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Macro

EUR/USD Outlook (20 January 2022)Overall, EUR/USD is ranging across. The eurozone CPI y/y data will be released later at 1800 (GMT+8). Final CPI y/y (Forecast: 5.0%, Previous: 5.0%) Final Core CPI y/y (Forecast: 2.6%, Previous: 2.6%) The European Central Bank will be releasing the minutes for the most recent monetary policy meeting later at 2030 (GMT+8). EUR/USD’s next support zone is at 1.12000 and the next resistance zone is at 1.13800. Look for short-term selling opportunities of EUR/USD.
Short
by JinDao_Tai
AUD/USD Outlook (20 January 2022)Overall, AUD/USD is ranging across. Recently, AUD/USD broke above the key level of 0.72. The Australian employment data will be released later at 0830 (GMT+8). Employment Change (Forecast: 60.0K, Previous: 366.1K) Unemployment Rate (Forecast: 4.5%, Previous: 4.6%) AUD/USD’s next support zone is at 0.71000 and the next resistance zone is at 0.73000. Look for short-term selling opportunities of AUD/USD if the employment data is poor, leading to AUD/USD breaking below the key level of 0.72.
Short
by JinDao_Tai
USD/CAD Outlook (20 January 2022)Overall, USD/CAD is trending downwards. Recently, USD/CAD bounced off the support zone of 1.24500 and broke above the key level of 1.25. The Canadian CPI y/y data (Actual: -0.1%, Forecast: -0.1%, Previous: 0.2%) released yesterday indicated that inflation declined slightly as expected in December. Currently, USD/CAD is testing to break below the key level of 1.25. Its next support zone is at 1.24500 and its next resistance zone is at 1.26100. Look for short-term buying opportunities of USD/CAD.
by JinDao_Tai
USD/JPY Outlook (20 January 2022)Overall, USD/JPY is ranging across. Recently, USD/JPY traded into the support zone of 114.200. The Japanese National Core CPI y/y data (Forecast: 0.6%, Previous: 0.5%) will be released tomorrow at 0730 (GMT+8). The Bank of Japan will be releasing the minutes for the previous monetary policy meeting tomorrow at 0750 (GMT+8). Currently, USD/JPY is testing the support zone of 114.200 and the next resistance zone is at 116.000. Look for short-term buying opportunities of USD/JPY if it bounces off the support zone of 114.200.
Long
by JinDao_Tai
USD Overview (20 January 2022)Yesterday, USD weakened against most major currencies except CAD. The U.S. housing data released yesterday indicated an increase in the number of building approvals issued and the number of new residential homes that began construction in December. Building Permits (Actual: 1.87M, Forecast: 1.71M, Previous: 1.71M) Housing Starts (Actual: 1.70M, Forecast: 1.65M, Previous: 1.68M) The Philly Fed Manufacturing Index data (Forecast: 18.9, Previous 15.4) will be released later at 2130 (GMT+8).
TVC:DXY
by JinDao_Tai
Macro Overview: Part 4: Dollar Index:I begin each year reviewing the long term technical positions of the "Big Four." 10 Year rates, SPX, Commodities, and the US Dollar. This is the fourth of the series. The fifth and final will attempt to tie the first four together into a organized macro view. Granted, macro doesn’t typically impact shorter term (swing, daily and weekly) trading, but developing a broad framework for understanding market context and to help recognize change in the investment environment is important. It seems that for most of my 40 year career there have been two core calls among many strategists. 1) Interest rates must go up and 2) The Dollar must go down. Neither trade/opinion has worked out. 1) Despite 40 years of policy and global payments angst, the Dollar Index remains range bound. a. The wide macro range, 70.70 - 121.02 has contained price action over most of my trading career. i. The market is roughly in the center of this range. b. The more immediate range, 85.25 - 103.82 has defined trading since late 2014. 2) The 88.25 - 103.82 range is by far the most important chart feature. a. Prices are squarely in the center of this range. b. Moves inside the bounds of the range are noise, and while they may represent trading opportunities they mean little in macro terms. c. Be very careful when commentators suggest that the Dollar is trending. I hear this all the time and at least in terms of macro, these adjustments mean little. 3) A monthly close outside the range would strongly suggest a major change in the fundamental backdrop. 4) I believe that volatility is more cyclical than price. Periods of low vol. set up conditions that often lead to explosive moves. a. Note that volatility has continually made lower highs as vol. has been gradually crushed out of the market over the last 30 years. b. A breakout of this pattern combined with a range break would suggest a disruption in the long term equilibrium and move DX from trendless to trending. 5) Dollar correlations to other assets (rates, equities and so forth) are mixed. Its been several years since I did the correlation work, but I really don't recall teasing out consistent long term tradable factors other than a weak correlation to commodities/gold. But, as a caveat, it has been years since I spent significant time and I was looking over longer periods. Impetus for a range break could be provided by the Federal Reserve increasing rates significantly faster/slower than current expectations or faster/slower than other central banks. Externally, a flight to safety resulting from disruption in emerging markets, armed conflict in Europe, or significant new domestic fiscal stimulus are all possibilities. When thinking about the Dollar its worth remembering that currency is a relative game. It's not only the domestic economy and monetary/fiscal policy, but those factors relative to the same factors inside our largest trading partners. Dollar Bottom Line: It’s a range trade until it ain't no more. Good Trading: Stewart Taylor, CMT Chartered Market Technician Shared content and posted charts are intended to be used for informational and educational purposes only. The CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. The CMT Association does not accept liability for any financial loss or damage our audience may incur.
