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GBPUSD: FED and Polls dependedThis pair has been a headache over the past few days. However, I think I have finally figured what this pair has been up to: - The market underestimated the possibility of a rate hike in June until the last FOMC Meeting Minutes on May 18th. This explains the lack of real sustainable rallies since the one that took place on the 3rd of May. - The FED has stated that a June hike is still on the table. However, skepticism around a real FED hike prior to the UK referendum has got the pair on hold. - The latest poll on the BREXIT conducted by IG/SURVATION has show a 44% pro REMAIN against a 38% for the BREXIT supported. The pair gained positive territory after this release which has become the catalyst for this pair during the London Session. So the question is, where is this pair going? The GBPUSD is on a bullish channel towards a re-test of the latest FED hike level. The market has decided to prepare for this scenario of FED hiking rates. However, the idea of hiking rates few days prior a major referendum in the UK, that have direct and significant consequences in the financial markets, seems to be highly unlikely. Markets are positioning for this event in order to retest the latest FED rate hike levels during the next Federal Funds Rate on June 15th. On a personal note: I believe the FED will be hiking rates on June the 15th if the data matches the committee expectations. A part from the fact that if they fail to do so with a positive data, markets will loose any remaining trust on the FED regarding a gradual interest rate hiking cycle.
by acertijofws
Exit Bulls, Enter Bears or vice versa? Your move RBNZ!This Wednesday we have RBNZ's Official Cash Rate and Rate Statement. Will this news event give the signal for a bearish move to sub 0.7 levels? I can see price do a number of things by Wednesday. Already anticipating bad NZD news and break lower to 0.6680 region slowly moving towards the lower trend line which then breaks upon the news Staying around current levels (0.6840 - 0.6875) and then break lower OR Less likely IMO, move up due to relief I'm biased towards lower levels even though RSI is almost and Stoch already oversold on 4H. However, they aren't on Daily and thus I could see H4 levels getting stretched. As indicated on the short I see various levels that could cushion the fall for weeks to come if we in fact move lower. Let us see.
Short
by UnknownUnicorn326052
1
My Idea on FOMC USD rate hike decision for EURUSDSo the time is coming, this is the last chance for the FED to demonstrate that the US economy is strong enough to withhold an interest rate hike and continue to show improvements. there are many political and idealogical factors behind this decision and this is a worry to investors and speculators that think this rate hike should not go ahead and that is only happening because of NON economical influences. lets see first, prior to the 16th meeting >>> the pair could well continue its bullish momentum, revisiting the high of 1090 and even penetrating all the way to the 1200 area where the down trend of this year has been established. also prior to the result and news release, some big brokers and desks will take positions to ensure they have enough liquidity to provide dollars to those who will buy it, so this will produce a few big EUR orders. Take a look at the CME options expiring at the NY cut, this will give you a good idea of what level is the market expecting. WITHIN THE MEETING/DECISION the key word here is VOLATILITY, while traders and brokers decide whether the statement is hawkish or dovish, you will probably see some spikes up and down as they hedge/cover and close their positions currently open. no one will open brand new positions during the event unless is to cover their large contracts to prevent losses here is when you need to be careful with your SL, if this is hit during the event then stay out until you can clearly asses the decision. bear in mind that experts analysts have great tools that electronically analyse the statement and is capable to identify different words and highlight this for the banks so their capacity of response is going to be pretty big nevertheless unlimited. AFTER THE DECISION here is when new positions will be opened, as liquidity returns and new players enter the market, big banks will look to find out how the decision affects their long term outcome and new positions could be undertaken over the next few days. looking at where the initial spike ends up you can get an idea if the outcome was scenario A B or C but still.. this may not probe to be the case and the pair may reverses within a few days of the initial euphoric move. SO IN SUMMARy - Prior to the event, keep an eye on positioning - during the event, volatility could kill your positions, ensure you are covered - after the event, reach the same conclusion than the big traders is essential, load yourself up with good news provider - if you are not sure, or you have no capital, or you feel insecure about trading in historic events, please do not trade this event. HAPPY TRADING HAPPY XMAS! any questions, please ask below :)
by SolidSnake
1
GBPUSD Short on account of Dovish Bank of EnglandTechnical Analysis: Technicals are on the chart, the Fibonacci Retracement, S/R Levels and Measures of Trend. The pair is trading below the 200 Day MA and the Long Term Pivot at 1.56600. Typically, short positions are sought with this in mind. If today's daily candle close is bearish, then the candlestick formation becomes an Evening Star at 52400 Resistance. Fundamentals and Market Conditions: GBP: Last week's dovish turn from the BoE makes sense in light of upcoming headwinds facing the UK. First, significant front-loaded fiscal consolidation is likely to weigh on growth. Second, the Brexit debate will heat up soon and potentially deter foreign portfolio and direct investment flows into the country. This is particularly problematic given the UK's large current account deficit. Finally, underlying sources of labour market health, such as hours worked and weekly earnings, are turning. The main risk to this trade is a resurgence in UK economic data. USD: Regardless of last week's downtick in economic data, King Dollar has held strong, resorting to a range rather than a severe correction in the majors. The Fed is currently more hawkish than the BoE and as we all know Central Banks and their Fiscal/Monetary Policy are King when it comes to driving currencies. Federal Funds Futures currently imply a 70% probability of a rate hike in December. See here .
