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Gold: Long-Term OverviewThe mood in the market has changed drastically if we were to compare now with the beginning of 2019. The gold has shifted into a period of consolidation as the US-China trade war took a breather. When the trade-deal failed to pull through, it eventually led to escalating global trade risk and the US economic growth is undoubtedly affected. The Fed hasn't been as hawkish as it were in 2018 and instead, it has turned to a dovish stance, signalling for the cutting of interest rate to sustain its economic growth which is dampened by a prolonged trade war against China. During the period where the Fed kept raising rate in 2018, the gold saw itself losing value by a whopping 200 dollar. Yet, the recovery started halfway through the rate hike the very moment the market has a dampening view of any further rate hike in 2019. And just recently, the gold long position has increased drastically as the Fed has signalled the possibility of a rate cut while the dollar is also at a 2-year high, a 618 level in the weekly chart. The dollar has peaked, the interest rate has peaked, the tension of the US-China trade war is at an all-time high, what would be the outcome of the gold price in the next few months? If this is the direction of the current market outlook, the gold will undoubtedly rally through the last half of 2019 and into 2020. In the meantime, we have also seen that the gold has peaked at the top of a 6-year range starting but also a sign of break above of a 3-year symmetrical triangle caused by the 5th and ongoing Elliott wave. As seen on the chart, should the market continue to move on the track of a falling dollar, the gold price will reach 1400 in the next 2 months, 1481 by the 4th quarter and 1550 in the 1st quarter of 2020. Note: The market is extremely volatile to market changes and any long-term view should be watched over and monitored closely for any major economic events that could lead to major changes in the market outlook and market trend.
FX:XAUUSDLong
by AlgoVenture
SHORT AUDUSD: RBA INTEREST RATE DECISION - CUT 25BPS TO 1.50%RBA Cut the Cash rate to 1.50% by 25bps, the market has had a very subdued reaction though, barely falling 30pips from market. I still think there should be more downside here and into the mid/low 74xx before the full fade comes in - so luckily room for retails to get in, looks like the algos were having a day off today. This is positive for any kiwi$ short holders - this now puts almost certain pressure on RBNZ to do the same (if not 50bps) next week. Previously Aussie$ fell 180pips back in May 3rd on a 25bps cut like this, and the next day lost 40pips so a total of 210pips in 2days, 0.766 to 0.745 - assuming this model holds true this time we should then expect AUD$ to trade to 0.737 in 2-days given we started at 0.758. Thus the 0.744/5 target I have should be modest but inline with the subdued market reaction (TPs further to the LHS run the risk of being faded out unreached). We could/ should see some more selling through LDN/ NY as real money gets on board - unlikely to stay in the 0.75's for today (or close here imo). RBA Interest Rate Decision Highlights: -AUSTRALIA AUG RBA CASH RATE* DECREASE TO 1.50 % (FCAST 1.50 %) VS PREV 1.75 % -RBA SAYS RISING A$ COULD COMPLICATE ECONOMIC TRANSITION -RBA SAYS JUDGED ECONOMIC GROWTH WOULD BE IMPROVED BY EASING -RBA SAYS GLOBAL ECONOMY GROWING AT A PACE BELOW AVERAGE -RBA SAYS RECENT AUSTRALIAN DATA SUGGESTS OVERALL GROWTH CONTINUING AT A MODERATE PACE -RBA SAYS UNDERLYING PACE OF GROWTH IN CHINA ECONOMY APPEARS TO BE MODERATING -RBA SAYS RECENT DATA CONFIRMS INFLATION REMAINS QUITE LOW, EXPECTED TO REMAIN CASE FOR SOME TIME -RBA SAYS LESS RISK OF LOW RATES OVERHEATING HOUSING MARKET -RBA SAYS LABOUR MARKET DATA CONTINUE TO BE SOMEWHAT MIXED
Short
by QuantumLogicTrading
12
