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Week results - between Brexit the NFPThe main event of the previous week was not a meeting of the Bank of England or even a decision of the Fed (both the Central Banks left monetary policy parameters unchanged). This is not data on US GDP (annual growth rates have been the weakest since 2016: 2.3% in 2019 compared to 2.9% in 2018), but the coronavirus epidemic in China. Yes, so far the epidemic has been localized in China. But this is not easier. The magnitude of the coronavirus epidemic has already exceeded the 2003 SARS. And the World Health Organization declared the outbreak of coronavirus a global emergency. So last week, the markets were busy on the one hand counting the victims of the epidemic (more than 300 deaths and more than 15,000 cases), and on the other hand, counting the economic damage. China extended the New Year weekend for another week. That is, another week 2/3 of the Chinese economy will be closed. The magnitude of the losses is not yet clear, as the epidemic continues, but it is already clear that we are talking about tens of billions of dollars. The chances of China's GDP growth rate dropping below 6% now seem almost 100%. So the fears and concerns of the global recession have intensified. The Chinese stock market today is trading in a deep minus (about -8%) despite all the efforts of the Government and the Central Bank. Despite such a regrettable situation, trading is an opportunity that can and should be taken advantage of. For the long-term, it is worth selling in super bought stock markets, but in the medium-term and locally, the purchase of safe-haven assets (gold and the Japanese yen) and the sale of risky assets such as the Russian ruble look great. Actually, we voiced this plan last week, but as the epidemic grows, the relevance of our positions only grows. Another significant event of the past week was Brexit. On January 31, Great Britain officially left the EU. We already wrote that buying pounds remains one of the best trading opportunities at FOREX in terms of potential in 2020. Whether it is implemented or not will show the progress of trade negotiations between the UK and the EU. But if successful, a pound above 1.40 could very well become a reality. The upcoming week will be saturated with various kinds of macroeconomic statistics. But the main attention will still be focused on Friday statistics on the US labor market and NFP figures. Our thoughts and forecasts on this subject will be described closer to Friday. In the meantime, we continue to monitor the development of the epidemic and investor sentiment.
FOREXCOM:XAUUSDLong
by Trade24Fx
2
It's a long time i am not posting analysis.. but i am back.BUYEUI don't remember last time i posted one of my analysis. It's passed so much time... but i think it's time to get back and share my ideas. So, here you are a fresh signal before the NFP. EURUSD has made a consecutively 4 bear bars on weekly charts. History is clear, usually when EU is too much oversold... pullback is coming hard. Next, we are on important pullback zone. 1.100 is an important price, and looking on H1 tf i can clearly see a MACD divergence, that can anticipate a rally up. I suggest you to wait eu to come back to 1.10100 again before buying, or enter now with small size and buy again later. The target are marked with red lines, also the possible retracement. What do you think guys? Hope you appreciate :) I'm back :) Simo
Long
by SaliJournal
1
Ambiguous NFP and a busy week aheadLast week ended for the dollar is not the best way. Statistics on the US labor market came out slightly worse than expected: +145K new jobs outside agriculture instead of the expected +160K. On the one hand, it’s okay, but on the other hand, after +200K of employment from ADP, it seems to be not enough. On the whole, our predictions for NFPs based on statistical laws can be justified: two excesses by the fact of the forecast must be followed by lag from expectations. Perhaps the most annoying thing for us happened in the USD/CAD pair. Recall, we recommended news trading. And the news came out almost ideal for reducing the pair: relatively weak data on the USA against the background of strong data on Canada (employment +35K with a forecast of +25K). But the decline in USD/CAD was very limited and earnings of 15-20 points cannot be considered as such. Total, the week is clearly an asset to the dollar, but so far we see the growth of the dollar exclusively as an opportunity for its sales to be more expensive. And the numbers on the NFP have more likely confirmed our position than disproved. So this week we will continue to look for opportunities for dollar sales. The main candidates for this are the pair with the Japanese yen and the British pound. The first is interesting to us as an asset-refuge and just the entry points themselves are magnificent. As for the British pound, Brexit is confidently moving in the right direction, but the pound has lingered. Accordingly, we expect that already this week he will rush to catch up. In our opinion, another interesting asset for trading this week is gold. The inability of sellers to sell 1550 is the best confirmation of the appropriateness of buying gold. In any case, the deal is worthwhile: with relatively small stops (placed below 1440), goals can be set very ambitiously. Recall, we believe that gold should test 1800 this year. The new week promises to be quite saturated with macroeconomic statistics, especially in the USA and Great Britain. Which, again, will almost certainly be accompanied by the appearance of points for entering positions.
