Vantage FX Daily Market Update

[Vantage FX]

FOMC Expectations and the BoJ Keeps us Hanging
March 16, 2016Dane Williams


Image: Carl Icahn

FOMC Expectations:
An inconsistent, mixed trading day for the US Dollar yesterday and with more of the same expected heading into FOMC, keeping an eye on your major technical levels will be vital.

Today’s economic calendar looks quiet during Asia so we could see an erratic one as traders anticipate the moves to come tomorrow morning during FOMC.

We do see CPI released beforehand, but it’s a release that’s not going to have an effect on decision making this far out, so take the short term volatility that may accompany the release for what it is.

As for the FOMC meeting itself, nobody is expecting a move at this meeting but as we’ve spoken about before, the improvement in the jobs market, the commodity price rebound, as well as a relaxation around market conditions worldwide has surely given reason for the Fed to relax and head forward on the path toward monetary policy normalisation. Something markets aren’t quite pricing in and where some short term trading opportunity lies.

From Monday’s Central Banks’ Right of Reply blog:

“In my opinion, the biggest divergence in market expectation and actual pricing lies between the USD and the Fed rate hike timeline.”

While a rate hike isn’t expected (key word) tomorrow morning, it’s really all about the accompanying policy statement and the famous dot plot. Just a heads up that we also get a press conference following this meeting.

Consider what I’ve said here and where you see markets positioned heading into the release.

BoJ Keeps us Hanging:
Yesterday’s BOJ monetary policy announcement saw the bulls take control of the Japanese Yen as Kuroda and his merry men didn’t deliver the dovish guidance that markets have come to expect from them.

If you follow @Vantage FX on Twitter and were online waiting for the release scheduled as ‘tentative’, then you surely had some fun. The fun GIFs were out in force across finance Twitter as traders speculated on whether the time they were taking to make an announcement meant that a surprise was in store. Just look at that price action leading up to the release!








But in the end, the BoJ announced what was expected and the Yen caught a slight bid. However, it’s worth keeping in mind that Kuroda didn’t actually rule out any additional easing in the short term.

Further to JPY, yesterday’s chart of the day featured a possible AUD/JPY short setup.

AUD/JPY Hourly:

Click on chart to see a larger view.

This setup was a perfect example of why you should be using higher time frame levels even as a day trader. As you can see, price pushed up into the daily resistance level before we got our intra-day short set-ups on the hourly chart at short term support/resistance retests.

———

On the Calendar Wednesday:
GBP Average Earnings Index 3m/y
GBP Claimant Count Change

CAD Manufacturing Sales m/m
GBP Annual Budget Release
USD Building Permits
USD CPI m/m
USD Core CPI m/m
USD Crude Oil Inventories

Do you see opportunity trading Forex? Take advantage on your own instant $50,000 Forex demo.

Dane Williams – @VantageFX

Risk Disclosure: In addition to the website disclaimer below, the material on this page prepared by Australian Forex broker Vantage FX Pty Ltd does not contain a record of our ECN Forex account prices or solicitation to trade. All opinions, news, research, prices or other information is provided as general news and marketing communication – not as investment advice. Consequently any person acting on it does so entirely at their own risk. The experts writers express their personal opinions and will not assume any responsibility whatsoever for the actions of the reader. We always aim for maximum accuracy and timeliness, and Vantage FX on the MT4 platform, shall not be liable for any loss or damage, consequential or otherwise, which may arise from the use or reliance on this service and its content, inaccurate information or typos. No representation is being made that any results discussed within the report will be achieved, and past performance is not indicative of future performance.

About Dane Williams
Dane Williams is a Vantage FX Market Analyst. Dane shares his thoughts and analysis in our News Centre. View all posts by Dane Williams →

 

[Vantage FX]

Fed on Hold: A Look at the Dot Plot and EUR/USD
March 17, 2016Dane Williams


Image: From Boston to San Fran

Fed on Hold: A Look at the Dot Plot and EUR/USD:

“USD Federal Funds Rate – <0.50% v <0.50% expected"



This morning’s FOMC decision and accompanying statement came and went as expected after announcing that the funds rate will be left in the same 0.25%-0.5% range since hike number one.

We talk a lot about the ‘dot plot’ both here and on social media so I wanted to go into a little more detail around what the graph actually means.

The dot plot is a graph that while not officially part of setting policy, provides markets with excellent insight into how the Fed as whole is feeling about interest rates heading into future meetings. As market expectations are key when it comes to fundamental analysis for Forex traders, the insight this graph shows is invaluable.

Each dot represents one FOMC participant and where they think that the Fed funds rate will be at certain time periods in the future. Each dot on the plot stays anonymous and obviously the further out the prediction, the more open to change it will be.







In terms of comparing this month’s 2016 dot plot to the last, the median fell from four hikes to just two. As mentioned above, looking further than that is always hit and miss so take the rest with a grain of salt.