SHORT NZDUSD: RBNZ DOVISH ECONOMIC ASSESSMENT HIGHLIGHTSThe RBNZ was dovish in their economic assesment and IMO used it to communicate their 100% commitment to a OCR cut. Key drivers of this view were quotes such as "futher policy easing will be required, and monetary policy will remain accomodative.", "NZD currency strength makes it difficult to hit target inflation" and "NZD exachange rate is too high stronger NZD implies inflation outlook will be weak" So clearly there is no illusion as to the RBNZ's August 10th decision. Perhaps the only question, given the extensiveness of the dovish rhetoic/ comments is how much will the RBNZ cut? could it be 50bps rather than than the usual 25bps given how aggressively dovish they have came out on the record. Trading Strategy: 1. From current levels there is little interest in adding fresh shorts - shorts still standing from 0.72/3 are firm and should be held. A 25bps cut IMO will take NZDUSD to 0.68TP and a 50bps cut, with the shock pricing it even lower, likely to 0.65/4. 2. Risks to this downside view continue to be RBNZ driven. As we have seen in the past 2wks Kiwi has traded at the mercy of the RBNZ - 2wks ago when the OCR rate cut initially began to price us to 0.70, the RBNZ came on record talking about kiwi house prices limiting the ability to cut the OCR which caused NZD$ to rally back to 12m highs, where then a week later, the RBNZ announced their emergency "economic assesment" which completely flipped the script back on the dovish side - now this week the assesment has been released and is dovish with the rate hike being price now. - But in the 3wks between now and the rate decision, im sure there is a level for more RBNZ comments to conflict this dovish sentiment. RBNZ Economic Assessment Highlights: -RBNZ: Further Policy Easing Likely -RBNZ: Will Continue to Watch Emerging Flow of Data -RBNZ: House Price Inflation Excessive -RBNZ: Bank Lending Curbs Aim To Limit Financial Sector Instability -RBNZ: Many Uncertainties Around Outlook -RBNZ: High New Zealand Dollar Adding To Headiwinds For Dairy, Manufacturing -RBNZ: High NZ Dollar Makes It Harder To Achieve Inflation Target
Short
by QuantumLogicTrading
2
SELL AUDUSD - JUNE RBA MINUTES HIGHLIGHTS - DOVISH/ CUT POSSIBLEOn the margin RBA remained in line with previous meetings, adding little but still keeping it on the dovish side imo. Once again, as in previous minutes (and from several other central banks) RBA continued to communicate the necessity of "watching key data" to drive future policy decisions. Interestingly though, they also mentioned the negative impact of a strong AUD which in turn supports RBA doves out there as a cut is the remedy to stop a deflationairy currency in its tracks. Further, RBA notably were under no illusions regarding their inflation situation stating " inflation set to stay low for some time" - another encouraging stimulus for doves given inflation's important position/ weight for setting future policy. As per the attached post, i remain dovish/ bearsh on aussie$, and i continue to expect a cut to 1.50% (25bps) this year given i expect their inflation to remain stagnant. Clear targets are 0.73 when probability of a cut is higher - though i would enter shorts regardless if AUD$ could find its way to its 12m highs at 0.78, though unlikely. I like USD strength in the medium term too hence supporting the short Aussie dollar view RBA Minutes Highlights: RBA MINUTES: BOARD TO WATCH KEY DATA, WILL MAKE ADJUSTMENT TO RATES IF NEEDED; REVIEW OF FORECASTS IN AUG WILL HELP STEER POLICY - Inflation set to stay low for some time, employment mixed, retail sales look set to pick up - Stronger AUD would complicate economic rebalancing - Economic transition is now well advanced
Short
by QuantumLogicTrading
3
