealand Dollar (NZD)

Just like the rest of the comdolls, the Kiwi took a plunge in yesterday’s trading, as NZD/USD dropped to .9159, a solid 144 pips below its opening price. Yikes! Read more…

Swiss Franc (CHF)

The franc gave back some of its gains from earlier this week yesterday, as USD/CHF finished 29 pips higher at .9377. 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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July 25, 2013

Really? Should today’s China news be reassuring?

Filed under: Currency — Tags: , , , , , — admin @ 2:24 am

It’s the nature of financial news media — they have to look for explanations; they have to find reasons; and they have to be first to break the news.

And that’s some of why most of the news that moves markets does so in a short-term feedback loop sort of way. Take this top-of-the-page headline from Reuters this morning:

China moves send world shares higher, dollar softens

So what were China’s moves that so convincingly impacted markets?

According to the article, “Local media in China reported the government was looking to increase investment in railway projects to reduce gluts in steel, cement and other materials as it aims to ensure annual economic growth does not sink below 7 percent.”

Now actually take a moment to think about it, which Reuters obviously didn’t do (or if they did they didn’t care that their conclusion doesn’t make a whole lot of sense.) But I suppose what matters is what traders and investors think about the news.

Here’s what I think:

China is facing a very real credit market dilemma. And they openly recognize the growing risks of perpetuating their investment-led growth model of recent years. Yet they come out now and claim investment can further prop up economic growth and help China avoid a hard-landing.

Maybe in the short-term. Maybe if they create artificial demand for certain commodities and materials by promising railroad projects. Maybe if prices of these commodities and materials don’t fall further, maybe China can convey a sense of economic recovery.

It’s the same modus operandi. And maybe that way of operating still has some life left.

I tend to think it doesn’t. The game is old hat now. And the global environment is clearly not in a position that will allow it to drive new, meaningful Chinese growth.

Finally, the comments in the Reuters article also imply that GDP could reasonably be expected to fall below 7% if China doesn’t take some kind of action … even if it is the kind of action they’ve become reluctant to take because the risks of investment bubbles and credit troubles is growing rapidly, right?

Please excuse me if I’m completely missing something here. But as someone who follows the markets every day, I find nothing reassuring about China’s talked-about “moves.”

But then again, what I find only matters if most of everyone else in the market finds it too.

Perhaps if Reuters instead put this article at the top of their homepage (I found it in small print at the bottom!) the market would find little reason to cheer today. Here is an excerpt:

The bank measures come as China’s cabinet said this month it would cut off credit to force consolidation in industries plagued with overcapacity. This was shortly after China Rongsheng Heavy Industries Group, the country’s largest private shipbuilder, fell into financial turmoil.

Beijing did not specify then the industries it had in mind, though in 2009 it named nine, including shipbuilding. Industry sources said neither the banking regulator nor any central government agency had issued new rules on tightening lending to shipyards or other industries.

That’s just one example of the changing credit and lending environment across China. Creating artificle demand in some industries (e.g. housing, railroads) can only compensate for lost growth in other areas for so long.

Will the 7% threshhold be tested this year? Or will China be able to evade major risks even longer?

The mood has generally improved recently. But that, of course, lays the groundwork for disappointment.

Stay tuned.

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Daily Forex Fundamentals – July 24, 2013

Filed under: Currency Charts — Tags: , , , , — admin @ 1:27 am

What’s on the Economic Horizon

Euro zone PMIs expected to show improvements
U.S. new home sales seen higher
RBNZ rate statement just around the corner

U.S. Dollar (USD)

The dollar bears were at it again yesterday after data from the U.S. revealed more weaknesses. EUR/USD shot up by another 39 pips while USD/CHF ended the day 59 pips lower than its intraday high. What gives? Read more…

Euro (EUR)

There goes the 1.3200 handle! Even without help from economic reports, the euro was able to rise to new highs, claiming control over EUR/USD and taking the pair up 39 pips higher to 1.3224. What’s next? Read more…

British Pound (GBP)