As for the statement and press conference, global growth issues, jobs and inflation were again the key factors that the Fed focuses on when it comes to making the decision on when to embark on interest rate hike number two.

The Labor market has been on a steady improve with consistently good NFP numbers and a drop in the unemployment rate, but inflation has continued to be the rock blocking the path. Even with the most recent commodity price rebound, Yellen has made it clear that any pressure is being viewed as transitory within the Fed.

“Proceeding cautiously will allow us to verify that the labour market is continue to strength given the economic risk from abroad.”

Cautious, cautious, cautious…

Overall the Fed is still a lot more cautious than I expected them to be. The rhetoric is very slow and steady and ‘don’t shock markets’ looks to remain the mandate. Nobody can complain about that and both the bulls and bears shouldn’t have too much to complain about here.

———-

Chart of the Day:
So what does all that mean for the US Dollar on the charts?

I’ve been speaking about some possible divergence between market expectation and actual pricing when it comes to the Fed’s next interest rate hike, but it seems I was too optimistic, too soon.

EUR/USD Daily:

Click on chart to see a larger view.

Taking a look at the EUR/USD daily chart, I’ve marked Draghi’s disappointment and then Yellen’s today which both sent the USD falling against the Euro (EUR/USD jolting hard to upside).

But compare the two moves and you can see which central bank’s policy is erratic in terms of shocking markets and which one is steady, delivering on what they say they consistently. Central bank policy doing what it is supposed to do, vs what it should avoid.

EUR/USD Hourly:

Click on chart to see a larger view.

The hourly is just a zoomed in view to highlight both the move and the fib levels which I had left on my chart. We now have new highs, and any re-test of previous resistance as support is what we’ll be looking for from here.

———

On the Calendar Thursday:
NZD GDP q/q (0.9% v 0.7% expected)
AUD RBA Assist Gov Debelle Speaks
AUD Employment Change
AUD Unemployment Rate
JPY BOJ Gov Kuroda Speaks

CHF Libor Rate
CHF SNB Monetary Policy Assessment
GBP MPC Official Bank Rate Votes
GBP Monetary Policy Summary
GBP Official Bank Rate

USD Philly Fed Manufacturing Index
USD Unemployment Claims

Do you see opportunity trading EUR/USD? Take advantage on your own instant $50,000 Forex demo.

Dane Williams – @VantageFX

Risk Disclosure: In addition to the website disclaimer below, the material on this page prepared by Forex broker Vantage FX Pty Ltd does not contain a record of our ECN trading prices or solicitation to trade. All opinions, news, research, prices or other information is provided as general news and marketing communication – not as investment advice. Consequently any person acting on it does so entirely at their own risk. The experts writers express their personal opinions and will not assume any responsibility whatsoever for the actions of the reader. We always aim for maximum accuracy and timeliness, and Vantage FX on the MT4 platform, shall not be liable for any loss or damage, consequential or otherwise, which may arise from the use or reliance on this service and its content, inaccurate information or typos. No representation is being made that any results discussed within the report will be achieved, and past performance is not indicative of future performance.

About Dane Williams
Dane Williams is a Vantage FX Market Analyst. Dane shares his thoughts and analysis in our News Centre. View all posts by Dane Williams →

 

[Vantage FX]

BoJ Intervention: When Will Central Banks Learn?
March 18, 2016Dane Williams


Image: Paradigm Malibu

BoJ Intervention: When Will Central Banks Learn?
When are Central Banks (and traders for that matter) going to learn that central bank intervention is a waste of time? The free market always wins. Not sometimes wins, ALWAYS WINS.

USD/JPY Daily:

Click on chart to see a larger view.

Yesterday as USD/JPY headed down toward the 111.000 level, we again saw a huge upward spike. While nothing official, this has been widely accepted as Japanese central bank intervention.

USD/JPY 15 Minute:

Click on chart to see a larger view.

Looking at price action on the 15 minute chart, the way that price spikes up and then just slowly but steadily makes its way back to ‘market value’ has all the hallmarks of a failed intervention.

Just simply compare the invention move to the previous day’s fall at the left of the chart and come to your own conclusion about intervention vs market driven moves.

The risks in this pair are still skewed to the downside, but the BoJ isn’t going to give up that easily. Yen traders, strap yourselves in because you’re in for a wild ride ahead!

———-

Chart of the Day:
Following up from our early week look at the AUD/JPY chart, today’s Yen themed blog moves across to EUR/JPY.

EUR/JPY Daily:

Click on chart to see a larger view.

The daily chart shows a clear bearish trend and break of daily support after a strong move down from trend line resistance. With price coming back to res-test the broken level, we’ve gotten a pause but nothing more substantial.

I do like using this level to manage your risk around if you’re playing from the short side. Something we’ll look more at on the @VantageFX Twitter account.