SELL NZDUSD: EYES ON CPI PRINT 23:45GMT - >0.5%=0.73; <0.4%=0.67Short NZDUSD based on low CPI/ inflation = an RBNZ OCR cut is 90% likely - 105 mins after market open at 23:45GMT NZD releases their June CPI print. - In all RBNZ mandates they reiterate how they consider CPI to be their "main/ sole" target or dictator of the monetary policy they set (check any of their minutes etc). - Their target is 2%, plus recently they announced that they would hold an "emergency"/ brought forward economic assessment (this lead to increased short bets on NZD$ at the back of last week (with NZD$ falling from 0.733 to 0.710) as many speculated that this meant the RBNZ has a heads up on the CPI print - e.g. its bad). - See here for more details on NZD CPI and likelihood of a RBNZ OCR cut: www.bloomberg.com - In simple terms if CPI fails to grow on the quarter for NZD e.g. 0.4% or has in fact fallen e.g. 0.3% or less - it is highly likely that the RBNZ will cut their OCR rate, in order to boost the CPI, which in turn will send NZD$ likely to a terminal rate of 0.67 (could be as much as 0.65), hence why last week we saw shorts increase on the pair as fast money tries to front run the market/ print. Trading Strategy - Short NZD$ if CPI print misses or equals 0.4% - Stagnant/ low Inflation = RBNZ OCR cut likely: 1. Personally I dont have any interest in playing the long kiwi$ side e.g. if the print is higher as; 1) the RBNZ isnt happy with NZD trading so well (due to its deflationairy pressures), so action could come to reduce the NZD. 2) There is approximately 300-400pips of downside from here (at least) if a RBNZ OCR cut comes, whereas a no cut will likely see NZD$ Drift to 0.73 (maybe higher) so the risk:reward complex isn't as attractive to the upside IMO. 2. I will be waiting for the CPI print at 23:45GMT - if it is lower or equal to 0.4% I will Short NZDUSD 2lot@Market price; 0.68TP1 0.67TP2 0.65TP3 . 3. This trade is effectively betting on an RBNZ OCR rate cut; See attached posts for more details but this is already highly likely - and IMO is a definite if CPI is 0.4% (even more so if it is lower). Ideally id love to see 0.3%. - The rate cut is ranked likely if CPI comes in at 0.4% or less because 1) Inflation is the RBNZ key target, so stagnation is what they have to avoid - a rate cut is the likely tool they'll use given they have one of the highest CB rates in the developed world; 2) the NZD dollar is very expensive across the board and the RBNZ have communicated their dismay regarding the strength of the currency (e.g. saying its very strong/ causing disinflationairy pressures) - so a OCR cut is also the likely response if the RBNZ wants to depreciate the NZD dollar against all of its trading partners; 3) An OCR cut will ease any of the Brexit Commonwealth Headwinds that may or may not drift into NZD's economy of negative impact - so as these 3 reasons are compounded I believe an OCR cut is made ever more highly (80-90%) likely thus bearish bets against NZDUSD make sense to me from here. 3. This CPI trade, if comes in on target (0.4% or less), is also good as LDN and NY session's will have 8-14 hours until they start - so you will be able to get ahead of the market/ mostof the largest FX flows. Though the Asia session will be in full swing so dont expect an easy ride - IMO fingers should be on the trigger to execute the short immediately if 0.4% or less is seen - NZDUSD will likely drop 200+pips in less than 30seconds if these figures are the case (if not even quicker). Any questions or comments please ask - reading the "sell nzdusd @0.73 - tp 700pips" post ive attached helps support this short Kiwi$ trade
Short
by QuantumLogicTrading
19
SHORT GBPUSD @1.34 - BOE MINUTES HIGHLIGHTS - EXPECT AUGUST CUTAs expected BOE stood pat on their rate decision reiterating much of which was said last week by Gov M. Carney, the need for more analysis to be done is/ was key - " "Detailed Analysis" of All Policy Options Required" and "Extent Of Additional Stimulus Will Depend on August Forecasts". IMO the notes were very bearish and almost but 100% chance of some sort of action in August - "Most MPC Members Expect To Loosen Policy In August". Given Brexit, and the Inflation conditions in the UK anyway a cut of the Bank Rate, if only for 12ms, makes sense to ensure a smooth transition - especially as the UK welcomes a new PM & the article 50/ Brexit negotiations are yet to get underway, this will undoubtably put some pressure on the UK economy, where much of which could be smoothed by a 25bps rate cut. The minutes did point out interestingly that ""In the Short Run" Weaker GBP Will Boost Inflation" which makes sense, however they coupled this statement with "BOE Agents Report Some Businesses Delaying