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Riskaversion

USDJPY Rising Wedge in Uptrend Possible Reversal?I guess yen will have some probabilities technically as the price was pumped a lot in this major pair and now falling backward after price breaking lower from the rising wedge. Technically if the rising wedge forms after an uptrend, it’s usually a bearish reversal signal. If we can see a falling DXY indicating some weakness in king and rising wedge in an uptrend which breaks lower this major pair may fall backward I assume. Momentum are showing bearish domination in stochastic as well.
Short
by jessi061
2
Nikkei 225 Possibilities of Bullish ContinuationThe bull is weighing against the bear at the moment on TVC:NI225 knowing how the global equity markets turning from red to green because recently market participants having higher risk appetites. Also, at this point, we know that YEN losing its strength against may other currencies and it's been a couple of days now so I think that should help the export-oriented economy country like japan as well. We are having a cheaper currency which will obviously help the businesses to export more in ease. Businesses will rise back and eventually it will grow the demand for such domestic equities leading the index higher.
TVC:NI225Long
by jessi061
Yellow Metal Losing the Shine?It was fishy already the moment when I realized how people being greedy over equities TVC:SPX | TVC:DJI . Knowing much of major steps already taken in action from global governments and central banks all those honchos working together to save their own country equally from this pandemic created financial crisis let me think at least once that something is coming better for the future even if it's not soon but later for sure! I have already realized some good changes around which I don't like to mention here but take it optimistic for now and know that the shine of this yellow metal may no longer be brighter then past if the whole world are about to contain this virus inside a box!
FOREXCOM:XAUUSDShort
by jessi061
5
EURUSD Probabilities Of RetracementIt can be a retracement finally after a long swing upward couple of days past due to the US under pressure from Covid-19. This might be changing positively slowly as the representative of the state is focusing on the comeback against the pandemic and they have already run much stimulus program for their economy prevention. Can't say it may be fully reversal but there could be some side effect on the currency after they have taken some control over the outbreak which may temporarily change the market sentiment.
Short
by jessi061
5
AUDJPY Market Overview & Possible Trade PlansChecking out AUD/JPY today as the pair recovers from an early Tuesday drop, likely on rising global risk aversion sentiment as coronavirus fears blaze up once again. Words are in town that by Apple, who issued revenue guidance warning www.theverge.com overnight, evoking fears of a more significant impact from the coronavirus outbreak on the global economy. This lead to a break of the rising trendline lower lows on the hourly chart, as seen above, but the bulls stepped in to halt the decline around the pivot weekly s1. The pair is now testing the past broken strong support area around 73.50, which could draw in sellers looking for another opportunity to play the risk-off sentiment at a better price. Be on the look out for bearish reversal patterns before considering a short play, and if the upcoming Australian data disappoints, then this pair could make a run for fresh break of today’s swing lows. For the bulls, a turn in Coronavirus sentiment could halt the decline, as well as a big positive surprise from Australia’s upcoming leading and wages data. A break above 73.50 in the scenario could draw further fresh buyers who could shoot for the 74.00 handle, which is well with reach knowing the ATR of around 60 pips for this cross pair.
by jessi061
1
DXY: Market OverviewThe leading indicator has already pointed out exhausted bullish. Technically talking we all can see dxy has extended a lot high due to some past week greenback power over most of its counterparts. Last week it was an almost risk-off market situation where safe haven did most well and the case dollar been dragging most of its counterpart creating some bullish momentum on dxy. The situation doesn't seem well for dxy bulls at this point when we saw a bearish engulfing candlestick pattern which indicating bearish momentum gradually increasing at the market. To consider properly we know how pound, euro, Aussie (mainly) and kiwi trying to lead over greenback at the moment and overall market risk sentiment changed when NY trader entered the market. I assume if the market player avoids risk aversion and gets nasty over chasing risky assets then counterparts of greenback may perform well especially those comdolls and which will eventually help dxy bears to drag the price further lower. Technically we can see stoch did hang around a couple of times in its overbought zone but finally it leaves the 80 zone!