Mixed trading for the pound, which edged higher versus the Greenback but took a tiny hit versus the euro. What could be in store for all you pound traders today? Read more…

Japanese Yen (JPY)

The yen’s performance was as mixed as the colors of Happy Pip’s shoes as yen traders reacted to a BOJ report as well as the other currencies’ price action. The Asian currency gained against the Greenback but lost to the euro, pound, and the Aussie. Read more…

Canadian Dollar (CAD)

Boom goes the dynamite! USD/CAD exploded downwards yesterday as the Loonie put up its biggest win in almost two weeks! The pair opened at 1.0343, slid 57 pips, and ended the day at 1.0286. Read more…

Australian Dollar (AUD)

Strike three! AUD/USD gained for a third straight day in a row even though Australia didn’t chip in any economic report. Was the pair’s 50-pip uptick all about the Greenback then? Read more…

New Zealand Dollar (NZD)

Make that SEVEN days in a row that the Kiwi has edged higher! NZD/USD finished trading a shade under the .8000, marking a 40-pip gain on the day. Read more…

Swiss Franc (CHF)

After stumbling early on, the Swiss franc made a nice comeback late in the day to edge higher versus the dollar. USD/CHF finished at .9349, down 15 pips on the day after it had traded as high as .9407. 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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July 24, 2013

Europe. Are you long?

Filed under: Forex Strategies — Tags: , — admin @ 4:45 pm

Back to Europe

Growth – European PMI data this morning was good across the board and Italian retail sales outperformed too. It looks as though the crashing fighter pilot of European growth has started to pull up and is skimming the treetops having managed to avoid disaster. Which is nice for us.  

Unity – Germany’s data was strong but it is worth considering the disparative impact a China slowdown would have on Europe. Germany, the great supplier of capital goods and modern machine tools is most likely to feel the cool breeze ahead of other Euro nations (barring Italian high end fashion). Which leads TMM to see another benefit to Europe overall. Recent German data has already pointed to an increase in intra-European trade and a further decline in external Asian demand will continue to flatten out the economic differences between Germany and the peripherals that in the past have resulted in the stresses within  policy unity. So basically, Germany getting “Edward the Seconded” (see glossary) by China/Asia demand is good news for European policy unity and should encourage relative longs of Peripheral equities over German stalwarts.

Positioning – OK, hands up if you are long Eur/usd. You are? Well we think you are pretty lonely out there. Despite a drop in Usd longs against a pick up of Euro longs in some reports we see, the trend we detect is that most still want to be long Usd (well they are raising rates aren’t they? And look at their growth!) and short Europe (they have to cut rates next or at least stay on hold for eternity don’t they?). The rallies in the likes of Eur/Usd (and Aud/Usd for that matter) have so far been met with “sell the rally, great opportunity to buy more USDs”. Which reinforces TMM’s belief that few have the upside trade on.  We noted a couple of posts back that historically US rate rise environments of the past in have actually seen USD fall in the following months, now whilst the circumstances are indeed different this time, that fact is another barb in the complacent “long usd” meme.

Meanwhile in the US, it’s nearly August so that must mean we are approaching Debt Ceiling silly season again and it looks as though the Republicans are lining up a  “Monty Python Black Knight” scene with their proposed budget cuts. It may well be noise but it is another road bump in the path of dollar strength.

So TMM are beginning to think that if European policy makers can maintain the summer STFU policy so well used in 2010, Eur/Usd could be set for one of those up moves that “shouldn’t have happened”

However there is one other place that TMM fancy being long Euro -  Against gold. The retracement in gold higher has seen the monstrous short positioning level out and as we still don’t see a compelling macro story for it, we are looking to reshort. Hearing scare stories of physical demand emptying vaults (Hero Zedge having gone into desperate, even for them, overdrive recently) fits a nice psychological profile that upside is now expected/discounted. India increasing restrictions on imports on Monday is just another weight on its progress.

We hereby brace ourselves for the gold trolls in the comments section. Tin Hats. 

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