Yesterday's post on GBP/JPY highlighted the minor support platform at 141.50 which has been taken out in today's trading session as the pair continue to look very bearish with the potential to test 140.
Today's price action also validates the anomalies we had on Monday and Tuesday where high volume was associated with up candles with deep wicks to the upside, suggesting weakness to come. That weakness started yesterday. and continued today as equity markets hit with yet more White House rumour and speculation.
While traders were digesting the ECB minutes some political news from the US resulted in sharp move higher for JPY. The news (which is still unconfirmed at time of writing) is that Gary Cohn has resigned as President's Chief economic advisor on the Economic Council. This is market moving news because Cohn has been tipped as a possible replacement for Janet Yellen.
Until this rumour, and from a technical perspective, the JPY yen had been broadly moving sideways on the faster timeframes after some volatility on the release of the ECB minutes. Indeed a most of the currencies were bunching in the centre of the 30 min currency strength indicator, which is a classic sign of a market simply meandering along. Then the news hit the wires & volatility ensued.
And since the initial spike higher JPY index has retraced, but it's still volatile and likely to be so until we have some clarify on the Cohn story.
So as they used to say in Hill Street Blues @Let's be careful out there' ... See MoreSee Less
Simon Therrien MigneaultNikkei 225 finished down for the day ... and oil was going down from london Open ... insiders Cost price for Pound/yen 142.00 ... I went short before news at 141.93 after that 142.00 rejection. HIGH rise of bearish volume candle on 1 min candle I was short.. best cost price possible .. I was soo happy it went down instantly.. I had 20-23 pips and was loosing volume... before that retail sales Us news... volume drop before news is not good ... I closed + 9 instead of + 22 where I could have got out being more logic about what is Happening NOW .... so anyways I went short again pound/yen from 141.99 on the second doji where you see rise in volume of 5 min chart.. then I made +25.... but man I had the flow of money of the bigger picture direction I closed too soon ... im grateful for what went right but not satisfied with that poor decision 25 min later my 141.50 Take profit would have been hit ....it is my first day trading Using relational fundamental stuff and it's amazing 🙂 il get better everyday in everyway ... I refuse to be anything less than a Market Wizard 😀 have a good night
A creature of habit is gbp/jpy - yesterday's weakness on daily candle ignored in London session on back of better than expected UK labour data but with NY on the horizon pair deflating like a souflee. But what this price action does reveal is the two way price action that can happen in a currency pair, and how as traders we need to take advantage of both sides of the market. And finally how we need to treat each time zone as a new trading day.
Ahead we have Building Permits, Crude Oil Inventories, and of course, the FOMC.
In terms of levels today's low for the pair is 142.22 and above 200 ma with pair in consolidation in the 142.50 zone as we wait for NY. Upside is high of the session at 143.09 which is a tad below yesterday's.
Interestingly for USD/JPY daily price action is just touching VPOC at 110.91. ... See MoreSee Less
Forex TradingPerformance of USD/JPY is closely tied to equities, so when stock market turns expect to see this pair fall. If it's one of your pairs, just trade what you see and keep an eye on stocks. I will try and post some potential levels to watch. And if its any comfort no consensus amongst large banks on this one.
The Complete Forex Trading Program at Quantum Trading Education is now live. The Program covers everything new and aspiring traders need to know from a technical, fundamental and related market perspective. But it's not just market theory, the Program also includes our own trading tools and indicators along with teaching in the live markets, which is always the best way to learn.
On FOMC day it's worth reiterating the importance of knowing where the various members of the FED stand on monetary policy, particularly ahead of such an important release. And yesterday we had Kaplan and Fischer making various comments.
What is also important to note is whether the FED member in question has a vote, which was indeed the case with both Kaplan and Fischer.
Fischer is considered neutral so his comments about the possibility of loosening bank regulations are interesting, but not really market moving.
By contrast Kaplan's (soft hawk) comments in a podcast that FED should begin winding down balance sheet would be considered USD positive. However, his comments that FED should be 'patient' on timing of next rate hike and that there is still some slack in the US labour market are positively Yellen like in their dovish tone!
So what conclusions can we draw? Well his somewhat contradictory remarks reveal that while FED may talk the talk, they will not necessarily walk the walk on rate hikes. And if this is indeed the case then expect further USD weakness. NK notwithstanding.