———

On the Calendar Friday:
JPY Monetary Policy Meeting Minutes

CAD Core CPI m/m
CAD Core Retail Sales m/m

USD Prelim UoM Consumer Sentiment

Do you see opportunity trading USD/JPY? Take advantage on your own instant $50,000 Forex demo.

Dane Williams – @VantageFX

Risk Disclosure: In addition to the website disclaimer below, the material on this page prepared by Australian Forex broker Vantage FX Pty Ltd does not contain a record of our ECN forex trading prices or solicitation to trade. All opinions, news, research, prices or other information is provided as general news and marketing communication – not as investment advice. Consequently any person acting on it does so entirely at their own risk. The experts writers express their personal opinions and will not assume any responsibility whatsoever for the actions of the reader. We always aim for maximum accuracy and timeliness, and Vantage FX on the MT4 platform, shall not be liable for any loss or damage, consequential or otherwise, which may arise from the use or reliance on this service and its content, inaccurate information or typos. No representation is being made that any results discussed within the report will be achieved, and past performance is not indicative of future performance.

About Dane Williams
Dane Williams is a Vantage FX Market Analyst. Dane shares his thoughts and analysis in our News Centre. View all posts by Dane Williams →

 

[Vantage FX]

Negative Rates and Inflation: Economists v Traders
March 21, 2016Dane Williams


Image: Sundgren

Negative Rates and Inflation: Economists v Traders
With only a handful of data releases in this Easter shortened trading week, I wanted to take a step back to consider the effect that negative interest rates have on inflation, and then how that could affect Forex markets heading forward.

This was a topic that the Fed’s James Bullard spoke about last Friday and that I wanted to go into more detail on.






Image: Wirtschaftsblatt

So, remember how you’re a Forex trader now and you should forget any conventional economics theory that you’ve learned along the way because markets are crazy, irrational beasts? Well how about this one from Bullard on Friday:

“The continuing ZIRP in the G-7, far from putting dangerous upward pressure on inflation, may be leading us to an outcome with low nominal interest rates and low inflation that can last for a very long time.”

Wait, what?? Isn’t the whole idea of easing monetary policy and the desperate measure of negative rates where you’re essentially charging to save, to encourage spending? Spending which would eventually put upward pressure on inflation?

“This contrasts sharply with conventional wisdom and central bank rhetoric, including much of my own, which emphasises that ZIRP is putting upward pressure on inflation and offers the best hope for returning inflation to target.”

Ah yes James, thank you.

The problem here lies in that the future under long term low interest rates (let alone negative rates) is really a great unknown. If consumers think that something will be cheaper in the future, then they aren’t going to spend now. This seems to be what is happening and is causing some big (bald) head scratching in central bank policy meetings around the world.

Forex trading is not economic theory. Remember that it’s not about being right or wrong, it’s about how much money you make.

———-

Chart of the Day:
With the first major market moving event of the week on the forex calendar coming tomorrow as the RBA Governor Glenn Stevens delivers a speech to the ASIC annual forum, we take a look at the Aussie Dollar as today’s chart of the day.

AUD/USD Daily:

Click on chart to see a larger view.

Keeping it clear and simple today, price is moving along nicely upward within a bullish channel. But how much further will it likely run?

The negative interest rate issue we spoke about above is driving the higher yielding Aussie higher whether the RBA like it or not. Any jawboning, like what we’ve seen from Debelle calling for 60c, is likely to be just a short term fix which gives opportunity for the bulls to soak up more orders at better prices.

There have been a few headlines floating around today calling the top in the Aussie but as traders, the bigger risk heading into and beyond this week’s speech is definitely to the upside.

———

On the Calendar Monday:
JPY Bank Holiday

“Japanese banks will be closed in observance of Vernal Equinox Day.”

Do you see opportunity trading FX? Take advantage on your own instant $50,000 Forex demo.

Dane Williams – @VantageFX

Risk Disclosure: In addition to the website disclaimer below, the material on this page prepared by ASIC Forex broker Vantage FX Pty Ltd does not contain a record of our ECN FX prices or solicitation to trade. All opinions, news, research, prices or other information is provided as general news and marketing communication – not as investment advice. Consequently any person acting on it does so entirely at their own risk. The experts writers express their personal opinions and will not assume any responsibility whatsoever for the actions of the reader. We always aim for maximum accuracy and timeliness, and Vantage FX on the MT4 platform, shall not be liable for any loss or damage, consequential or otherwise, which may arise from the use or reliance on this service and its content, inaccurate information or typos. No representation is being made that any results discussed within the report will be achieved, and past performance is not indicative of future performance.

About Dane Williams
Dane Williams is a Vantage FX Market Analyst. Dane shares his thoughts and analysis in our News Centre. View all posts by Dane Williams →

 

[Vantage FX]

AUD/USD Longs: The Risk
March 22, 2016Dane Williams


Image: The Australian

AUD/USD Longs: The Risk
A slightly unusual Asian session ahead, with RBA Governor Glenn Stevens due to speak about ‘the global financial sector resilience, volatility, and connectedness’ at the Australian Securities & Investment Commission Annual Forum in Sydney this afternoon.

