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April 20, 2015

3 quick bullets

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

* The PBOC dropped the hammer with a 100 bp RRR cut, predictably sending the AUD into raptures (well, relatively speaking) as of the time of writing.   Chinese reserve requirements have historically been a lousy explanatory variable for AUD and other FX on any but the most micro of time frames, and this case should be no different.   It’s important to recognize the sea change that’s occurred in China’s FX reserve holdings- they’re not going up any more.   To be sure, some of the decline has represented a fall in the value of non-USD currencies in the basket (cough, euro, cough), but the sheer scale of the recent falls is highly suggestive of actual sales due to speculative capital flight.  That, in turn, sucks RMB out of the system, and a nice RRR cut is an easy way of putting some liquidity back into the money market by loosening up dead cash on bank balance sheets.  The chart below from Reuters illustrates the volte-face in China’s FX reserves quite nicely.

* So glamour boy Yanis Varoufakis has warned of possible contagion if Greece exist the euro.   Well, duh…one would hope that the Troika (or whatever they’re called now) has at least some idea of what the impact would be and how they might react.   Indeed, given 5 year BTPs last traded hands at a princely yield of 71 bps, once could easily argue that the ECB QE has proacted against a Grexit, mitigating the need for a reaction.  File this one under “man who desperately needs lots of money warns that bad things will happen to people who currently have lots of money if he doesn’t get some.”

* Is it just Macro Man, or has the SPX turned into the equity index version of pre-January 15 EUR/CHF: flat-lining and utterly uninteresting with all the action elsewhere?  It’s a big week for earnings coming up, but it’s hard to say if they will even matter; Friday’s SPX close was more or less identical to the opening price on the last trading day of last year.   Zzzzzz.   While there is of course a saying that you should “never short a quiet market”, there’s an even more interesting one suggesting to sell in May, a month which is just around the corner.   Lazy longs in EUR/CHF got their comeuppance….will the same happen to the Spooz?

June 25, 2013

Busy Bounce day – quick thoughts

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

Busy day but mood has improved at camp TMM as there are signs that the storm is subsiding. But here are a real mish mash of thoughts.

– Chinese stock turns -6% to flat. Monstrous great “hammer” on the candlestick charts. Can’t see that being overcome on the downside for a while. Similar patterns all over the place.

– FED First attempt to rein in the runaway herd. Fisher/Kocherlakota (axalotl? strange fish theme?)

– FED comment as heard by markets reminds us of this Far Side cartoon

(just substitute “Tapering” for “Ginger”)

– Turnaround Tuesday? US has turned any minor rally that has started in European time. First time for an abatement? 

– BUT – 10y yields, once they hit their highs, may not come back that much.  Maybe 20bps or less…  The front end might but the 10 yr is seeing a fundamental repricing.

– Draghi is under pressure, Coeure comments reiterate easy policy needs – heightens differences and undermines Euro.

– Chinese saying they may release the liquidity noose, but no idea how fast or how many casualties.

– Bradley … OOOOH !!  Forgive TMM a bit of their own witchcraft now and again, but to suddenly notice that Bradley and his amazing Siderograph call this years big trend turn as last weekend has us going OOOOH. Especially as this is the biggest for a few years. As ever, there is something for everyone here as timing is plus or minus a few days so it could encompass the turn last Wednesday night OR it could mean we bounce after this sell off. But way, take it as a free gift to back whichever view you fancy. We’ll take an up move. 

– FX sell offs stopped yesterday leaving other underlying assets to continue their falls. Sign of first hedges done and second stage underlying asset unwind taking over = panic over, near completion of first wave? 

– Many things don’t fit the normal RORO trade, as this is possie liquidation rather than classic risk off. It’s positional risk off not traditional macro risk off.

– Are we seeing 5 minute macro putting on the 3 year trades again (compare with JPY and Nikkei over shoot and pull back)?

–  US data coming out strong this afternoon. Unaffected so far re post FED asset price moves as all pre FED readings.