Short
by Trade24Fx
4
Understanding NFP. Was it bullish or bearish for Gold?So, we got December NFP on Friday and here are takeaways: New Jobs – 145K vs. 165K expected. BIG MISS! Wage growth – 0.1% vs. 0.3 expected. BIG MISS! Unemployment: 3.5%, unchanged from November. I managed to close my Gold position in small profit despite betting on the opposite NFP guess (ready my previous post). Subsequent price action indicated that the bullish spike had to be short-lived. There was also a hint from data about that but what was the key inference? With unemployment at record low of 3.5%, lower-than-expected new jobs count could be affected by WORKERS SHORTAGE, which is a sign of OVERHEATING rather than cooling. Counterintuitive, eh? Yeah we have to read the fine print and in the run up to 4 or 5 previous NFP reports I read many anecdotal stories that firms are struggling to hire. If you want even less evident point about that here it is: At this low unemployment rate, the candidates being hired were likely to be out of labor for a longer time => more time and costs involved for their training what acts as a constraint for hiring and wage growth. While stagnant wage growth just strengthens the case ( that we already know ) that Fed won't make policy shifts at least until the end of 2020. No change in expectations - little reaction from the assets side. That’s why separate reports like December one with no confirmation from the unemploymen t figure may be discounted by the markets. Today, Gold is down by 0.40% as the focus shifts to signing ceremony of the US-Sino trade deal. Expect further cooling and price searching for support test on generally calm and positive market sentiments. Price targets: 1540 and 1535 per troy ounce.
FX:XAUUSDShort
by PipVision
1
USDJPY-Weekly Market Analysis-Jan20,Wk2A pretty bullish run towards Point D completion does create some restrain in shorting this pair. When a likelihood of another war breaks out in the middle-east region, often not USD is viewed as the safe-haven currency. Many has changed over the years, people start to take JPY, CHF, Gold and even Bitcoin as the safe haven. Well, is always better to be safe than sorry, I'm waiting for a retest on the resistance before engage for a shorting opportunity. If a retest didn't occur then I'll engage this trade for a short-term short on the new sell-zone.
Short
by RaynLim
EURUSD NFP & My Crazy Eye 1HR - #HOKCAPITALFor the Japanese Yen Household spending rose by 2.6%, month-on-month, following on from an 11.5% slide in October. Economists had forecast a 9.8% decline. Year-on-year, spending fell by 2%, however, which was worse than a forecasted 2.5% rise. In October, spending had fallen by 5.1%. According to the Statistic Bureau, There were heavy falls in spending on education (-17.1%), furniture & household utensils (-13.1%), clothing & footwear (-6.8%), and housing (-4.1%). Spending on fuel, light & water charges (-1.5%) and on transportation & communication (-0.1%) also declined. There were increases in spending on medical care (6.0%), culture & recreation (3.4%), and food (0.2%), however. The fall in spending, year-on-year, came in spite of disposable income rising by 2.7%, supported by a 1.9% rise in income. The Japanese Yen moved from ¥109.52 to ¥109.517 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.04% to ¥109.56 against the greenback.
by jdroyalty
ridethepig | EUR Market Commentary 2020.09.01I demonstrated the flows earlier in the move before it played out, there was a winning move in December and the main line comes after: It comes down to the pursuit of seller stops; they have been forced to flee, but the flight itself has been riddled with challenges as more and varied geopolitical risk is conjured up. As I pointed out in the first week of the new swing, the lows led to the pursuit: EUR starting to look interesting again and I started to buy 1.1100/25 as the safe-haven bid into USD starting to fade. With a pinch of luck it will be the low of the week into NFP. Not assigning much room for further downside here, for the sake of practice, let us take another look at the position in the European macro diagram: The technical flows which follow make clear the connection between the base and the breakout. Good luck to those trading EURUSD in 2020 and already in longs or for those waiting patiently on the sidelines for the breakout to form. Buying here makes sense to me heading into NFP with 1.128x targets. As usual thanks so much for keeping your support coming with likes and jumping into the comments!