TVC:DXY
by jessi061
USDJPY Possible Trade Opportunities. RetrenchmentOrContinuation? A strong U.S equities market and risk-friendly trading environment have helped push and breakout USD/JPY above a descending trend line on the 1-hour time frame. The pair were consolidated for a while London entered but then somehow the global positive risk sentiment news concern to coronavirus saying "China finding an effective drug to treat people with new coronavirus" pump the pair little higher but I guess there was some more hidden reason for price acting that manner earlier. Before the U.S. ADP report only a few hours away USD/JPY’s may have some possible retracement opportunity if today’s U.S. ADP report prints lower than market already weak expectations. We could see USD/JPY give up some of its gains and revisit 109.063 and this case should be considered to buy the rumors sell the news case. As we can see, the fib 38.2% level lines up with the previous resistance level 109.063 which is a good take profit level for bearish bias traders if the ADP forecast ends up being the actual or even worst. If today’s ADP release prints better than expected, then we could see USD/JPY trade higher without a significant retracement and bullish momentum may not fade away which will lead to some more new fresh buyers in this major pair!
by jessi061
AUDCHF Short BiasAussie pairs got a good boost from the RBA decision in the Asian session as the central bank sounded optimistic about global and domestic growth prospects. However, this bullish reaction might be short-lived as market players remain mostly risk-averse while coronavirus contagion fears are present. AUD/CHF is trading below 200 SMA visible on its 1-hour time frame which aligns with the descending trendline acting as a major resistance, stoch point out oversold. Price rejecting from the 200 SMA and descending trendline and falling below the weekly pivot point should point of bearish sentiment weight over this cross pair and the if the coronavirus fear doesn't end at the point swiss franc being lower-yielding might keep taking advantage of risk-off flows!
by jessi061
1
AUDUSD Long Bias Trade Plan and IdeaTraders are in big-time risk aversion mode as more bad news on the Coronavirus outbreak continues to hit the wires. Most notable that seems to have traders running to safe havens. Safe havens like the Greenback have already benefited in the session, while risk currencies like the Aussie (and the major currency most likely affected by this outbreak given Australia’s strong economic ties with China). AUD/USD which has already made more than a full daily ATR move lower since the week open (0.6814) before bottoming out around 0.6765. This week, the US Federal Reserve is scheduled to have its first meeting this year and expected to decide on its monetary policy. The key interest rate will apparently remain intact, but that’s not 100%. One for the more prudent traders who like to go after higher risk-to-reward returns on this major pair will not hesitate to risk and we all know "No pain... No gain! meaning no risk no profit!"
Long
by jessi061
ORBEX: Risk Aversion & Poor Data Move USDCHF & USDCADIn today’s #marketinsights video recording, I talk about trade war uncertainty and Trump's impeachment and how has safe-haven Franc reacted to the latest headlines! I also talk about Canada's poor GDP figures, a bit more certain given the numerical value, and analyse USDCAD's rise. With Fed flows still weighing on markets, #NFP hours ahead and #ISM closing the session it's going to be a very interesting weekly conclusion. Stavros Tousios Head of Investment Research Orbex This analysis is provided as general market commentary and does not constitute investment advice
by Orbex
$USDCAD Safe Place?Following a nasty Jan 2-9 downtrend the $USDCAD has shown a rally since hitting that very strong support (blue line). This rally has lifted it to +2.16% for the month. Often regarded as a safe haven currency I can see major players jumping in on this really low price and soft rally. with a 200 day moving day average of 130866 as a solid stop loss this might be a great place to earn for a few days. We will keep close watch on the EMPLOYMENT data coming up on THURSDAY. HAPPY TRADING
Long
by Buffetbaby
WHY DID STOCK MARKETS PLUNGE? RISK AVERSION BITES BACKYesterday, stock markets all around the world went into a downward spiral, notably during the American session. A variety of commentators tried to explain what happened, giving various reasons as a justification. Some say that the fundamentals were to blame, given that people were worried about corporate profits, especially in the tech sector. This appears to be a rather misleading explanation: corporate profits recorded a huge improvement, with most companies across many sectors registering better than expected results. Among them, Microsoft reported double the increase analysts expected, while Tesla Motors suggested that it was a “historic” profitable quarter. The same is expected to hold regarding the 2 tech giants which are expected to post profits today. While the idea is that investors somehow appear to be worried about future profit flows this does not seem to be justifiable either, given that forecasts, both on the corporate and especially the macroeconomic front, also appear to be positive. Overall, all of the above do not support the view that the 3.4% decline was due to fundamentals. Technical analysis should also be ruled out as it cannot really be blamed for such large movements in the markets. The reason is that technical analysis usually operates within bands and is also usually following the trend, which