Exercise-Discipline

Exercise-Discipline Updated 

Fundamentally: increasing monetary policy divergence between the Fed and RBNZ. Technically: the Kiwi has broken its 2016 uptrend, and is retesting the underside of the 2016 trendline. Fair value is around 0.65 given the current economic outlook for NZ and USA.

Exercise-Discipline Updated 

USDCAD is at pre-election lows. USD has appreciated against most other major currencies - except CAD. This needs to be corrected. There is much uncertainty regarding trade agreements between Canada and USA post-Trump. There is an increasing yield differential between US and Canadian rates. USDCAD is an attractive buy at these levels.

Exercise-Discipline Updated 

Dollar strength is here to stay. Fiscal stimulus, rate hikes, $10 trillion off-shore dollar debt, rising US yields, DXY breaking out of a multi-year consolidation zone. The attached chart shows a strong INVERSE correlation between DXY and oil. As the dollar strengthens, the oil price soon follows. At present, there is a MASSIVE divergence between the oil...

Exercise-Discipline Updated 

RBNZ has not changed its dovish stance. Fed remains hawkish. NZDUSD showing divergence to 0.7322. Strong resistance on 4H chart. Many major banks forecast NZDUSD below 0.70 in medium term. This currency pair is a sell at spot.

Exercise-Discipline Updated 

Technically EURGBP is overvalued, trading outside 800 period BB on the daily chart. Long term bearish divergence is seen towards 0.90 and 0.92. Targets = 0.86 (missed monthly pivot) and 0.81 (missed monthly pivot) with profit being taken every 100 pips along the way to these targets. Fundamentally the Euro should remain under pressure since Draghi has not...

Exercise-Discipline Updated 

Strong divergence on 15M and 1H charts. Price outside 800 period BB. FOMC expected to signal potential rate hike in December. Risk = election, Trump win, political uncertainty ahead of election.

Exercise-Discipline Updated 

USDCAD is overstretched to the upside. On the 4H chart, it is outside 800 period Bollinger Bands. Furthermore, there is divergence towards the 1.34 level, suggesting momentum of the upward move is slowing. I expect a pullback on this pair, especially as oil appreciates back to the $50 level, to 1.32. Below 1.32, strong support should be expected at...

Exercise-Discipline Updated 

FX:GBPUSD Fundamental: the risks of Brexit continue, which should continue to weigh on Sterling. Technical: Cable was rejected at 1.3050, and shows divergence on short term charts towards the 1.30 level. Below the psychological 1.30 handle, cable is bearish and should head towards 1.25 if the current economic climate persists.

Exercise-Discipline

EURUSD is oversold and needs a correction to the upside. Divergence on 4H chart, outside 800-period BB. The weekend gap still hasn't been closed. Fair value around 1.09 (lower BB).

Exercise-Discipline

The dollar has gone up too fast, too quickly. Technically: 1) Outside 800-period BB on the 4H chart. 2) Divergence at the 100.2 level. 3) The 100-100.5 region is strong resistance on the daily chart - we were there in December 2015 after which there was a major correction to the downside. 4) Missed pivot point at 95.5 is the target. Fundamentally: The...

Exercise-Discipline Updated 

GBPUSD is trading above 1.33 today, despite the broad risk-off sentiment which has seen JPY up on the day. Fundamentally: Fed members are hawkish, and at least 1 rate hike is on the table this year. September is a close call - and if we believe the hawkish rhetoric of the FOMC recently - the market is underpricing a rate hike in September. This is bullish for...

Exercise-Discipline

The Dow reached as low as 17905 earlier in the day, but has since recovered somewhat to 18150. Technically: The Dow is due for a large correction to the downside. There is strong divergence on the monthly chart towards 18500. The target would be the missed monthly pivot at 16300. Fundamentally: US stocks are due for a correction to the downside, because the...

Exercise-Discipline Updated 

The FTSE 100 is trading near 6950, up more than 1200 points from the post-Brexit low of 5727. Fundamentally, this is because of the sharp fall in Sterling. However, technically, the FTSE 100 may be due for a correction. It has relentlessly traded upwards, however: 1) There is strong resistance to be expected at 7000, a psychological round number. 2) There is...

Exercise-Discipline Updated 

The S&P 500 index is breaking all time highs every week. However, it looks set for a fall. Fundamental: The US economy is strong. NFP was healthy, and whilst GDP missed on expectations, the FOMC's last statement was hawkish. In the medium term, the Federal Reserve should raise interest rates, which should put pressure on the global stock market. Technical: ...

Exercise-Discipline Updated 

GBPUSD reached 1.326 today off the back of a strong manufacturing PMI (53.3 vs 49.0 consensus). Fundamentally: Sterling should remain pressured, as manufacturing has a limited contribution to UK GDP, and the uncertainty of Brexit still looms. As long as this uncertainty remains, BoE should still look to cut rates and maintain QE. Technically: There is strong...

Exercise-Discipline Updated 

The Dollar Index, DXY, dipped to 94.3 today. However, on the 4H chart, there is strong divergence at this point. Furthermore, since late April, DXY has trended upwards on the 4H chart. If the trendline indicated holds, and DXY stays above 94.00, I expect the dollar to recover. Fundamentally, I feel that a neutral Fed has already been priced in to the market,...

Exercise-Discipline Updated 

NZDUSD touched a 14-month high yesterday at 0.7344. However, I believe it is overpriced, because: Fundamentally: the RBNZ are in a easing cycle, and cut rates at their last meeting. However, RBNZ struggled to devalue the NZD with their rate cut. Thus, I believe they will take a different approach in the coming months to devalue the NZD - perhaps in the way...

Exercise-Discipline

TVC:SPX The S&P 500 composite index reached 2129.79 today, just a point away from its all time high at 2130.82. This should provide a good place to short the S&P, because: Fundamentally: the outlook for the US economy is strong, with good job growth - however , the Federal Reserve should now look to increase interest rates slowly, which should gradually...