Short
by JeffMzee
Gold testing strong harmonic zoneGold price broke below 1080 last week and created a new low. The latest sell off started from the bearish pattern I mentioned here few weeks ago and was accelerated when Gold broke below its weekly uptrend line. The critical support now is 1040-1060$. As you can see, Gold will complete two weekly bullish patterns inside this zone – Bullish Crab and Bullish AB=CD. With $DXY testing harmonic resistance zone, Gold can definitely benefit from Dollar weakens. Nearest target zone is 1080 (was support, now resistance) and later on, if Gold will overcome this resistance zone, 1120$, 1140$ and 1180 will be tested. Tomer, The MarketZone.net This analysis is part of the Weekly Markets Analysis newsletters To read more interesting technical reviews for the week - goo.gl To subscribe to the newsletters - goo.gl
FX:XAUUSD
by themarketzone
MACRO VIEW: IRX REFLECTS RATE HIKE EXPECTATIONSIRX, the 13-Week Treasury Bill yield has spiked above its relevant highs of 0.05 after the recent FOMC announcement, which hinted of a potential review of the Fed's Target Range for the Federal Funds Rate (now at 0-0.25%) This spike in prices indicates that at the moment the expectations for the rate range hike are present, as IRX is closely correlated to Federal Funds market (see Daily Effective Federal Funds rate at NY Fed website) Thus if IRX doesn't roll back below 0.05, until l the next Fed meeting, the rate range hike could be in the cards!
ILong
by Killy_Mel
Two potential buy zones towards rate decision$AUDUSD failed to rally from the buy zone I mentioned in my previous analysis and decline below 0.715 till it met the uptrend line created by previous lows. Two bullish scenarios I'm monitoring towards next week (notice RBA rate decision): 1. A close above the 50 SMA line - The price will remain above the uptrend line and will turn the 50 days MA to support 2. If the price will decline to re-test the previous lows, it may create an Aggressive C buy zone near 0.7 for a bearish 3 drives pattern (see potential R/R in the chart) Tomer, The MarketZone This analysis is part of the Weekly Markets Analysis newsletters- To read more interesting technical reviews - goo.gl To subscribe to the newsletters - goo.gl
Long
by themarketzone
Trading the FOMC eventIn 8 hours we will witness the perhaps most anticipated news event in Forex of 2015 so far. The FED will communicate their rate decision, accompanied by a written statement, economic projections and a press conference. The Dollar is fundamentally the strongest currency due to the expectation of a rate hike this year. This sets it apart from currencies like the Euro with its quantitative easing program and the Yen with its quantitative and qualitative easing program. Increasing the rate would cut inflation and encourage investors to come in, thereby increasing demand for the Greenback. And when demand goes up, the price goes up. Quantitative easing on the other hand is basically printing money to spur the economy and inflation. It weakens the currency by increasing the availability of it, which drives the price down. This difference is referred to as monetary policy divergence between these central banks (FED vs ECB / BoJ). The Federal Open Market Committee looks at the job reports and inflation for their rate decision and if they would hike, it would be the first time in nearly a decade. I will not bore you with my personal prediction and tea leave reading on this, since I will not trade into the event anyway or hold any bias going in. As a matter of fact, I will close all open dollar positions beforehand to protect my trading capital . But the market players seem to expect a rate hike with a probability of about 30% and this is why volatility, spikes and zigzag movements can occur (not to mention some brokers charging crazy spreads during this event). Not only the rate itself is important, the statement and press conference are also key because the language a central bank uses (be it hawkish or dovish) influences the market and thereby the value of its currency. In case of a hike, the Greenback will strengthen instantly which could last for weeks and months. Buying it against currencies with a diverging monetary policy would then be a good idea if you find a technically viable set up (never without!). In case there is no hike, the language will take center stage and will determine whether the Dollar will weaken or strengthen. If the language would be dovish, we will see a sell off of the Greenback and the Fibre will rally as a consequence (its not called the anti-dollar index for nothing). I will enjoy FOMC in Forex chat ( the place to be for these high impact news events, exchanging ideas in real time as it happens! ), assess whether the Dollar will strengthen or weaken fundamentally and then look for technically viable setups in that fundamental direction to make pips off this event, once the spikes and zigzag movements have died down. I wish everybody good luck, trade safely, enjoy the event and lets make some pips!