To satisfy your OCD (and come on, we’re all traders here which means we all have at least a mild case), we still have the usual 11.30am Sydney releases in the form of second tier Australian HPI as well as the RBA’s Assistant Governor Malcolm Edey, due to participate in a panel discussion about ‘risks related to central counterparties’ at the Australian Securities & Investment Commission Annual Forum in Sydney.

What to expect from Glenn Stevens and the Aussie Dollar changed dramatically yesterday, as Australian Prime Minister Malcolm Turnbull announced that parliament would be recalled early to try to push Australian Building and Construction Commission legislation through the senate ASAP. (For those playing at home, the bill is to restore this building industry watchdog as well as a second to set up a commission that will monitor unions.)

“Australian political jargon, blah blah blah who cares”, I can hear you saying already. Well it actually does have a major impact on Forex markets, so bear with me. If the bill doesn’t go through the senate then an early federal election will be called. A Federal election campaign that the RBA will surely at all costs avoid cutting rates in the midst of.






With ANZ one of the first to revise their calls for a further rate cut immediately on the back of the news, the Aussie dollar could be in for a bit of a re-pricing as the news is digested worldwide.

AUD/USD Hourly:

Click on chart to see a larger view.

Looking at the AUD/USD hourly chart, the red support/resistance zone that price is flirting with just happens to be a previous weekly swing low. As it’s a weekly resistance level, the hourly price action of a possible breakout then retest might not be as clean as the textbooks would lead you to believe, but the level is there to plan playing from the long side if you’re that way inclined.

The other risk to AUD/USD longs is the risk of Stevens jaw-boning the currency down during his afternoon speech. This is one that I’m not too sure about though, and with the headline expectation of some sort of artificial downward pressure on the Aussie, actually see the greater risk being a miss in expectations and spike to the upside if nothing comes.

Really, we don’t know what Stevens or the RBA thinks about the election situation yet. This is where both the risk and opportunity lies in playing the Aussie from the long side.

———-

Chart of the Day:
I know that the AUD/USD weekly chart doesn’t change much and I include it in my blogs a lot, but I couldn’t publish the above hourly chart without the higher time frame context that the weekly provides.

AUD/USD Weekly:

Click on chart to see a larger view.

This is where you can see the weekly swing low I’m referring to on the hourly chart above. That little red line is actually the hourly zone on that chart.

Yes, context indeed!

———

On the Calendar Tuesday:
AUD RBA Gov Stevens Speaks

EUR German Ifo Business Climate
GBP CPI y/y
EUR German ZEW Economic Sentiment

A bit of a mixed bag on the Forex Calendar during today’s trading session. I’ve marked out only the tier one releases above, but today is the sort of trading day that I’d highly advise keeping the News Terminal that we will continue to offer free to our live traders open.






Do you see opportunity trading Forex? Take advantage on your own instant $50,000 Forex trading demo account.

Dane Williams – @VantageFX

Risk Disclosure: In addition to the website disclaimer below, the material on this page prepared by ASIC regulated Forex broker Vantage FX Pty Ltd does not contain a record of our ECN Forex broker prices or solicitation to trade. All opinions, news, research, prices or other information is provided as general news and marketing communication – not as investment advice. Consequently any person acting on it does so entirely at their own risk. The experts writers express their personal opinions and will not assume any responsibility whatsoever for the actions of the reader. We always aim for maximum accuracy and timeliness, and Vantage FX on the MT4 platform, shall not be liable for any loss or damage, consequential or otherwise, which may arise from the use or reliance on this service and its content, inaccurate information or typos. No representation is being made that any results discussed within the report will be achieved, and past performance is not indicative of future performance.

About Dane Williams
Dane Williams is a Vantage FX Market Analyst. Dane shares his thoughts and analysis in our News Centre. View all posts by Dane Williams →

 

[Vantage FX]

Brussels Wild Whipsaw
March 23, 2016Dane Williams


Image: HD Timelapse

Brussels Wild Whipsaw
A wild whipsawing session for both Forex and stock Indices overnight as news of yet more terrorism in Europe hit the newswires.

At least 31 people were killed in Brussels, Belgium as terrorists detonated bombs in the public passenger hall of Brussels airport and in a local subway station.

These horrible incidents follow the Paris terrorist attacks back in November… While no doubt adding to to European security concerns around the issue of migration, the affect on markets could be muted. This just happens too much now for it to be a sustained market moving event. Sad but true, but the focus stays elsewhere.

Aussie Long: The Risk Follow Up:
RBA Governor Glenn Stevens didn’t give the jawboning that we spoke about in yesterday’sAUD/USD blog. Some key quotes have been picked out of Steven’s speech here:

“So at the turn of the year the Australian economy seemed to have been picking up. That’s a good starting point. In the case of business surveys, better conditions seem generally to have continued in the early part of 2016, though labour market data have been more ambiguous.”

