FXCM/DailyFX Signals and Analysis

[Jason Rogers]

Retail Crowd Flips Positioning in GBP/USD on Approach to Brexit Vote


The Speculative Sentiment Index (SSI) is a contrarian indicator to price action, and the fact that the majority of traders are short gives signal that the GBP/USD may continue higher. The ratio of long to short positions in GBP/USD stands at -1.05 as 49% of traders are long.

The trading crowd has flipped from net-long to net-short from Friday and last week. On Friday, the ratio was 1.45; 59% of open positions were long.

Long positions are 25.6% lower than on Friday and 33.0% below levels seen last week. Short positions are 13.0% higher than on Friday and 18.9% above levels seen last week. The combination of current sentiment and recent changes gives a further bullish trading bias.

 

[Jason Rogers]

Brexit Analysis Directory


The United Kingdom’s EU Referendum vote (known as the ‘Brexit’) is scheduled to begin early morning London time Thursday June the 23rd and run through the 10 PM. The subsequent tally can keep the market on edge waiting for a clear outcome well into Friday trade.

Why is this event so important? How far does its influence reach? What should you do in the face of this risk? Our research team has organized their analysis and background on the impending Brexit into a single page on DailyFX.com

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This aggregate page acts as a directory to find the DailyFX analysts’ broad coverage of this extremely important event for the entire financial system.

 

[Jason Rogers]

Brexit Referendum Could Present Far More Risk than Reward

There is one massive problem with exposure around Brexit: Unquantifiable risk.

The expectation is for extremely low liquidity as banks tighten up their risk, and this means that traders face even greater chances of gap risk against their positions. Traders looking to risk one-to-two percent could end up losing more if liquidity doesn’t exist to execute the stop at the desired rate.

 

[Jason Rogers]

Traders trying to pick bottom suggest GBP could drop further


Global markets were shocked by the UK's vote to leave the EU in yesterday's referendum. The British pound (GBP) dropped from a session high of 1.50197 to a session low of 1.32263, and is currently trading around 1.38 at the time of this post versus the US dollar (USD).

However, the latest readings from our Historical SSI indicator* show retail traders are back to buying the pound with more than half of retail positions (68.74%) long GBP/USD. That's close to the pre-Brexit high of 70.87% long positions.



* The Historical SSI indicator charts readings from our Speculative Sentiment Index in real time. SSI is a contrarian indicator to price action, and the fact that the majority of traders are long gives signal that GBP/USD may continue lower.

 

[Jason Rogers]

Building a Post-Brexit Trading Plan


Friday was an historic day in the markets as the outcome of Thursday's vote confirmed the United Kingdom voted to leave the European Union. Tyler Yell discusses the ripple effects to watch for in the Euro, the US dollar, stocks and oil in his article on DailyFX.com:

 

[Jason Rogers]

USD/JPY Bounces From Brexit Lows


Much of today’s USD/JPY advance has been predicated on international markets rebounding from last weeks “Brexit” vote.

USD/JPY Daily Chart

Trading instructor Walker England discusses this today in his article on DailyFX.com

 

[Jason Rogers]

European Equities Continue to Lag Behind U.K. in Post-Brexit Bounce


A continued bounce in GBP and Equities is bringing the world back from the ledge after last week’s Brexit referendum.

While recoveries are being seen in many markets, deviations and indications through price action may be highlighting a pertinent theme, as European equities continue to lag behind those from the U.K.

 

[Jason Rogers]

GBP/USD Technical Analysis: Break of Brexit Lows on Dovish BOE


GBP/USD is trading at 31-year lows driven by the anticipated dovish tilt from the Bank of England post-Brexit.

James Stanley provides technical analysis for the pair in his article on DailyFX.com

 

[Jason Rogers]

As Brexit-Borne Contagion Spreads, Falling Yields Boost JPY and Gold


As markets solidify themselves in the risk-off position, it's important to recognize the strengthening relationship between Gold and the Japanese Yen.

DailyFX.com Strategist Christopher Vecchio discusses this in today's video.

 

[Jason Rogers]

US Labor Data Sets Up Better US NFPs


The first look at June US labor data came in above expectations and roughly in line with trend, setting up Friday’s US Nonfarm Payrolls release to post a rebound after May's abhorrent number. US ADP employment came in at +172K, beating expectations of +160K.

EUR/USD 1-minute Chart (July 7, 2016 Intraday)

In an immediate response to the data, EUR/USD slipped, trading to $1.1067 from $1.1087, and then recovered to near $1.1090. ADP employment is an guide of what to expect for Friday’s NFP report but it is not a direct link; a contemporaneous relationship has been exhibited.

Christopher Vecchio covers this in more detail looking to tomorrow's June US NFP report in his article on DailyFX.com