The risk correction is causing investors to shift exposure away from risky unhedged US holdings… USDJPY looks set to continue the decline towards 106 as Japanese investors shift from US exposure (remember this is largely unhedged via a flat yield curve) to Europe (mostly hedged via a steep yield curve). Japanese pension funds I talk to are especially trying to...
Another chart update here in US Yields after last week. Once again, it may take a while for yields to break through here (if at all). It is important to track for all signs of impulsive rises (as mentioned in the 10Y). From a strictly wave perspective, it is a valid argument that the market is continuing to trade an incomplete ABC from November 2018 highs. The...
After reaching a major target for shorts here at 2.088 (we have been tracking this all year long, for those wanting to dig deeper you can see the attached charts in the archives) we can expect profit taking to be done. Smart money is taking profits as we enter into a very important CB combo, there is plenty of time to unwind and position from higher if...
Here we are witnessing the minimum target from a ABC perspective since the January highs at 2.799%. This sequence from here on should be viewed as corrective and will be a shallow retrace in the broader trend. There is little support here so the key levels to watch in play remain 2.286%. We may see some choppy waters here, however, the potential to retrace as...
This chart update comes after a conversation with @Kate25 .. here we are marking the end of the flows in the 2nd wave of a large 5 wave sequence to the downside for Dollar. To put simply, those betting on the highs in USD are outguessing the beginning of a 3rd impulsive wave to the downside as demand dampens. We have discussed many times in other ideas (see the...
Improved creditworthiness in the European periphery will incentivise investors (particularly Japanese) to continue shifting exposure away from risky (unhedged) US assets. An important side note is coming from US banks borrowing in Euros to help finance increased UST holdings due to tightness in the short-term USD funding markets. The move higher in EURUSD I am...
Here a very technical move in play once more, as the boat becomes overcrowded I expect the tree to be shaken any minute. Those following will know we attempted positioning for this swing earlier in the month, smart money is starting to track the change in trend coming whilst the unaware continue shooting for the moon. We are going to see a very large increase in...
On the RBNZ side, the cash rate was cut in early May to support Orr's outlook on employment and inflation with mentions of uncertainty around global economic growth. The initial slide in Yields and NZD (at the time markets were only 35% for a cut) was cooled via RBNZ's view that the move creates a more balanced outlook for rates. I am not expecting any further...
Here we are tracking the final chapter in a fact leg for the RBA cutting rates in early June. A lower cash rate will only boost housing related flows by a small amount (2.8%) and this is not enough to change the AUD housing sector outlook. RBA cuts are unlikely to overshadow the soft housing sector decline and to support AUD.. the cross will continue to drag and...
A very similar environment to BTC and other Cryptos. We are fading the extreme overshoots in the rally at current levels. From a technical perspective, we are capped below 16th May highs, after failing to clear these yesterday it is sending loud alarms that something is cooking in the background. A healthy correction is needed before anything else to the topside...
Here tracking the data from Europe stabilising and ECB forecasts firming. This is having a positive impact on risk and further policy easing as "tiering" will be taken off the table in June. Interesting the rise in trade tensions of late has only shown a minor dip in ZEW expectations. In other words, large hands are starting to look at possibilities of parking...
Here we are tracking a very technical move to the top of the range after positive European election results, an important hurdle cleared for those tracking the macro floor building in EURUSD. Timing wise we still have pending June ECB and Fed meetings to clear however it is just a matter of time, in my book, before Europe receives a positive outlook.The main...
As anticipated, Brexit taking over the headlines and the whistle for PM May's premiership is finally going to blow in extra-time. A bad result today in European elections will act as a catalyst for Conservatives to pull the trigger. After Tories lost over 1,300 seats in local elections, it is likely the Conservatives will finish in 5th today with around 7% of...
Here we are tracking a -27% correction on the menu for Litecoin. It is a very similar environment to that of the BTC and ETH charts (see attached). The books are looking particularly thin and smelling a flash crash towards 73. The upside is becoming very crowded, this rally can be faded in my books as a healthy correction looks overdue. From a technical...
Here we are trading a failure to break and clear 1.35 followed by a strong rebound. The upside is starting to look limited as the underlying flows favour bears as we enter value areas for those buying CAD retracements. On the Macro side, Poloz has emphasised the downside risks whilst remaining upbeat on the economy. He carries a belief that the slowdown is...
Here is a very interesting and technical call as we approach the top in the range. The weakness in global risk sentiment has been the main driver behind the move and we are now approaching value areas for longs to take profits and interesting areas for shorts to re-engage. On the macro side the underlying conditions remain, positive output gaps, above target...
Here we are dissecting the moves in this second major wave for EURUSD. Those with a background in waves will know this as an ending diagonal, something we have been tracking for some time live on Tradingview. The flow is becoming very congested and choppy in nature, a perfect range trading environment (those following will know we have been trading the ranges...
Here we are tracking the final fumes of an ending diagonal count . Those following will know it is a very similar setup for those tracking EURUSD with the USD sell-off in the leg showing signs of starting earlier (see attached: "MAJOR Reversal around the corner in EURUSD") ... A side note here that the EURUSD chart may need adjusting if we do not get any fills...