Investment", so the net impact of the Brexit event on inflation is yet to be seen. Overall IMO the decision to hold Policy still in July was as expected however, given the median analyst had forecasted a 25bps cut, this "hawkish" response imo has opened up a beter oppourtunity to sell GBP, as in the medium-term/ post the Aug decsion GBP$ is likely to trade below the 1.28 lows, with many analysts forecasting GBP$ somewhere between 1.20-1.25. Trading Strategy: 1. Short 1@1.34/335, sell 2@1.38/9 TP1 1.305; TP2 1.285 TP3 1.25XX. - I personally will not be operating SL on this trade as i believe BOE will cut in August 90%, and/or GBP$ will fall at somepoint on pure speculation, and/or as FOMC rate expectations continue to increase going into the later stages of the year. 2. Shorting any GBP rallies vs USD is also a good strategy from now on into the Aug rate cut, especially above 1.34. *In the unlikely event GBP$ trades higher on the back of this e.g. to 1.38/9 then i still advise shorting, however, given how stable cable was trading into the event (and after the event) i dont expect much short headwinds now - you could tell the market didnt actually believe in the rate cut/ money wasnt behind the rate cut as GBP$ rose to its post brexit highs at 1.33... is that how a cross should react when money is actually backing a cut? BOE Rate Cut/ Minutes Highlights: Bank of England Leaves Bank Rate Unchanged At 0.5% Bank Of England Leaves Bank Rate Unchanged At 0.5% BOE Jul Minutes: MPC Voted 8-1 to Maintain Bank Rate at 0.5% BOE Jul Minutes: 8 Voted to Keep Rate Unchanged BOE Jul Minutes: 1 Members Voted to Increase Rate BOE Vlieghe Voted to Lower Bank Rate to 0.25% BOE: Most MPC Members Expect To Loosen Policy In August BOE: MPC Members Had "Initial Exchange" on "Various Possible Packages" BOE: Extent Of Additional Stimulus Will Depend on August Forecasts BOE: "Detailed Analysis" of All Policy Options Required BOE: "In the Short Run" Weaker GBP Will Boost Inflation BOE: Longer-Term Outlook Depends on Inflation Expectations BOE: Economic Activity Likely to Weaken in Wake of Brexit Vote BOE Agents Report Some Businesses Delaying Investment, Hiring Decisions
Short
by QuantumLogicTrading
3
SELL NZDUSD @0.73 - TP 700PIPS: BREXIT, RBNZ, FED & USDJPY HEDGEShort NZDUSD is in my top 2 FX Trades for several reasons: 1. NZD is considered the riskiest G10 currency cross, so NZD trades weaker in risk-off markets, or when equities/ SPX trade lower (you can see the high correlation with SPX at the bottom of the graph). - With Brexit occurring last week, global risk has increased, this is especially the case for NZD due to commonwealth connections. Therefore NZD is likely to come under pressure in the future as risk-off sentiment continues to dominate, as the US Election nears, Global growth worries continue (Japan, Europe, China) and Brexit/ uncertainty about further EuroArea exits continues to intensify - we can see Gold and US Treasuries continue to gain supporting the risk-off view and thus supporting selling NZD. Also, risk-off encourages $ buying as a safe haven deposit on the Brexit backdrop. - Further, going into earnings season next week, historically risk currencies (NZD) perform poorly as investors seek safer assets to hedge against earning surprises, thus this helps NZD selling and USD buying. Plus, most investors will want to hold some $ cash in order to fulfil their earnings based equity trading, so this also helps the short Kiwi$ trade by increasing $ demand relative to NZD. 2. The RBNZ Meeting on the 10th August is likely to be dovish and I 80% expect a rate cut of 25-50bps from 2.25% to 2.00%-1.75% , as;1) Brexit risks are weighed in on and potentially priced into a rate decision, in follow up to the supportive/ dovish statements from RBNZ members immediately after the Brexit decision and 2) NZD Macro Environment has performed poorly since the March Rate cut from 2.5% to 2.25% e.g. The last prints still consistently dragging: Retail Sales at 1.0% vs 1.1%qoq & 0.8% vs 1% Q1qoq; CPI 0.4% yoy, 0.2% qoq; Unemployment Rate at 5.7% vs 5.5%. 