In the absence of big ticket fundamental news we can always rely on a cross section of central bank governors and assorted members to drive some action into the markets. Here in the UK we have been particularly blessed by both Carney and Haldane, with Carney pushing GBP one way & Haldane pushing it the other. Or as we say delivering some good 'two way' action.
For GBP/JPY it's meant a dramatic 170 pip move higher before a correction at 141.75. which is also today's high. Pullback has seen pair back to test 141.42 but level to watch is 141.44 which is VPOC on our renko chart. We now have the London fix ahead which can often deliver its own verdict on a pair. ... See MoreSee Less
FOMC day so we can expect lots of volatility as traders will try to interpret comments from the press conference. But while this 'front of house' stuff is interesting and will give us trading opportunities aplenty, longer term it's what is happening in the bond market which is key.
The bond market is on fire and you are about to get burned!!! The Fed will raise interest rates in two days. The US Treasury Secretary Mnuchin just repeated he is looking into issuing ultra-long bonds (great timing).
A very Happy Monday as we start yet another important trading week with market focus very much on the FOMC on Wednesday, and a post on this and the USD will be uploaded later this morning.
Meantime despite it being a quiet day for fundamental news we've had some decent moves particular in the Yen which has seen some strong buying reflecting not only the overnight fall in the Nikkei, but also the move lower currently underway in the NQ.
For the GBP/JPY the move away from the VPOC at 140.44 on the 5 min chart picks up from last Friday's bearish tone for the pair with Friday's low of 139.52 the target for the current move lower and we only have the 139.95 VPOC on the daily chart likely to provide a temporary pause point. ... See MoreSee Less
Well, that was an interesting night! Exit poll came good, which I admit was a bit of a surprise, and GBP reacted accordingly. Hung parliament is the result, and it's now down to who can form a majority. I've had a quick look at the numbers & May plus DUP in NI can just about squeak it!
Big moves in GBP, but not as extreme as we have had in the past. Daily candle on cable triggered our volatility indicator because move was outside of its average true range. The 1.2635 low has seen buyers step in to support cable, and this afternoon's price action in NY will tell us if this rally in the pair is likely to continue or whether it will be hit by more selling. ... See MoreSee Less
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
I wrote this at the end of January for the VIX which is moving into worrying complacency levels, and reflecting the strong performance of the indices. We are not quite at single figures - but came perilously close yesterday at 10.74, so this afternoon's US session will be interesting. We also have to bear in mind that the index can stay low for an extended period of time, ie years, but as Wyckoff's second law of cause and effect tells us - the longer the complacency, the greater the reaction when it comes.
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
USD divergence in the majors with USD weakness not reflected in the USD/CAD which is currently being driven by dramatic fall in oil which has seen the commodity to a low of $43.76. However, we have seen a strong recovery back to the open at $45.51 as value buyers step in,
Daily CSI shows extent of CAD fall with AUD & NZD also looking weak on the back of poor Chinese data. ... See MoreSee Less