by JazzForex
27
USDCAD Short off Technical Top prior to expected rebound.On a larger time frame the USDCAD is a Long Trade. This is because of divergent monetary expectations with regard to the BoC and the Fed with the latter having recently cut rates for the CAD and a rate hike being priced in for the USD. This is a technical short off the 1.300 Handle that confluences with the 261.8 Fib extension of the Bearish corrective wave from 1.25160 to 1.22180, visible on the Daily Chart to the right. On the same D1 TF, Stochastic Oscillator (12,3,3) is indicative of overbought conditions as candlesticks are getting smaller by the day, a sign of slowed momentum. A rebound off the 38.2 Fib Retracement is expected as a minor corrective wave attempts to find support. A correction of more than 50% of the current Bull Wave is unlikely. Long positions will later be taken as soon as PA is favorable. Patience pays . Other important technical levels have been demarcated on the charts. Risks: No correction takes place, technical breakout occurs past 1.300. Influx of Buy Stops hit at that region will cause more Bulls to check in. Calling tops, especially against established momentum is a dangerous thing to do. You can never be really sure.
Short
by JeffMzee
2
DATA VIEW: CURRENT AND PERSPECTIVE FEDERAL FUNDS RATERecent expectations in the media regarding Federal Reserve rate hike look a bit overblown. What the Fed is actually planning to raise is the Target Range for the Effective Federal Funds Rate. The Effective rate, however, now trades firmly below the upper border of the range (0.25%), signalling no actual pressure to raise the Target Range. The nature of this phenomenon is examined in detail in a 2009 NY Fed paper "Mechanics of a Graceful Exit" (www.newyorkfed.org) One of the key conclusions from the paper is a proposition that there is just not enough demand for Federal Funds on the market to push the Effective Rate closer to the upper band of the Target Range. It is thus very likely that the "rate hike", if there is any, will have only "media hype" effect on financial markets, while the Effective Rate can even trade below the new Target Range for some time.
FRED:FEDFUNDS
by Killy_Mel
USDJPY Short - Poor US Data Abounds, Risk Aversion Vibes Update 1: SL was a little too tight. In reality SHort is still in play. SLs can't be moved on TradingView. Update 2: TP was hit at 121.423 Technical Factors: I like the Tweezer Tops on H4. The pair is currently trading below the 200,100 and 50 SMA. They are now dyniamic levels of Resistance. H1 has a number of rejection candlesticks off 122.900 (current pivot); This is around middleground of the the 50%-61.8% Fib retracement level of the previous bear move from 123.700 to 121.830 . Fundamental Factors: US Jobs Data was poor. ISM data was poor today as well. Tomorrow's trade balance is also expected to be lower, according to Bloomberg analysts' survey. This may dampen positivity on early rate hike expectations. Greece is potentially giving us a risk-off scenario that usually strengthens the JPY. Targets Price is below 122.900 Pivot and downside targets are preferred. Target is 121.400. Stop is tight at 35 or so Pips. Risks: The USD's Safe Haven status may make it an attractive prospect as Grexit fears loom and US Stocks devalue (7th July Monday Intraday) thus it may rise as USD demand increases. It is difficult to identify a true risk aversion scenario.
Short
by JeffMzee
2
DOWI: Toward a formation of a double top?The ichimoku chart shows that DOWI will go a little bit on the upside, but indicators show that there isn't a lot of room left on the upside. Tenkan Kijun twist may occur inside the cloud wich would announce a soft upside. Having an eye on the Kumo cloud and particularly on the next days show that there is a twist and confirme a reversal, at least a correction on the downside in the coming days. Therefore, if DOWI reaches 17080 or around on the upside, this may very much be a double top. This would then suggesgtthat the neck line is at 16333 and after a little upside correctio, the index may go down until 16000 or 15800. Having said that, bare in mind that 1-FED didn't decide yet to increase its interest rate. 2- There is still cheap money in the market. Therefore, the correction process is a fact, but we are not yet in a Bear market although this may happen sooner or later.
DJ:DJI
by Pashabxl
1