Long
by ridethepig
1
Pre-NFP Analysis (Geo Polisci)NFP meets expectations: Dollar’s (DXY) had a nice rebound, clearing the short-term range-high up to it’s current descending trend; channel-top. Also, confluences in 97.5 is a huge key level and also support for the Euro at similar prices respectively. There are a lot of USD based pairs at support and I think today will result in a continued trend to the upside. The ADP figure earlier this week (govt figures) was stronger, and thus leading expectations of a 100 DXY. NFP can lift the dollar here, but by how much is unknown. I don’t think so. Alternatively : If NFP misses, Dollar is at resistance (growth and monetary policy) I think the path of least resistance with negative numbers is a DXY tanking towards lower support levels. Risk: The FED signaled it will continue to fund short term lending towards April, which is a problem, meaning that the lending market is seized up. The FED needs to by dynamic and stay ready to address negative rates (a growing question) if a new financial problem arises this year. Looking at U.S. equities, it’s worth repeating that the SPX out performs on short term basis and has done so for over 10 years. U.S. equities are also the benchmark for other developed economies. The backdrop of risk-on sentiment vs risk-off right now isn’t normal. The risk-on isn’t sought now for the yield. Make sure you know that. As investors in an economy are more willing to take risk, with less return to be had, what does this sort of market do? It chances momentum. Capital gains (buy high, sell higher) is what is sought, not the rates of return (the book value). This leads to a very anxious and unsteady sentiment across equity, FX, and commodity markets. An underlying tale that I’m watching is emerging markets not reflecting the new all-time highs seen by U.S. equities. I think the decline in fear and the high level of exposure the markets have NOT in cash, is a troubling sign that market sentiment is hanging over the edge of an ever-falling cliffs edge. I think the take away is this: it’s easier to knock a market off pace if it’s based significantly on passed conviction. The risk-on right now isn’t robust--it’s simply opportunism at its finest. If the NFP numbers today suggest some sort of a decline in growth, we can see a lower DXY. How comfortable are you from accepting the fact that this market is building with record exposure with no concern that it will fall against fundamental winds? It’s complicated without question. Risk trends and the pricing of risk through something like the VIX, you can see suppression even taking into account what’s happened in Iran over the last 7 days. The volatility of emerging markets is low as well, with high speculative exposure across the board. This is the perfection of pricing in no worries; however, I think we can all agree to a few things. Iran vs U.S. is a hot topic. Crude is going to suffer from any fundamental events, regardless of the fact that Iran doesn’t produce a lot of oil, they do have a history of manipulating supply chains. The U.S. hasn’t “reacted” to the air base being mortared—combining the economic sanctions (the reversal of Iran backing out of the nuclear treaty) and new protests, the markets assume that it’s all behind us. This is pretty crazy to me and I think it’s important to watch oil for short, medium, and long-term opportunities regarding this theme.
TVC:DXY
by TayFx
6
NFP - waiting for the devastating data and sell the dollarToday will be published a block of statistics on the US labor market. Traditionally, statistics on the US labor market arouse increased interest among traders and often lead to volatility emissions in financial markets, since these data are some kind of leading indicators of the state of the economy as a whole, and are also used by the Fed as a guideline when the Central Bank takes decisions on monetary policy parameters. After three days of a steady growth of the dollar in the foreign exchange market, traders and investors should just scratch their hands in order to fix profits on long positions. It’s just an occasion. And it seems to us that they will get a reason. But first things first. The main focus will be on two indicators: NFP figures, as well as the average hourly wage. For the first time, everything is clear with the NFP: forecast or better than forecast readings are an excuse for buying a dollar. But this is at first glance. The fact is that the data on ADP, published on Wednesday, greatly exceeded the market expectations: they will now have little 160K or even 180K. A figure less than 200K will be perceived as a failure since dollar growth on Wednesday and Thursday is largely an attempt by markets to discount under excellent Friday data based on figures from ADP. That is, the data from ADP to play against the dollar, when it is very likely to fall even against the background of better than predicted data. Well, if the data comes out worse than forecasts, then imagine the price of the dollar before Wednesday evening and you can estimate the minimum extent of its decline. As for the average hourly wage, many economic experts see wage growth as one of the main threats to the US economy and name it among the key factors that could cause a recession in the US economy. Salary growth leads to higher costs for corporations. This in turn negatively affects their profits. The deterioration in profit growth, and especially its decline, may lead to a massive exodus of investors from the US stock market, which in turn will trigger a chain reaction of the economic crisis. Note that investors start 2020 in an extremely nervous state. The likelihood of a recession is quite high, and no one denies the fact of a slowdown in the world economy. Any confirmation of these fears will provoke a sharp round of concern, that is, the reaction to the data will be double: not only the data will be processed, but also the expectations that are the consequence of these data. What are our expectations? We have long been supporters of the impending crisis, so in this regard, our position is quite predictable. But today we have one more argument from the field of statistics. In the past 2 months, NFPs have come out on average 50% better than expected. So over the previous 3 years, the NFPs have never come out better than forecasts more than twice in a row. That is, purely statistically one should expect the release of data worse than forecasts. Again, according to statistics, the data can come out much worse than forecasts. The last time, after two consecutive positive deviations from the forecast for the third time, the NFPs came out 59%. Worse than experts expected. The penultimate time, when a similar situation happened, after two positive deviations, the NFPs was 89%. Worse than expected. That is, we are not at all surprised if the data comes out, say, 50% worse than expected. And this is a figure below 100K. 100K is a psychological barrier, below which panic begins. That is why today we will sell the dollar. Ideal candidates for this are the pair with the Japanese yen and the British pound, as well as gold.
