Vantage FX Daily Market Update

[Vantage FX]

The Monday After…
April 4, 2016Dane Williams


Image: Her Campus

The Monday After…
Ah yes, the Monday after… This is what we got out of NFP Friday:

“USD Average Hourly Earnings m/m (0.3% v 0.2% expected)”

“USD Non-Farm Employment Change (215K v 206K expected and 245K revised up previous)”

“USD Unemployment Rate (5.0% v 4.9%)”

So as you can see, 215,000 jobs were added in March with a healthy +3,000 February revision. Average hourly earnings also increased from 0.2% to 0.3%, but the unemployment rate crept up to 5.0% from the previous 4.9%. This number was blamed on more people being roped into looking for work within the faltering bigger picture.

The night was another mixed bag, with the headline print ‘not terrible’ which shows strength is still there. But the tick up in the unemployment rate can be viewed as a sign that the weak underlying economy is forcing people back into the job market when maybe they wouldn’t have to if things were more stable.

Without having to go into the nitty gritty details which you can find on Bloomberg here, this double edged sword backs up Yellen’s ‘not yet’ approach to further rate hikes and the US Dollar reacted accordingly:

EUR/USD 15 Minute:

Click on chart to see a larger view.

Down/Up (Up/Down USD) right on that weekly range top that has been acting as resistance for basically 12 months now.

We spoke Friday about a muted reaction in USD the more likely scenario because if NFP was positive or not, it was likely to never be enough for the market to get excited.

That print was about as good as it could possibly get and price is back where it started again already.

The market is certainly showing a lot of belief in Yellen’s rhetoric!

———-

Chart of the Day:
Lastly for your Monday morning, Republican presidential front-runner Donald Trump has spoken to the Washington Post and predicted that the United States is on course for a “very massive recession”.

“I think we’re sitting on an economic bubble. A financial bubble.”

Although the comments were as vague as you’d expect from a politician, unemployment and ‘overvalued’ stocks were cited by the big man.

“It’s a terrible time right now to invest in the stock market.”

S&P500 Weekly:

Click on chart to see a larger view.

I can see politically why he’s saying what he’s saying, but looking at that S&P 500 weekly chart, there’s not many places you could have bought and currently be in a losing position!

———

On the Calendar Monday:
AUD Building Approvals m/m
AUD Retail Sales m/m

GBP Construction PMI

Do you see opportunity trading FX 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 Vantage FX, Forex broker 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 Australian 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]

Eyes on the RBA: AUD/USD and AUD/JPY Levels
April 5, 2016Dane Williams


Image: Fox Sports

Eyes on the RBA: AUD/USD and AUD/JPY Levels
The eyes of the Forex world shift across to the local scene here in Australia today, with the latest RBA rates decision the highlight on the economic calendar.

While today’s decision isn’t expected to deliver a cut, looking at the guidance for next meeting is where the price action will come from.

If we remember back a couple of weeks ago in this morning blog, we spoke about Australian Prime Minister Turnbull throwing a spanner into the works of the AUD/USD trading machine:

“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.”

“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.”

What I didn’t speak about however, was that the next RBA rate decision in May actually falls on the day the Australian Federal Budget is released.

My thinking would be that again, the RBA’s track record says that they are much more likely to sit on their hands come May, but the economist survey actually goes from a unanimous ‘hold’ decision today, to a 25% cut in May. Do you follow the smartest guys in the room, or do you avoid them…?

AUD/USD 4 Hourly:

Click on chart to see a larger view.

The 4 hourly is approaching the bottom of a lower time frame bullish channel. I like this because the red horizontal support/resistance level that just happens to line up with the bottom of the channel is a weekly level here:

AUD/USD Weekly:

Click on chart to see a larger view.

Price has chopped through it both up and down recently on the lower time frame which weakens the level, but it is a noticeable level of confluence which could very well come into play today/

———-

Chart of the Day:
These Aussie feature blogs seem to always have AUD/JPY as my go to ‘alternate’ currency pair and the trend continues today. The trend is your friend, as they do say!

AUD/JPY Daily:

Click on chart to see a larger view.

The daily shows a huge bearish channel which is pretty self explanatory.

AUD/JPY 4 Hourly:

Click on chart to see a larger view.

Within that channel we have a couple of lower time frame, bullish levels to manage our risk around. This is where you need to make a trading decision. Do you fade into the short term level, or do you play for an early breakout lower, banking that the higher time frame resistance level that price has come out of on the daily chart above is the main one.

Let us know on the @VantageFX Twitter heading into the RBA decision? It is #TuesdayFX afterall!