“Even with interest rates at already low levels, and public debt higher than it was, there would, in the event of a serious economic downturn, be more room to ease both monetary and fiscal policy than in many, indeed most, other countries.”

What we were looking for ourselves yesterday:

“As it’s a weekly resistance level, the hourly price action of a possible breakout then retest might not be as clean as the textbooks would lead you to believe, but the level is there to plan playing from the long side if you’re that way inclined.”

While wanting to play from the long side, the hourly level was never expected to be cleanly respected as it was also a weekly resistance zone.

AUD/USD Hourly:

Click on chart to see a larger view.

Throw in a central banker’s speech, a terrorist attack and the risks were always there. But the level held and the bounce was complete by the end of the night.

Higher from here?

———-

Chart of the Day:
The British Pound was the major loser overnight following the Brussels attack, as speculation thatBrexit campaign momentum will now increase.

With immigration and what to do with the influx of refugees and economic migrants front and centre of British politics when it comes to staying in the EU, any events that add to the argument against immigration and the free movement of people throughout European borders just adds fuel to the Brexit fire.

Not to mention last night’s GBP inflation number continuing to underwhelm:

“GBP CPI y/y (0.3% v 0.4% expected)”

The BoE just can’t raise rates while inflation prints these sorts of numbers over and over. Add this to the terrorism/migration headlines that we are going to continue to see printed front and centre and the Pound is likely to stay under pressure.

So what about the charts?

GBP/USD 15 Minute:

Click on chart to see a larger view.

The 15 minute shows the intraday support level that broke HARD overnight.

GBP/USD Weekly:

Click on chart to see a larger view.

In the context of the bigger picture, you can see that possibly this was the final retest after breaking major weekly support?

I continue to be bearish GBP and have a technical analysis blog in the works explaining why.

———

On the Calendar Wednesday:
CAD Annual Budget Release

USD Crude Oil Inventories

Do you see opportunity trading Forex with Vantage FX? Take advantage on your own instant $50,000 Forex trading demo account.

Dane Williams – @VantageFX

Risk Disclosure: In addition to the website disclaimer below, the material on this page prepared by Forex broker Vantage FX Pty Ltd does not contain a record of our prices or solicitation to trade. All opinions, news, research, prices or other information is provided as general news and marketing communication – not as investment advice. Consequently any person acting on it does so entirely at their own risk. The experts writers express their personal opinions and will not assume any responsibility whatsoever for the actions of the reader. We always aim for maximum accuracy and timeliness, and Vantage FX on the MT4 platform, shall not be liable for any loss or damage, consequential or otherwise, which may arise from the use or reliance on this service and its content, inaccurate information or typos. No representation is being made that any results discussed within the report will be achieved, and past performance is not indicative of future performance.

About Dane Williams
Dane Williams is a Vantage FX Market Analyst. Dane shares his thoughts and analysis in our News Centre. View all posts by Dane Williams →

 

[Vantage FX]

Welcome Back! Indices and the Kiwi in Play
March 29, 2016Dane Williams


Image: All Wallpaper

Welcome Back! Indices and the Kiwi in Play
Markets return to normal service today following the Easter long weekend. I trust that you used your time away from the charts wisely and used the downtime to refresh your body and mind.

Knowing when to take a break is an essential psych aspect of Forex trading and can do wonders for maintaining your positive P&L. If you ever find yourself taking dumb trades because your head just isn’t in the game, step away and return when your head is clear. Simple solution.

During thin trading conditions such as holiday Friday and Monday, markets can either go mental and whipsaw like crazy, or markets can peter out and do nothing. This weekend was most definitely the second option, with Forex markets all basically back where they started and nothing too exciting to report in the short term.

US stocks did trade yesterday, but it’s this higher time frame level that Indices traders will be watching with interest:

S&P 500 Weekly:

Click on chart to see a larger view.

With major trend line support across Indices holding, price has rallied hard away from the level. This means that our breakout lower scenario was never given a chance and as the S&P 500 price approaches the top of the range, attention turns to this level instead.

The marked green zone will be the area of interest for sellers and in the short term at least, fading into that level shouldn’t give you too many problems.

SPI200 Weekly:

Click on chart to see a larger view.

The Australian SPI 200 has the same characteristics as it’s big brother across the Pacific, but hasn’t managed to come anywhere near its previous highs. With trend line resistance still there, we have the same type of setup in play on this market as well.

Whenever you have a technical setup on the S&P 500 chart, take a look at all of the other Indices markets and quite often, at least the same type of setup will be there.

Yellen speaks tonight and we have NFP on Friday. Futures markets have priced in just a 6% chance of a hike in April, but Fed speakers have done all they can to keep us confused as to what they actually want to do with rates. Speaking on direction here would be nothing but a punt, but the greater risk is for a violent USD move to the upside if things suddenly get hawkish in reality and markets have to go through a big repricing from expectations.