usually is in accordance with fundamental developments, not acting ahead of it. The only possibility for technical analysis to have been the culprit is if insiders know that the 3 tech giants which will announce earnings today, are to face worse than expected outcomes and have traded heavily on such information, with technical analysis assisting them along the way as prices went below certain pivot points. However, this is quite unlikely (and also very illegal!). What we are left with then is market sentiment. As the FX-Risk Aversion Index Chart shows, uncertainty reached a 3-month high, as the Kashoggi issue, which undermines the US-Saudi relations, the proposed Fed interest hikes, as well as Brexit and the rejection of the Italian budget yesterday, continue to dominate discussions. Naturally, all of these issues pre-existed the crash and have not intensified that severely yesterday. This is where the US 10-year bond, which has increased above 3% over the last month, comes in. Let’s underline that psychology is important in the markets and what matters is that they expected a stock market bust. In fact, they have been expecting it for a while now. Put yourself in the position of a fund manager: you’re recording profits because the market has been going up since the start of the year. All of a sudden, markets start to react badly in the beginning of October, with macroeconomic risks increasing. Can you trust that they will continue to do so and they will not eat up your profits? Not really. So what you can do is sell, in order to lock in your profits, and switch to something safer, such as US Treasury bonds, which would guarantee a stable income until the end of the year. If risk aversion continues to be high, you may actually end up also getting a handsome profit from the increase in the bond price as well. The fact that market participants are expecting a drop and then selling ahead of this, makes it a self-fulfilling prophecy, a theme which often arises in the markets. Note that I’m not saying that this is exactly what happened. However, it could be the case that something similar took place as stop loss orders reached their limit and the market received more than it could handle. Besides, this is also the most likely explanation regarding the 1987 Black Monday incident. Why yesterday then? The most honest answer one can offer is that we do not know. Perhaps it was the fact that Ford profits were 37% lower than expected, on account of China woes, and helped trigger this reaction in the market. It could, by any means, also happen on any other day, as long as participants were expecting it to happen and they were thus ready to push through with the switch to the bond market. Overall, the drop had nothing to do with tech fundamentals, and its timing had really nothing to do with any event on that particular day. It was just a reminder that the trade war with China will also harm the US (as we have predicted in our Quarterly Outlook), with ongoing tensions all over the world adding to this. On their own, they would not have caused such a sharp decline. However, add them up with market expectations of a decline in the stock market and an increased attractiveness of the 10-year bond and you have a perfect storm forming. As for the straw which broke the camel’s back? We will likely never know. Nektarios Michail, PhD Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
SP:SPX
by HotForex
SHORT on Triangle break-out GBPJPY As the real brexit is imminent. And market conditions are prompting for risk aversion to be kicked in. We entered short on GBPJPY @140.57, position is inching toward first target. An opening gap on monday signals an upcoming shake. 1- Brexit in next few days 2- FED rate hike bets on more than 50%. 3- North Korea missile adventure ignite the situation further 4- Trump again orders traveling ban, but led by SC this time. 5- French Election 6- 3 central banks (FED, Boj, BOE) to issue policies next week after RBA. all above events may trigger the risk-aversion. Yen will gain against basket of currencies in such conditions. Pairing an anti-risk currency with weaker OR vulnerable to risk is best to trade. Thanks for excellent Technicals to give us a green light. Trade with Care.....
by ashfaq.hussain.duggal
BREXIT & GEO-POLITICAL AFTERMATH: SHORT GBPUSD - HOW TO TRADEGBPUSD - At the end of last week GU traded to lows of 1.32 on the brexit vote, before retracing substantially to 1.39 by the end of the day. - GU retraced 600-700pips after the brexit event IMO solely as investors took profit from their shorts (which causes buying) - thus there was no structural reason for GU recovering e.g. it was that 1.32 had mispriced GU too low for the brexit vote. On the back of this I expect the following for GU this week: 1. I have a 8/10 short conviction on GU and ultimately believe it will trade <1.30 by weeks end for the following reasons: - - As on friday, the bearish movements we saw on GBP were 90% fast money trades and NOT real/ slow money positioning (due to different regulations and trading strategies) therefore, this week, slow/ real money will now be able to get behind the short sterling move thus providing momentum for GBP to move lower and sub 1.30. *Fast money is hedge funds and slow money is asset managers* - David Cameron UK PM also resigned following the result, thus putting further downside expectations on GBP in the near-medium term particularly as it as all come at once. - Also the BOE plans to increase its QE by 66% 350bn to 600bn to support markets but this printing increasing GBP money supply affect puts downward pressure on the GBPUSD. - Further, members of