–  How much asset price damage is needed to trigger feedback -> Confidence -> Economy slipping down again? Need to see post Fed confidence samples. 

– TMM feel like the matador in today’s press – Gored again after having just returned to long equities.

July 10, 2012

A Quick 20 Questions

Filed under: Forex Strategies — Tags: , — admin @ 4:44 pm

Between now and the end of 2012.  

Which global stockmarket would you be longest of?

Which global stockmarket would you be shortest of?

Which Soveriegn bond would you be longest of? 

Which Sovereign bond would you be shortest of? 

Which corporate bond would you be longest of?

Which corporate bond would you be .. no forget that .. too many dogs out there. 

Will any corporate bond yields also have gone negative?

Which commodity would you be longest of?

Which commodity would you be shortest of?

If you are short of Euros what catalyst would you need to buy them again?

Where will Chinese RRR and depo rate be at year end?

How far will UK yearly rainfall have deviated in % from average ?

How far will US yearly rainfall have deviated in % from  average?

Will the UK coalition still be in place? 

Wil France have needed a bailout?

Will the US elections matter on a global level?

Will the SNB still be maintaining the 1.2000 EUR/CHF peg?

How many bankers be in prison  post Liborgate?

How many journalists be in prison post Leveson?

How many (more) politicians be in prison?

Will John Terry be in prison? 

February 18, 2012

Quick Risk-On Friday Charts

Filed under: Technical Analysis — Tags: , , , — admin @ 3:05 am

The forceps of our minds are clumsy forceps, and crush the truth a little in taking hold of it. ~ H. G. Wells  Good morning. Last two days have been a mix of good and bad for the risk-sensitive currency pairs as the Japanese yen recovered across the board on Wednesday, but switched direction yesterday, on Read More

© 2012 FX Trading Blog

July 3, 2011

EURUSD Quick Comment and Few Setups to Start the Month With

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

Quote of the day: “Finance is the art of passing money from hand to hand until it finally disappears.” – Robert W. Sarnoff
EURUSD – 1.4543 @06:42 GMT
Good morning. Euro is pushing above $1.45 so I had to exit my last short, expecting the pair to continue to the upside ahead of next week’s ECB rate hike. In case of an intraday pullback, look for support around 1.4500 on first phase and 1.4450 lower. The US ISM Manufacturing Index is the most important event in the economic calendar today.
Trading strategy: standing aside
Support: 1.4500, 1.4450, 1.4400/30, and 1.4300/20
Resistance: 1.4550, 1.4600 and 1.4700
Market sentiment: Read More

© 2011 FX Trading Blog – |
Article Source | Post tags: CHFJPY, ECB, EURCHF, EURUSD, GBPUSD, Interest Rate Decision, USDCAD

June 16, 2011

Quick Turnaround!

Filed under: Business — Tags: , — admin @ 12:27 am

Well that was short-lived. All of the relief from yesterday’s Chinese economic reports can basically be thrown out of the window as leaders in the Euro zone can’t seem to get there act together. In what has been become a spectacle that would make Sophocles proud, the Greek debt crisis has appeared on all stages: first starting as a drama, then becoming a tragedy, then a comedy, then back to drama, now approaching tragedy again!

Yesterday’s emergency meeting of leader failed to produce anything and the major outcome that was reported was “bickering”. EU leaders need to come up with a solution by the end of the month in order for Greece to secure an IMF payment which could be withheld if no action is taken. Germany is still insisting on measures that would constitute a default, and no resolution appears close.

It is patently clear that Germany is the obstacle in this process and while bailouts aren’t my cup of tea, if they want to save the Euro then they need to compromise. Germany stands the most to lose in this entire ordeal, so in my opinion they are negotiating from a position of weakness and not strength. Stay tuned for this one!

In the UK jobless claims came in three times higher than expected and wage growth has slowed though the unemployment rate has remained steady at 7.7%.