———

On the Calendar Tuesday:
AUD Trade Balance
AUD Cash Rate
AUD RBA Rate Statement

GBP Services PMI

CAD Trade Balance
USD ISM Non-Manufacturing PMI
NZD GDT Price Index

**BREAKING** RBA KEEPS RATES ON HOLD AT 2.00% AS EXPECTED*** : Follow @VantageFX on Twitter and download the News Terminal to keep up to date.



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

Dane Williams – @VantageFX

Risk Disclosure: In addition to the website disclaimer below, the material on this page prepared by Forex broker 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 Australian 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]

USD/JPY Enters Beast Mode
April 6, 2016Dane Williams


Image: Zoom Comics

USD/JPY Enters Beast Mode
The Japanese Yen hit it’s highest levels against the US Dollar in well over a year overnight. Something which obviously won’t be impressing the Bank of Japan and friend of Forex traders everywhere, Haruhiko Kuroda.

The man’s smile pose just works perfectly for the featured image on these articles, just look at the man. Oh wait, that’s not him!

Back to business and the runaway strength of the Yen. With the BoJ needing the weaker currency to boost stubbornly low inflation that just seems to be unmovable no matter what they do, this isn’t going down well. QE stimulus, even negative interest rates, just nothing is working for them and the constant comments that hit the newswires day after day have certainly lost their bang.











Yawn.

With risk-off the overriding theme throughout the day, the 110.000 level in USD/JPY was touched. The level is HUGELY significant because not only is it the psychological go-to level, but made even more significant by the fact that the BoJ was thought to have been testing the intervention waters at 111.000 as you can see from the spikes on the daily chart below.

Now price is 100 pips below that level… This is it.

USD/JPY Daily:

Click on chart to see a larger view.

Does it even matter whether they intervene here? Price is simply going to get slapped back down again. So the question now becomes, has the BoJ learned you can’t fight the market.

Or can it…?

Send us a Tweet @VantageFX and let us know your thoughts.

———-

Chart of the Day:
Yesterday we featured AUD/JPY and once again it was the higher time frame resistance level that won out over short term support. I encourage you to go back over your charts and look at the amount of times you have the choice between trading a short term level against what the larger time frame charts are telling you, and to see what would have happened. Higher time frames are king!

In today’s chart of the day, lets just look at how we can go about trading this Yen strength that we’ve spoken about throughout the blog.

USD/JPY 15 Minute:

Click on chart to see a larger view.

Remember to be thinking within the context of the higher time frame charts above, but here’s the 15 minute chart. We have a bearish channel drawn in from the most obvious tops and see that price is now approaching resistance. Resistance that also happens to line up with previously broken support which could turn resistance.

The channel is going to be subjective because it’s on the 15 minute chart, but the bearish trend can’t be subjective and that’s what you’re looking to take advantage of here.

I know there is some market consensus that because price couldn’t hold below the 110.000 level, that it is now bullish. I don’t agree with that at all. As a USD/JPY bear, I really like the price action we are seeing now. To me, price testing the 110.000 and getting this bounce is a healthy move that means if the break comes, it will be much easier to sustain.

Now we wait. Intervention or a break of support?

———

On the Calendar Wednesday:
CNY Caixin Services PMI
AUD RBA Assist Gov Kent Speaks

USD Crude Oil Inventories
USD FOMC Meeting Minutes

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

Dane Williams – @VantageFX

Risk Disclosure: In addition to the website disclaimer below, the material on this page prepared by 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 ASIC 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]

Like a Red Rag to USD Bulls
April 7, 2016Dane Williams


Image: New Yorker

Like a Red Rag to USD Bulls
Sorry US Dollar bulls. Yesterday just wasn’t the day that it turns around for you. Yet…

The early morning Sydney time release of the FOMC Meeting Minutes has printed headlines galore around the ‘no hike in April’ theme, but that’s not to say it was a unanimous decision. Hikes were definitely discussed with the old data dependent line being whipped out once again:

“If the incoming economic data remained consistent with their expectations for moderate growth in output, further strengthening of the labor market, and inflation rising to 2% over the medium term.”

Read the full release from the FOMC here and excellent fundamental analysis from the WSJ’s Hilsenrath here (Hint: Copy paste headline into Google News).

Now from a trader’s perspective, taking in those fundamental take-aways above and with the USD continuing to drop from already low levels, in which direction lies the greatest risk? By determining this, you can try to take advantage of the big moves when the market is forced to re-price if the fundamental surprise.