———-

Chart of the Day:
The one Forex chart that has caught my eye is the Kiwi.

NZD/USD Weekly:

Click on chart to see a larger view.

The NZD/USD weekly chart shows that the Kiwi is actually in some sort of ‘fair value zone’ here. Yes, that is a 600 pip zone which for many of us day traders is pretty useless as a trading level alone, but you have to train your mind to realise that the higher time frame levels aren’t for using alone.

NZD/USD 4 Hourly:

Click on chart to see a larger view.

Zooming into the 4 hourly Kiwi chart and this lower time frame chart is where you can find the levels to manage your risk around.

In the context of the higher time frame chart above, you have two options here. You can take the view that this pause is just short term consolidation in a flag pattern before this lower trend line breaks and price heads lower again. Or you can use this marked trend line support as an early entry to play for a breakout of the weekly range.

I personally like the first but want you to share your Kiwi trading scenarios with the #forex community on Twitter. Mention @VantageFX and we’ll RT your charts and continue the discussion there.

———

On the Calendar Tuesday:
Check out the Vantage FX economic calendar for a preview of what is ahead during today’s trading day. If you like what you see, then download the News Terminal which is, and will continue to be free for all funded, Vantage FX live account holders.



Do you see opportunity trading Forex with Vantage FX? Take advantage on your own instant $50,000 Forex demo account.

Dane Williams – @VantageFX

Risk Disclosure: In addition to the website disclaimer below, the material on this page prepared by Forex broker Vantage FX Pty Ltd does not contain a record of our prices or solicitation to trade. All opinions, news, research, prices or other information is provided as general news and marketing communication – not as investment advice. Consequently any person acting on it does so entirely at their own risk. The experts writers express their personal opinions and will not assume any responsibility whatsoever for the actions of the reader. We always aim for maximum accuracy and timeliness, and Vantage FX on the MT4 platform, shall not be liable for any loss or damage, consequential or otherwise, which may arise from the use or reliance on this service and its content, inaccurate information or typos. No representation is being made that any results discussed within the report will be achieved, and past performance is not indicative of future performance.

About Dane Williams
Dane Williams is a Vantage FX Market Analyst. Dane shares his thoughts and analysis in our News Centre. View all posts by Dane Williams →

 

[Vantage FX]

Janet’s Cryptic Code Continues
March 30, 2016Dane Williams


Image: Guardian

Janet’s Cryptic Code Continues
Deciphering the central bank rhetoric is a little like doing the cryptic crossword in your local Sunday newspaper. The paper says one thing, but it’s not actually the point they are trying to make! Janet Yellen’s speech on ‘outlook, uncertainty and monetary policy’ in New York overnight did exactly that.

You can read the full speech by clicking the link to the Federal Reserve website in the text above, but here are a few key extracts that the market has read and reacted off of:

“I consider it appropriate for the committee to proceed cautiously in adjusting policy.”

“Reflecting global economic and financial developments since December, however, the pace of rate increases is now expected to be somewhat slower.”

The US Dollar of course took a hit on this renewed swing back to the dovish side from the Fed, making sure that markets weren’t getting ahead of themselves with optimism. This meant that the EUR/USD and the S&P 500 index rallied.

‘Money stays cheap’ for longer still it would seem, and that’s good news if you’re long equities or any of the Indices markets that you can trade on MT4 with Vantage FX.

EUR/USD Daily:

Click on chart to see a larger view.

S&P 500 Daily:

Click on chart to see a larger view.

Running with the newspaper analogy, the speech was just as much a ‘finder word’ for markets as it was a cryptic crossword. Words like: ‘cautious’ and ‘slower’ both jumping out of the screen when you read the transcript.

But the dovish tone was tarnished slightly during the Q&A session when Yellen went on to say that the US economy has proven to be ‘resilient’.

One for the finder word that you can highlight in a different colour because that is the one that stands out against the doom and gloom.

———-

Chart of the Day:
Following yesterday’s Kiwi in play, chart of the day, I encouraged you guys to get involved with sharing your charts on Twitter. I’m really proud of the active online trading community that we’re building with @VantageFX and want to thank everyone that got involved in yesterday’s NZD/USD discussion.

There was a great mix of ideas on how to trade the Kiwi from both the long and short side which is exactly what makes the markets we trade.

We’re going to try to make #TuesdayFX a weekly thing from now on, so give @VantageFX a follow and come get involved!

EUR/NZD Daily:

Click on chart to see a larger view.

During yesterday’s NZD/USD chat, @Pipstealer_ shared this gem of a chart on the related EUR/NZD.

The chart has inspired me to catch Kiwi fever and I soon added both EUR/NZD and the following GBP/NZD daily charts to my MT4 watch list.