3) the RBNZ has a historical pattern of cutting their rate every third meeting, and this August meeting is the third meeting. Plus it will have been 5 months since their last cut in March - this also historically is a large time for a another rate cut as previously to that the RBNZ cut in December, Dec-Mar which was only 3 months, and before that in october (oct-dec) which was 2 months so the odds are good if NZD data continues to be bad given the time since the last cut of 5 months is relatively large. And the gap since their last meeting at June 10th is 2 months which is the biggest gap they have. - Risks to the RBNZ Rate cut view are that;1) Brexit risks are de-priced due to UK Political skulduggery pushing the likelihood of the brexit into 2017 (if at all) 2) Their Inflation, Employment and GDP data manage to recover and show structural signs that the rate at 2.25% is sufficient for continued economic recovery e.g. NZD May Employment Change print surprised to the upside at 1.2% vs 0.8%, and their June GDP outperformed for Q1 at 0.7% vs 0.5% qoq & 2.8% vs 2.6% yoy. So if the CPI and employment data due to be released before the RBNZ August 10th meeting shows a continued/ structural/ aggressive recovery this will reduce the likelihood of a rate cut. Nonetheless, my money is that this isn't the case (with data continuing to trade subdued) and I therefore expect them to provide reassurance to markets with a strong dovish tone, and a 25bps cut - citing Brexit and non-outstanding economic indicators as the impetus for the changed policy. *It should be noted, in order for me NOT to consider a 25bps cut likely in August we would have to see an outstanding CPI and employment print e.g. CPI 1.0%-0.8% (0.4% last), and unemployment 5.3/4% (5.7% last), given it has been 5 months since the last cut - the RBNZ would be expecting to see such figures to consider the current rate of 2.25% as working/ sufficient.
Short
by QuantumLogicTrading
13
FTSE100 - POSSIBLE INVERSE HEAD AND SHOULDER PATTERN WEEKLYToday, Bank of England governor Mark Carney said a rate cut is needed after the Brexit vote and hinted that it could come as soon as this summer! This news got the FTSE and the DAX flying up to nearly 300 points. Also, the Feds stated this week that they may cut rates this summer as well, possibly even this month (July) so that is really great news for global indices. However, with the political uncertainty in Europe and UK, it wont be a sure bet! I believe the UK and European stocks will suffer later this year due to Brexit after shocks. I still expect more downside for FTSE100 and pound in particular but after today's news I think the markets will rally up first, ftse back near its all time high around 7100. On the Weekly chart, I have identified a possible inverse head and shoulder pattern that has already broken the neckline today. We have the 200 MA support around 6460 and also our neckline support around 6400. In this case, our entry would be around 6460-6500 with stop loss below 6370 with a potential target of 7100.
FX:UK100
by Sagefx
1
Will the Australian central bank cut rates?Bolstered by a rally in commodities, improved manufacturing data and employment levels in Australia, the economy is doing very well. In fact, it has been the best performing economy among developed nations outside Europe. However, the appreciating AUD is undermining this strong economic performance, dragging the country down and hampering growth. It is in the Australian central bank's best interest to cut interest rates to allow the AUD to depreciate and the economy to grow with the strength it should be. As well as this, the inflation levels in Australia are still below the 2-3% target at 1.7%, giving room for a rate cut. I think that further appreciation of the AUD will cause central bankers to realise its unsustainability - for want of a better word - in undermining economic growth, and will go forward with a rate cut. Thus, if the AUD reaches the region indicated by a box on my diagram, I will consider shorting AUD, with a target price somewhere in the low 70 cents region.
Short
by olly_price
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