For me, I still can’t help but think that the greater risk is to the upside in USD. Sure this completely rules out April, but the chatter about the next hike is getting stronger and price will have to start to price this in soon enough. If you think that price is overstretched, then you can try to take advantage of this in your trading.

Let’s take a look at some of the majors charts to see where price is sitting:

EUR/USD Daily:

Click on chart to see a larger view.

AUD/USD Daily:

Click on chart to see a larger view.

So in looking for the possibility of taking advantage of USD strength to come, we would want to see the majors sitting at resistance. …And look at that! We can see that price is sitting at resistance on both the EUR/USD and AUD/USD daily charts.

Of course this isn’t a blind sell. The levels I’m highlighting are 150 and 300 pip zones afterall. But what I’m trying to bring attention to is that the technicals also support the fact that USD weakness could be a little overcooked.

The Fed next meets on April 26-27 which is about two and a half weeks from today.

Enjoy!

———-

Chart of the Day:
The FOMC Minutes also coincided with the 110 level in USD/JPY failing.

USD/JPY 15 Minute:

Click on chart to see a larger view.

“But it was meant to go up…”

I’m pretty sure the graphic design department at Vantage FX is safe…

———

On the Calendar Thursday:
JPY BOJ Gov Kuroda Speaks

USD Unemployment Claims
EUR ECB President Draghi Speaks

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

Risk-Off and a USD/CAD Trading Scenario
April 8, 2016Dane Williams


Image: Erick on the Radio

Risk-Off and a USD/CAD Trading Scenario:
Yet another bout of risk aversion during yesterday’s trading session saw USD/JPY continue its downward spiral, as well as the S&P 500’s amazing bullish run back to swing highs come to a halt.

Risk…




We have a fairly quiet trading day ahead to end the week, with the only tier one release being Canadian employment data. As always, you can read a full preview on the News Terminalwhich is, and will continue to stay free for all Vantage FX clients. With the quiet, lets take advantage of it and use the time to take a look at the Loonie.

USD/CAD isn’t a chart we’ve looked at for a while and flicking through my MT4 watch-list (which I still haven’t cleaned up by the way…), I see this absolute GEM of setup.

USD/CAD Daily:

Click on chart to see a larger view.

The most important part of the daily chart is the massive bullish trend that USD/CAD has been in since 2014, when that specific trend line started and even as far back as 2011 when the low came in.

Yes, I know that recently price has fallen 1700 pips in a straight line but it’s a massive bullish trend and in the context of the higher time frame charts, this really is just a healthy pull-back to support.

Support that you can see was touched basically to the pip!

USD/CAD Hourly:

Click on chart to see a larger view.

Zooming into the hourly, I put this here only as a hindsight trade to highlight taking entries on the lower time frame charts, in the context of a higher time frame bias.

1. The touch into higher time frame support + trend line confluence.
2. Break of the nearest swing high.
3, 4, 5. Re-test of this previous resistance level now turned support – Your entry level.

Did any of you trade this USD/CAD setup? Handle it differently? Share your setup by mentioning@VantageFX on Twitter

———-

Chart of the Day:
One for the Commodities traders on our book with a look at Oil.

OIL Daily:

Click on chart to see a larger view.

Just before we broke for Easter, I posted a blog featuring the Oil daily chart with a 200 SMAdrawn in blue. As some of you filling up your cars with amazingly cheap petrol have surely noticed, dynamic resistance held for the third time and the price of Oil has come back down.

This push back down saw price break the 37.80 resistance level and with price re-testing it again from the underside, opportunity could be there to sell this short term strength?

———

On the Calendar Friday:
GBP Manufacturing Production m/m

CAD Employment Change
CAD Unemployment Rate

Do you see opportunity trading OIL with Vantage 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 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 Australian 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]

Weekly Risk Watch
April 11, 2016Dane Williams


Image: OC Register

Weekly Risk Watch:
Oil comes to the front of both Forex and Commodities traders watch lists this week as the world’s major producers both within and outside OPEC come together in Doha, Qatar.

The talks are a follow up talk on the current production freeze and encompass a wider range of non-OPEC nations. The discussion will centre around how long the production freeze will last as well as whether the $50 per barrel price target for Oil can be reached.

OIL Daily:

Click on chart to see a larger view.

Last Friday’s Oil chart of the day highlighted price still below the 200 SMA but price has since chopped through previous support turned resistance without so much as a pause and is back testing the level.

Everything I have seen in the press to start the week has been positive, obviously reflected in the recent rally that we see here in Oil. This week’s trading is however going to be almost exclusively driven by headlines, something which is never a good thing for the clean, consistent moves that are easy to trade. Beware.