GBP/NZD Daily:

Click on chart to see a larger view.

Both charts present the same type of setup where price is trending down inside a bearish channel. Again, both pairs have been rejected off channel resistance and are testing/breaking their short term flag pattern and looking lower.

This is the sort of trade where fighting the trend just feels like unnecessary pain for yourself and your account. Will be looking to sell strength on both these pairs.

———

On the Calendar Wednesday:
USD ADP Non-Farm Employment Change
USD Crude Oil Inventories

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Dane Williams – @VantageFX

Risk Disclosure: In addition to the website disclaimer below, the material on this page prepared by Australian Forex broker Vantage FX Pty Ltd does not contain a record of our prices or solicitation to trade. All opinions, news, research, prices or other information is provided as general news and marketing communication – not as investment advice. Consequently any person acting on it does so entirely at their own risk. The experts writers express their personal opinions and will not assume any responsibility whatsoever for the actions of the reader. We always aim for maximum accuracy and timeliness, and Vantage FX on the MT4 platform, shall not be liable for any loss or damage, consequential or otherwise, which may arise from the use or reliance on this service and its content, inaccurate information or typos. No representation is being made that any results discussed within the report will be achieved, and past performance is not indicative of future performance.

About Dane Williams
Dane Williams is a Vantage FX Market Analyst. Dane shares his thoughts and analysis in our News Centre. View all posts by Dane Williams →

 

[Vantage FX]

USD at 5 Month Lows and Draghi Grinning Like a Cheshire Cat
March 31, 2016Dane Williams


Image: The Gateway Pundit

USD at 5 Month Lows and Draghi Grinning Like a Cheshire Cat
The US Dollar hit its lowest price in 5 months overnight, as the market continued to price in even less chance that the Fed hikes in the near term.

I am a little surprised at this run, as I thought the risk was skewed greater to the upside in USD. With the Fed as wishy-washy as they are, I still think this could be too much, and setup for the mother of all USD rallies when they ‘surprise us’, but that’s well and truly putting the kart before the horse now, with markets pricing in just a 21% chance of a hike priced in for June and a 55% chance for 2016 at all.

Moving on, and last night’s notoriously unreliable ADP, the reading was basically in line with expectations and therefore didn’t get markets too excited.

“USD ADP Non-Farm Employment Change (200K v 195K expected and 205K (revised down 9K) previous)”

The 200K jobs added in the private sector was all but in line with expectations and the 9K downward revision from the previous month again really nothing to write home about when the ADP is so infamous as an indicator for Friday’s NFP:

“USD Non-Farm Employment Change (206K expected and 242K previous)”

All this US Dollar weakness gave the Euro and Kiwi the biggest boost, thanks to the hunt for yield/stability and better than expected economic data respectively.

EUR/USD 4 Hourly:

Click on chart to see a larger view.

As you can see from the above EUR/USD 4 hour chart, price came within just a few pips of taking out the 2016 highs. With better than expected business confidence and consumer prices within the Eurozone, Draghi will be grinning like a Cheshire cat that the ECB’s stimulus may actually be filtering through!

We have further 2nd tier German data tonight on the economic calendar which will probably take on further importance with the Euro buzzing around this level.

———-

Chart of the Day:
As for the Kiwi, this was my main scenario that I have been looking for this week:








Overnight price pushed right up into projected channel resistance and the long wicks show that sellers are definitely present:

NZD/USD 4 Hourly:

Click on chart to see a larger view.

If you agree with the short bias, keep watching the lower time frame charts from here for any possible re-tests of previous short term support now acting as resistance.

Keep an eye on the @VantageFX Twitter feed for more on this potential setup as it unfolds.

———

On the Calendar Thursday:
NZD ANZ Business Confidence

GBP BOE Gov Carney Speaks
GBP Current Account

EUR German Retail Sales m/m
EUR German Unemployment Change

CAD GDP m/m
USD Unemployment Claims

Expecting Asia to be a quiet one with Kiwi business confidence the tier 2 highlight.

Do you see opportunity trading Forex with Vantage FX? Take advantage on your own instant $50,000 Forex Forex demo.

Dane Williams – @VantageFX

Risk Disclosure: In addition to the website disclaimer below, the material on this page prepared by Forex broker Vantage FX Pty Ltd does not contain a record of our prices or solicitation to trade. All opinions, news, research, prices or other information is provided as general news and marketing communication – not as investment advice. Consequently any person acting on it does so entirely at their own risk. The experts writers express their personal opinions and will not assume any responsibility whatsoever for the actions of the reader. We always aim for maximum accuracy and timeliness, and Forex Broker Vantage FX on the MT4 platform, shall not be liable for any loss or damage, consequential or otherwise, which may arise from the use or reliance on this service and its content, inaccurate information or typos. No representation is being made that any results discussed within the report will be achieved, and past performance is not indicative of future performance.