US CPI data is due out later this morning and is expected to vindicate Bernanke as fuel costs have come down. Yesterday’s regalia of Bernanke and the Fed may have stolen the headlines from the re-opening of “Spiderman” on Broadway as the best staged event of the day!

So the markets have started the day in risk aversion mode, with stocks and commodities lower around the globe. Lost in yesterday’s excitement over tame Chinese CPI is the fact that raised bank reserve requirements in an attempt to slow their economy.

In the forex market:

Aussie (AUD): The Aussie is higher to start the morning despite the risk aversion in the marketplace. Yield-seekers see a positive economy and the RBA honcho’s conflicting comments that inflation was more likely than not could foreshadow a possible rate hike. New dwelling starts rose 3.1% vs. an expectation of a decline of .8%. (Click chart to enlarge)


Kiwi (NZD): The Kiwi is lower across the board despite a much better reading of consumer confidence from last month. Considering that they were dealing with an earthquake last month, this was to be expected. Risk aversion and money flows are putting pressure on the Kiwi.

Loonie (CAD): The Loonie is mixed despite lower oil prices to start the morning. The fate of the Loonie lies somewhat with the US CPI data and what the market response to the release may be.

Euro (EUR): The Euro has given back all of yesterday’s gains and then some. While Euro zone industrial production figures came in better than expected, the problems with the Greek debt crisis are weighing heavily on risk in the markets. (Click chart to enlarge)


Pound (GBP): The Pound is mostly lower after jobless claims came in showing an increase of 19.6K vs. an expectation of 6.5K. While the UK economy is definitely slowing, how the avoid stagflation is anyone’s guess.

Swissie (CHF): The Swissie is mixed as its safe-haven properties are counter-balanced by the sentiment that the SNB will not raise interest rates due to recent franc strength. Declining import prices reflect Swissie strength.

Dollar (USD): The Dollar is higher across the board as risk aversion ahead of this morning’s CPI data release and specific Euro weakness are driving demand. Should inflation come in less than expected, pressure for higher rates would abate.

Yen (JPY): The Yen is surprisingly mixed this morning as well, as risk aversion has increased demand, yet not enough to unwind carry trades. With the risk coming from Europe, it appears as though money flows are driving price action. The Nikkei was actually higher last night, the only major market index to post gains.

As you can tell by now, sentiment in the marketplace can shift on a dime and there is still major risk around the globe. Some days the positives are emphasized (like yesterday), while others the negatives shine through.

The problems in Europe are too great and the Greek situation may be a microcosm of what is really taking place. Germany is playing with fire in this situation and ultimately they might end of getting burned before they drag everyone else into the fire.

While the rest of the globe has a “wait and see” attitude at this point, European leaders essentially have 2 weeks to get this figured out. So while the only fireworks expected this summer should occur on July 4th, there may be other “independence” celebrations taking place.

Of course this bound to bring about a lot of pain as well, and certain market volatility. So don’t take time away this summer, as the action may be too great to miss!

To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!

To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing market!

Tags: account, AUD, Aussie, blog, cad, course, currenc, currency, currency trading, dollar, dow, economy, EUR, Euro, forex, forextrading, free, fx, fxedu, gbp, Il, jpy, market, Mike Conlon, nzd, practice, ssi, time, trade, USD, Yen

March 4, 2011

Quick Short-Term Update 03/03/11

Filed under: Technical Analysis — Tags: , , , — admin @ 3:05 am

Hi. Just a quick update to yesterday’s thoughts & charts
The euro rallied well over 1.3850 today as Jean-Claude Trichet said that policy makers may soon hike interest rates to fight inflation. We are currently trading 40 points away from $1.40 and there’s no sign of exhaustion. However, I doubt we’ll see a break above 1.40 before the NFP – but a weekly close above 1.3850 is quite possible. My plan to buy at 1.3850 earlier today worked well and the position is at +100 pips right now. I will look to close half if price pulls back towards 1.3930 and let Read More

© 2011 FX Trading Blog – |
Article Source | Post tags: AUDUSD, breakout trading, EURJPY, EURUSD, Trichet, unemployment, USDCHF, USDJPY, USDPLN