Moving onto Forex markets and we had some interesting comments out of Europe on the weekend as the Bank of France president Villeroy de Galhau, commented on the power of the ECB.

“The ECB is not short on ammunition.”

“What is lacking terribly is the second pillar, a major coordination of economic policy. For this reason, I also propose the appointment of a European minister of finance.”

Give power to a centralised body? This is the sort of chat that will push Britain closer to leaving the Euro… Exactly the type of thing that the ‘leave’ campaign will latch onto and use as a slogan.

GBP/USD Daily:

Click on chart to see a larger view.

There is still room to fall back toward the bigger bearish channel support on the daily.

GBP/USD 4 Hour:

Click on chart to see a larger view.

This 4 hourly support level just looks primed for a hard drop below after that many touches.

Enjoy your Monday!

———-

Chart of the Day:
Everyone is still on intervention watch from the Bank of Japan as the Yen hovers close to its lows from last week.

Something different I wanted to highlight was where the beast, GBP/JPY, was sitting on the weekly chart.

GBP/JPY Weekly:

Click on chart to see a larger view.

As you can see, if you draw up some fibs from the start of the trend line we had previously been watching, price is right on the 61.8% fib retracement.

With the momentum and fundamentals behind the move, I’m NOT suggesting to blindly fade the level, but it is interesting none-the-less.

———

On the Calendar Monday:
AUD Home Loans m/m
CNY CPI y/y
CNY PPI y/y

USD Fed Announcement

A couple of second and third tier data releases during today’s Asian session, so nothing to get too worked up about if you are entering some new positions early in the week.

Later tonight see’s one of the Fed’s ‘unscheduled statements’, discussing the discount rates to be charged by the various Federal Reserve Banks.

Do you see opportunity trading Forex and Commodities with Vantage 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 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 Australian 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]

Oil Rumours Helping the CAD: A Look at OIL and USD/CAD
April 12, 2016Dane Williams


Image: Playbuzz

Oil Rumours Helping the CAD: A Look at OIL and USD/CAD:
The US Dollar was generally weaker across the board, while the Pound powered forward alongside the Aussie Dollar which also benefited from an up-tick in commodity prices.

With another quiet one in terms of economic data released, we stay focused on the impact of the impending weekend meetings between Oil producing nations in Doha.

With Oil sitting just above the important, psychological $40 per barrel level, it’s still the 200 SMA that is capping price.

Price really went nowhere yesterday in thin, data-less trade. I’m a little surprised by this, and still expect some headline driven volatility as we head into the weekend’s meetings said to focus on the production freeze and $50 per barrel sustainable price target for producers.

OIL Daily:

Click on chart to see a larger view.

Now we’re here, price has to poke its head above the line, doesn’t it…? It’s just one of those seemingly magically magnetic levels that price could be sucked up into ‘just to see what happens’.

OIL Hourly:

Click on chart to see a larger view.

Zoom into the hourly and the top red line is where the 200 SMA comes in on the daily. Price has tested the level once yesterday, and price is still trapped inside a little inside bar formation.

Coiling up for a breakout?

———-

Chart of the Day:
When we look at Oil, it’s always wise to then flick over to the USD/CAD chart.

We took a look at a USD/CAD trading scenario in last Friday’s Daily Market Update and today’s chart of the day section is a little follow up on what the level is now doing.

USD/CAD Hourly:

Click on chart to see a larger view.

I’ve left the red line we were talking about managing our risk around last week on this chart and as you can see, the level again saw price react. This time however, on the opposite side as resistance rather than support.

The blue trend line is drawn off the weekly chart, which makes any break on the lower time frame, much less convincing. I like referring back to this AUD/USD weekly trend line post which highlights the subjectivity of longer term trend lines on the lower time frames, as it’s an important concept to grasp if you’re watching these major levels.

USD/CAD Daily:

Click on chart to see a larger view.

Zoom out to the daily chart and you can see the longer term trend line in question much clearer.

Really thought, it’s all about that horizontal support/resistance level which price has reacted off in both directions.

All eyes stay on the correlation between the CAD and OIL heading into this weekend’sproduction freeze talks in Doha between major Oil producing nations.

———

On the Calendar Tuesday:
AUD NAB Business Confidence

GBP CPI y/y
GBP PPI Input m/m
GBP RPI y/y

USD Import Prices m/m

Only the single tier one release on today’s economic calendar, that being GBP inflation numbers. Business confidence out of Australia normally receives a muted reaction from markets and the import prices out of the US are the only notable release from then on, throughout the entire evening session.