the European parliament have asked and put pressure on the UK to make their exit faster than previously expected, this puts further uncertainty around the brexit and increases the negative impact it may have on the economy and therefore the GBP speculation is made further bearish. - As pictured I had expected the 1.356-1.382 range that had held at the end of last week to hold for the next 24hrs and for GU to trade relatively flat (24hrs for people to make decisions on positioning) however it looks like corporations and other entities have derisked their GBP exposure over the weekend hence we opened 300pips lower at 1.342. - With this range broken we now trade in no mans land, thus with all the negative biases my target from now is for GU to drift towards the lows set from last week for now - If the market changes significantly within the next few hours (e.g. trades back into range) i will update this view. - My target for GBP is <1.30 with a terminal value of 1.25 within the quarter - though i consider that the supportive (no hike) policy of the FOMC will ease GBPUSD losses somewhat. This in mind shorts at these levels are fair 1.34. Alternatively, I also encourage my favourite tactic of shorting/ fading any GBP rallies to 1.38/39 however the chance of GU realising such upside imo is only 50%, with bid trading dominating Volatility update: Current GU ATM 50 delta vols trade at 25%, which is surprisingly 2x higher than it was last week (the risk and volatility may not be over). 1wk GU ATM 50 delta vols trade at 30%, significantly higher than last week also. However 1ms trade 20.49% and are significantly lower than they were last week (illustrating the event risk that has elapsed). Current GU Option demand is skewed significantly to the downside, with Puts 27.5% vs calls 22.5% thus puts are in demand by about 20% more than calls - this supports current short views (RR -5). 1wk GU demand is also skewed in favour of downside coverage, with puts at 33% vs calls 28%, (RR -5%) with puts being demanded apprx 3% more than calls - supporting the near terms view of short GU USDJPY as a measure of market risk. I still suggest using UJ as a measure of GBPUSD market risk - the volatility seemingly isnt over, and with near term uncertainty high, it is prudent to track UJ and use breaks of its 101.2-103.2 range as signals of net risk on or risk-off commitment .e.g. UJ higher risk on (jpy selling), UJ lower risk off (jp buying). The risk off move for GU imo is lower in this environment, and the risk-on move is higher. Thus, IMO UJ and GU are sync'd, and the two should be used as a tool.
Short
by QuantumLogicTrading
3
GBPJPY Breakdown ActivatedThe Rising Channel of the GBP/JPY has been broken and has closed below the Channel. I took a short on the first close below the Channel. My stop is 1 ATR is above Breakdown Bar around 187.05's. I listed a few Target's for you guys. Choose them as you wish. I only Trade 2 Targets per my Trading Rules. In order to get this pair we need to see Risk Aversion. All JPY Pairs are tied to Risk Trends. We saw all the JPY's drop (light Risk Aversion, probably not long lasting) overnight and I believe it was a response to Turkey shooting down a Russian Fighter Jet.
Short
by PateSkpate
2
Risk Aversion Combined with a Dollar Pullback This is my favorite trade from a fundamental perspective at the moment and is the best way to position oneself following the FOMC interest rate decision. Due to my bearish sentiment on US equities, the flight to safehavens like the yen is a theme I am very confident will play out. Interest rate maintenance for the US dollar now clears the way for the yen to strengthen in the inevitable flight to safety. I was a bit conflicted before with the specter of a rate hike which would strengthen the US dollar vs the yen. Now that is confirmed to be a non-factor, we will likely see at least a retrace to the recent low we hit not long ago. Moreover, the SP500 was quite bearish despite the bullish scenario of 0 interest rates and possible QE4 in the future. This could indicate a serious change in market attitude toward this ongoing central bank regime of zero to negative interest rates. Of course, how equities perform tomorrow will be important to confirm this, but as of now I already have some aggressive positions in the USDJPY and may add more shorts depending on upcoming price action.
Short
by KaizenTrader
1
Upcoming Short Opportunity on U/J I've written down the notes for the trade on the chart, all self explanatory. I'm only looking for short opportunities on this pair as it has broken 200 EMA support. Yes the fundamentals of BoJ QE are still in play, but the current trend is currently in control of the bears. And remember the Yen is tied to commodities, and the market appetite for risk. And always remember that in the markets, fear is much greater then greed. Inter-market analysis all points to a Risk-Off environment which sub-sequentially strengthens the Yen as it is a "safe haven" currency. Current short will be taken based off of price confirming a rejection of the angled grey resistance box. With reasonable stops above the 200 EMA take profits will be at 116.00 - A break above current resistance (200 EMA) will switch this over to strictly long opportunities with TP set at 120.70, and possible short opportunities with tight yet reasonable stops above 120.800 for shorts at major resistance with TP at 119.00 and 116.00. -Let price come to you, no need to catch a falling knife. Remain unbiased when trading, trade what price is telling you, many times price will ignore longer term fundamentals. Cheers, happy trading traders =D
Short
by Daniel.B