Short
by Trade24Fx
About optimism, faith, and facts, as well as trading on the newsOptimism and belief in a bright future are generally quite positive things, but you should not abuse them, because this is fraught with a separation from reality. What we observed in the last couple of days in the financial markets, in our opinion, was that separation from reality. Asset prices are as if there were no killing of Suleimani, mutual threats from the United States and Iran, Iran’s missile attacks on US military bases. All at once forgot about the billionth injection of the Fed in the Fed market, the trade wars and the slowdown of the global economy. By the way, the World Bank just a few days ago lowered its forecast for world economic growth in 2020 from 2.7% to 2.5%. But this is part of reality, from which there is no escape. Failure to think about these things does not mean that they cease to exist. That’s why we will continue to sail today against this stream of optimism and will buy gold and the Japanese yen, as well as sell the dollar. In general, the dollar today can be a very defining day. The release of statistics on the US labor market is always an occasion for a sharp increase in volatility. Given the importance of the data, our position on the NFP and the reaction of the dollar will be presented in a separate review. In general, the best option for trading today, in our opinion, is trading on the news. That is, do not try to guess what data will be released and how the dollar will react to it, but act on the fact. And there is just a great candidate for the deal - we are talking about a pair of USD/CAD. The fact is that today not only statistics on the US labor market but also on the Canadian labor market will be released. That is, a couple can undergo either a double positive (as it was a month ago) or a double negative. In any of these cases, the movement will be quite strong and unidirectional. So we offer the next trading plan for today. 1-2 minutes before the release of data in the USD/CAD pair, we place orders like BUY STOP and SELL STOP at 20 points from the current price at that time. And then we just wait for the news. If the option “bad data for the USA/good for Canada” is triggered, pick up SELL STOP. If the game has the option “good US data/bad Canada data”, BUY STOP will work. In both of these cases, it is recommended to hold the position until the end of the day. If the data come out less clear and the situation is unclear - remove orders.
by Trade24Fx
ORBEX:CHF Firm Despite Haven Flows,Pound "Stimulated" by CarneyBOE's Gov Carney hinted to stimulus yesterday, indicating that the pound could come under severe pressure if incoming data show no improvement. Coincidently, the same day there were suggestions that the EU-UK talks could be dragged past the tight deadline BoJo has set. The passenger plane crash in Tehran didn’t reflect into the markets as uncertainty about the crash remains high without access to the plane's "black box". As a result, #safehaven outflows continued to weaken the #yen. However, #franc seems undeterred by the sentiment, making a strong case for more firmness. Timestamps USDCHF 4H 01:25 GBPUSD 2H 03:35 Trade safe Stavros Tousios Head of Investment Research Orbex This analysis is provided as general market commentary and does not constitute investment advice
by Orbex
ridethepig | GBP Market Commentary 2020.01.09A good time to update the Cable chart as we approach the first macro driven event risk of the year with NFP. As mentioned a few times the range we are trading is crystal clear with 1.33xx highs and 1.31xx lows. While the market is holding the key support at the lows, I maintain a view that a correction back towards the highs is both corrective and necessary to allow positioning for Brexit impact leg while the risk to the thesis comes from a break below the lows in the range and reassessment is only required should we break below. I therefore look to sell the strength back towards 1.33 - 1.35 which will be enough to cap the highs for 2020. Should we see any strength extend in the short-term it will be a superb selling opportunity for those interested in adding weight to the in-house macro view. For those wanting to track the large swing we have been trading since the UK elections I would recommend the following diagrams: GBPUSD GBPAUD EURGBP UK markets pricing a Conservative majority as a "positive resolution" to Brexit is complacent and allows us an opportunity to capture those out of position and mis-pricing UK market access beyond 2020. To date we have traded a tremendous amount of conjecture around the Brexit chapter, yet many are quickly to forget we are yet to trade the "fact" leg. ...Best of luck to all those looking to trade NFP, a clean and simple spike back to the top of the short-term range in play for Cable. As usual thanks for keeping your support coming with likes and comments !!!
Long
by ridethepig
3