TVC:DXYEducation
by CMT_Association
24
GBP/JPY Outlook (19 January 2022)Overall, GBP/JPY is trending upwards. The UK employment data released yesterday indicated lower number of people claiming for unemployment benefits while unemployment inched lower in December. Average Earnings Index 3m/y (Actual: 4.2%, Forecast: 4.2%, Previous: 4.9%) Claimant Count Change (Actual: -43.3K, Forecast: -38.6K, Previous: -49.8K) Unemployment Rate (Actual: 4.1%, Forecast: 4.2%, Previous: 4.2%) The UK CPI y/y data (Forecast: 5.2%, Previous: 5.1%) will be released later at 1500 (GMT+8). Bank of England Governor Bailey will be testifying before the Treasury Select Committee on the Financial Stability Report later at 2215 (GMT+8). During this time, there may be volatility in GBP. Currently, GBP/JPY is testing the support zone of 156.000 and the next resistance zone is at 158.000. Look for short-term selling opportunities of GBP/JPY if it breaks the support zone of 156.000.
Short
by JinDao_Tai
1
GBP/USD Outlook (19 January 2022)Overall, GBP/USD is trending upwards. Recently, GBP/USD traded into the support zone of 1.36000. The UK employment data released yesterday indicated lower number of people claiming for unemployment benefits while unemployment inched lower in December. Average Earnings Index 3m/y (Actual: 4.2%, Forecast: 4.2%, Previous: 4.9%) Claimant Count Change (Actual: -43.3K, Forecast: -38.6K, Previous: -49.8K) Unemployment Rate (Actual: 4.1%, Forecast: 4.2%, Previous: 4.2%) The UK CPI y/y data (Forecast: 5.2%, Previous: 5.1%) will be released later at 1500 (GMT+8). Bank of England Governor Bailey will be testifying before the Treasury Select Committee on the Financial Stability Report later at 2215 (GMT+8). During this time, there may be volatility in GBP. Currently, GBP/USD is testing the support zone of 1.36000 and the next resistance zone is at 1.38000. Look for short-term selling opportunities of GBP/USD if it breaks the support zone of 1.36000.
Short
by JinDao_Tai
EUR/JPY Outlook (19 January 2022)Overall, EUR/JPY is trending upwards. Recently, EUR/JPY traded into the support zone of 130.000. The eurozone ZEW Economic Sentiment data (Actual: 49.4, Forecast: 29.2, Previous: 26.8) released yesterday indicated an increase in the level of optimism from the surveyed institutional investors and analysts on the eurozone economic outlook. Currently, EUR/JPY is testing the support zone of 130.000 and the next resistance zone is at 131.500. Look for short-term selling opportunities of EUR/JPY if it breaks the support zone of 130.000.
Short
by JinDao_Tai
AUD/USD Outlook (19 January 2022)Overall, AUD/USD is ranging across. Recently, AUD/USD broke below the key level of 0.72. The Australian Westpac Consumer Sentiment data (Actual: -2.0%, Forecast: NA, Previous: -1.0%) released earlier today indicated a further decline in the surveyed consumers’ sentiment on the Australian economic conditions. The Australian employment data will be released tomorrow at 0830 (GMT+8). Employment Change (Forecast: 60.0K, Previous: 366.1K) Unemployment Rate (Forecast: 4.5%, Previous: 4.6%) Currently, AUD/USD is trading up towards the key level of 0.72. Its next support zone is at 0.71000 and the next resistance zone is at 0.73000. Look for short-term selling opportunities of AUD/USD if bounces down from the key level of 0.72.
Short
by JinDao_Tai
USD/CAD Outlook (19 January 2022)Overall, USD/CAD is trending downwards. The Canadian Housing Starts data (Actual: 236K, Forecast: 279K, Previous: 304K revised from 301K) released yesterday indicated a slowdown in the number of new residential buildings that began construction last December. The Canadian CPI y/y data (Forecast: -0.1%, Previous: 0.2%) will be released later at 2130 (GMT+8). Currently, USD/CAD is testing to break below the key level of 1.25. Its next support zone is at 1.24500 and its next resistance zone is at 1.26100. Look for short-term buying opportunities of USD/CAD if it bounces up from the key level of 1.25.
Long
by JinDao_Tai
GBP/JPY Outlook (18 January 2022)Overall, GBP/JPY is trending upwards. The UK employment data will be released later at 1500 (GMT+8). Average Earnings Index 3m/y (Forecast: 4.2%, Previous: 4.9%) Claimant Count Change (Forecast: -38.6%, Previous: -49.8%) Unemployment Rate (Forecast: 4.2%, Previous: 4.2%) Currently, GBP/JPY is testing the support zone of 156.000 and the next resistance zone is at 158.000. Look for short-term buying opportunities of GBP/JPY if it bounces off the support zone of 156.000.
Long
by JinDao_Tai