February 18, 2011

Quick EUR, USD Thoughts and Thursday Links

Filed under: Technical Analysis — Tags: , , , — admin @ 3:05 am

“Before the effect one believes in different causes than one does after the effect.” – Friedrich Nietzsche
Good evening. Let’s take a quick look at some interesting euro, dollar and silver charts.
EURUSD is little changed since yesterday but what’s important is that it trades higher for 3rd day in a row and notable short-term resistance zone is currently being tested near the 61.8% of last down leg from 1.3745 to 1.3430

EURUSD 4hrs chart 2-17-2011

When zooming in the charts, looking at the hourly one – we notice the steady recovery in the last 3 days.

EURUSD hourly chart 2-17-2011

One may say that it’s Read More

© 2011 FX Trading Blog – |
Article Source | Post tags: Ben Bernanke, Dollar, Euro-zone crisis, EURUSD, funny pictures, John Taylor, Keynesian economics, music, recommended articles, Silver

January 27, 2011

Quick post-FOMC Charts and Links

Filed under: Technical Analysis — Tags: , , , — admin @ 3:08 am

Hello everyone. The US dollar is weaker after Fed rate decision and FOMC statement as QE continues as planned. The EUR is pushing to the upside after diving to minor intraday support zone around $1.3650, GBP is recovering as well – but attention goes to commodities which are rallying at time of writing: Gold currently at 1343 from 1325 3 hours ago, Silver at 27.50 from 26.65 intraday bottom earlier today. Oil is climbing higher, too – not far below the $100 handle after recent consolidation into the 95-98.50 range.
My morning report tomorrow will be delayed a bit so I apologize in advance.

Here are some up-to-date charts:


EURUSD hourly chart 1-26-2011
EURUSD hourly chart 1-26-2011


GBPUSD daily chart 1-26-2011
GBPUSD daily chart 1-26-2011


Gold 4hrs chart 1-26-2011
Gold 4hrs chart 1-26-2011


Silver 4hrs chart 1-26-2011
Silver 4hrs chart 1-26-2011


Oil daily chart 1-26-2011
Oil daily chart 1-26-2011

And here are some recommended articles:

January FOMC Minutes: Unanimous Vote, No Opposition To Fed’s Relentless Hewlett Packard Policy (Full Redline Comparison)

Nic Lenoir Takes Goldman Head On, Says Time To Sell EURUSD Is Here

Greece Default With Ireland to Break Euro by 2016 in Global Investor Poll

Missing the Big Picture Part II

Assessing Blame

Financial Crisis Was Avoidable, Inquiry Finds

Half of Wall Street Was Satisfied With 2010 Bonuses

Goldman Sachs scholarship challenged at Senate

Richard Russell: The Dollar Has Lost All Stability And Is Ready For A Crash

… and some great music to listen to, as usual, because I know you enjoy great music as much as I do

Good night!

© liviu for, a Forex Analysis blog, 2011. |
Article Source | Post tags: Dollar, EURUSD, GBPUSD, Gold, Goldman Sachs, Interest Rate Decision, Keynesian economics, money printing, Oil, quantitative easing, Silver

January 25, 2011

Quick Monday Links

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

Hello everyone, here are some interesting reads I’ve stumbled across today

Economy News Nightmare: 20 Things That You Should Not Read If You Do Not Want To Become Very Angry

A Review And Look At Global Events In The Upcoming Week

15 Facts About McDonald’s That Will Blow Your Mind

The 13 Most Efficient Countries In The World

A Lesson In Range Bars

Have the Media Made the Greek Crisis Worse? [YES]

Great Depression, Debt and Economic Decline: Ireland, Portugal, Greece, US, UK

Determining Optimal Risk

Have a great evening!

© liviu for, a Forex Analysis blog, 2011. |
Article Source | Post tags: Dollar, Euro-zone crisis, EURUSD, Irish bailout, Keynesian economics, Oil, range bars, recommended articles

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