About Dane Williams
Dane Williams is a Vantage FX Market Analyst. Dane shares his thoughts and analysis in our News Centre. View all posts by Dane Williams →

 

[Vantage FX]

NON-FARM Payrolls: Expectations and Scenarios
April 1, 2016Dane Williams


Image: Corporate Livewire

NON-FARM Payrolls: Expectations and Scenarios
Hello April!

I sat down this morning thinking that I’d write some sort of April fool’s joke type piece saying that the Fed had raised rates in an ad-hoc meeting in a New York City bunker overnight, but I quickly decided against it to avoid being sued…

April Fool’s Day or not, today is also NFP Friday. The Fed rhetoric leading into tonight’s labour market print has maybe dampened the importance of this particular release a little bit, but it’s an NFP number nonetheless which means volatility and trader expectation.

With the tick over to the new month, the US Dollar actually experienced its worst quarter in more than five years. When you stop to think that this is actually a quarter following a rate hike, that strikes a chord with me. This is why throughout my writing, I try to express the importance of market expectations and where the greatest risk lies if these expectations are not met. The actual decision or data point itself is not as important.

While the US labour market has been the one shining light beaming out of the faltering US economy, Janet Yellen and her boys at the Fed have made it crystal clear over the last month or so, that labour market strength alone will not be enough to tilt their hand toward a second hike. Unless there is a significant pickup in stubbornly low inflation as well as the ever present global growth factors, a hike in 2016 just isn’t going to happen.

This leads me to think that no matter the NFP number that prints tonight, it is more likely to be USD negative than positive. Of course you can’t be sure, but you can assess in which direction the greatest risk is posed. In this case I would say USD negative, and here is why:

If NFP beats expectation: The number could be ignored as markets take Yellen on her word that continued good labour market numbers aren’t enough for the Fed to move again. A spike on the headline print could very well happen, but the ADP number was nothing to write home about.

If NFP misses expectation: The sole ‘good news’ element of the US economy right now will have been lost, and combined with the Fed’s reluctance to move, USD will likely drop, Potentially drop hard.

EUR/USD Daily:

Click on chart to see a larger view.

With price sitting at major resistance on EUR/USD, does this suggest a break-out to the upside on the cards?

We will be taking a look at some short term tradable scenarios in further detail on the@VantageFX Twitter feed throughout the trading day, so come and say hello!

Just a heads up that ISM Manufacturing PMI, one of the leading tells for the month’s NFP number, is actually released an hour and a half after NFP tonight. While it doesn’t help the economists in trying to pull out the expected NFP number, it does give traders an opportunity for a post NFP move if you’re still in the game.

———-

Chart of the Day:
On NFP Friday, it’s smart to do an overview of both the US Dollar as well as the S&P 500. But having done the S&P a couple of times this week already, lets mix it up a little and take a look attrading Gold.

GOLD Weekly:

Click on chart to see a larger view.

The weekly chart is where the action has been, basically since the famous ‘tulipmania like top’ back in 2011. Contrary to the recent bullish headlines, it is important to consider that this latest 2000 pip rally is still just a counter trend move, within a longer term bearish trend.

Over the last month or so, price has flirted with trend line resistance. Flirted with a break out, but it has held.

GOLD 4 Hourly:

Click on chart to see a larger view.

Zooming into the 4 hour chart, you can see the price action I’m talking about when I use the word flirting.

The level is still very much being respected and as of this morning, price has tucked back in underneath trend line resistance. The fact we are in a long term bearish trend makes the touch from the underside of the line much more significant, and gives you a nice area to manage your risk around.

———

On the Calendar Friday:
CNY Manufacturing PMI
CNY Non-Manufacturing PMI
CNY Caixin Manufacturing PMI

GBP Manufacturing PMI

USD Average Hourly Earnings m/m
USD Non-Farm Employment Change
USD Unemployment Rate
USD ISM Manufacturing PMI

Do you see opportunity trading Forex with Vantage FX? Take advantage on your own instant $50,000 Forex Forex demo.

Dane Williams – @VantageFX

Risk Disclosure: In addition to the website disclaimer below, the material on this page prepared by Forex broker Vantage FX Pty Ltd does not contain a record of our prices or solicitation to trade. All opinions, news, research, prices or other information is provided as general news and marketing communication – not as investment advice. Consequently any person acting on it does so entirely at their own risk. The experts writers express their personal opinions and will not assume any responsibility whatsoever for the actions of the reader. We always aim for maximum accuracy and timeliness, and Forex Broker Vantage FX on the MT4 platform, shall not be liable for any loss or damage, consequential or otherwise, which may arise from the use or reliance on this service and its content, inaccurate information or typos. No representation is being made that any results discussed within the report will be achieved, and past performance is not indicative of future performance.

About Dane Williams
Dane Williams is a Vantage FX Market Analyst. Dane shares his thoughts and analysis in our News Centre. View all posts by Dane Williams →