And from a technical perspective, and as I've said previously the downside support level on the DXY is in the 91 region. ... See MoreSee Less
A typical forex trading day for David & I. Our Complete Forex Program is now live and within the program you will find a module dedicated to technical analysis and VPA which can be purchased independently (as can all the modules). The module also includes a comprehensive workbook of over 200 worked VPA examples across all markets and time frames.
Those of you who come along to our webinars will have heard David & I stress how important it is for index and stock traders to keep an eye on the currency markets. Not not just the USD, but also the Japanese Yen whose performance will often signal a change of both short and longer term sentiment.
The pair we always watch is the USD/JPY, but there is another pair that correlates well with stock markets and that is the Aussie Yen, as the Aussie is considered a risk currency by virtue of Australia's status as a major commodity exporter, particularly to China.
Furthermore, there is no a Yen index we can follow to make life a little easier. This has been developed jointly by the Dow Jones and FXCM, and we also have one available from our Quantumtrading stable of indicators.
The session thus far has seen the AUDJPY in free fall with the pair now approaching a low volume node on the daily chart which will add additional momentum should the pair breach the key 83 level. Indeed the 4th Camarilla support pivot also sits at 82.90 renforcing the importance of this level.
All now hinges on the US session and whether traders decide to reverse the currency bearish Globex tone. ... See MoreSee Less
A typical working day for David & I recorded as part of our Forex Trading Program. Do check out the modules which are applicable across all markets. And for those of you who used to come to our open access webinars you will be able to see Bertie & Harry!
Goes without saying markets are USD centric and with the DXY having moved sharply lower over the past 4 months commodities such as oil and gold should, under normal circumstances, haven been on a tear. But this has not been the case , and whilst there have been gains for both gold and oil, silver has only this month displayed any serious bullish momentum.
And there are several reasons for this which I've outlined in a post on the forex page. The technical picture for the USD does not in fact reflect the fundamentals for the currency where rising interest rates and a widening in comparable bond yields would normally result in a strong currency. Market commentators have therefore looked to the political landscape and in particular to Donald Trump and his failure, thus far, to push through any of his campaign agenda.
Political influence as well as the effect of Donald's twitter feed on the markets is something we now have to factor into our trading analysis, and is likely to continue for the foreseeable future. However, given we are only 7 months into the Trump presidency not sure how we are going to cope for the remaining years of Donald's tenure.
Moving to the charts & gold and here the key upside level is the $1300 per ounce price point which was tested back in April but did not follow even as the USD fell sharply. A further attempt in June resulted in the precious metal hitting a high of $1298, before falling back to $1204 in the first weeks of July but has since has provided the support platform for gold's current move higher. But $1300 remains the upside target and any successful breach would see gold attack the August 2016 high of $1374. ... See MoreSee Less
Clear from the daily currency strength indicator that we should expect a USD bounce this week, which has duly occured. This has not mitigated longer term bearish tone for the USD but move higher should be sufficient to garner a few pips across the majors.
What's also interesting on the daily CSI is oversold nature of the JPY, particularly against the CAD which has, of course, reflected the recent bounce higher in oil. ... See MoreSee Less
You can use the currency heatmap in lots of different ways. Not only does it give us a global overview of all our 28 currency pairs, but it's brilliant for tracking flows into an individual currency, and whether those flows are consistent across the pairs. NZD is a case in point with NZDUSD at the top and GBPNZD at the bottom, and once a pair is at such an extreme we know it is only a matter of time before we get a correction.
How we trade that correction will depend on the structure of the chart, and our preferred tactics. ... See MoreSee Less
Price action on Yen pairs using renko highlights the buying momentum for the currency. CSI shows extent to which Yen is overbought on faster time frames, and likely to offer a trading opportunity. However, on 4hr CSI the Yen is still climbing strongly suggesting move lower may simply be a pullback, and question is, as always, is it worth trying to trade any such correction? And the answer depends on the pair and whether the range is sufficient; your time horizon and your trading approach.
As David & I always say in our webinars, there are many different ways to make money from the markets, and no general consensus as to which is best or most profitable. But there are only two ways to lose money: The first is not managing or controlling your losses and second, too much leverage. ... See MoreSee Less