Do you see opportunity trading Forex with Vantage 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 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 Australian 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]

Commodities Soaring. Have They Gone too Far?
April 13, 2016Dane Williams


Image: WSJ

Commodities Soaring. Have They Gone too Far?:
Slightly removed from the retail Forex trading world, but majorly important for the price of the Aussie Dollar, iron ore rallied nearly 5% at its latest price fix and is now attempting to test the $US60 handle. Along with the price of oil and US Dollar weakness across the board, we’ve seen the Aussie still reaching for new highs again as I’m writing this sentence.

AUD/USD Daily:

Click on chart to see a larger view.

The daily view is important because it shows price at the top of a zone which has previously acted as support in the past, as well as showing a shorter term channel that we are still moving between.

Because of this channel, we could easily push through the horizontal zone without a problem which clouds trading opportunities.

OIL Daily:

Click on chart to see a larger view.

As for Oil, it’s still all about this weekend’s meetings and the perceived outlook that we are going to get a positive outcome. Even with the Saudi/Iran rift, it is Russia who has been the most vocal saying that they are most confident that a deal can be reached. How can you take anything from that…?

Iran of course doesn’t want to allow their neighbour an advantage following their re-admission back into the world trading fold and are therefore reluctant to cut supply. Russia has it’s own vested interest in the price of oil and of course are going to say whatever they can to get a reaction.

I might sound like a broken record talking about Oil this week, but I really do see it as an excellent trading opportunity. Anyone reading this blog knows that I like to look for trading opportunities where market expectation has a chance to disappoint, and who better to rely on for market disappointment than Saudi Arabia and Iran talking Oil!

No matter how I look at it, I just can’t see any sort of positive surprise from the talks. The Oil market has essentially set itself up to be disappointed no matter the outcome. If talks go smoothly, then it has been priced in. If one falters then we would see another re-pricing back down. And this could be major. There is over 1000 pips back to re-test the broken bearish trend line on that Oil daily chart after all!

Finally, I wanted to include a headline that I came across during my morning’s reading (with where it came from omitted).






‘Hope’.

That headline sums it all up for me.

———-

Chart of the Day:
The dynamic of the AUD/JPY cross right now is an interesting one, with commodity price strength and a higher yield seeing the Aussie Dollar well supported, while at the same time the headlines out of Japan that we’re all aware of, has seen the Yen equally as strong.

AUD/JPY 4 Hourly:

Click on chart to see a larger view.

The bottom, dashed trend line is simply a parallel drawn from the above line that has been touched 3 times. While there wasn’t even a 2nd touch of the bottom line, the fact that the re-test saw the level act as resistance makes me want to leave it there. In any case, the horizontal level is a huge support/resistance zone that price has reacted out of on multiple occasions.

With the momentum behind this almost immediate re-test of the horizontal zone, and the 25 pip or so gap between the horizontal level and the channel bottom, I just get the feeling that this isn’t going to hold.

Is there a play here for price to break higher?

———

On the Calendar Wednesday:
CNY Trade Balance

USD Core Retail Sales m/m
USD PPI m/m
USD Retail Sales m/m
CAD BOC Monetary Policy Report
CAD BOC Rate Statement
CAD Overnight Rate
USD Crude Oil Inventories
CAD BOC Press Conference

We’ve used the term ‘data deluge’ a little too wishy washy in the past, but THIS is what you call a deluge. Each of those data releases we have listed during the US session above are tier one.

If you were ever going to get on board and use the News Terminal in your trading, then this is the time. Good luck!

Do you see opportunity trading Commodities 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 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 Australian 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]

BoE Tonight: Cable Charts and China Bulls Exhale
April 14, 2016Dane Williams

Image: Rydal Penrhos School

BoE Tonight: Cable Charts and China Bulls Exhale:
Attention shifts to the UK tonight, with the Bank of England’s interest rate decision the stand-out event of the day. Well we actually get the bank rate decision, a monetary policy summary and the votes showing how the MPC members voted!

Members are expected to vote unanimously to keep interest rates on hold at the current level of 0.5%, exactly the same as last month. Last month was the first vote in a while where the decision among voting members was unanimous, with the previously sole dissenter Ian McCafferty changing his vote to hike and instead siding with the crowd.

With inflation stubbornly low and the risk of Brexit clouding economic certainty, the BoE is in no rush to move any time soon and a bearish looking GBP/USD daily chart reflects this fact.

GBP/USD Daily:

Click on chart to see a larger view.

We took a quick look at Cable during Monday’s Weekly Risk Watch post and the short term level we were watching has stayed intact.

GBP/USD 4 Hourly:

Click on chart to see a larger view.

I still think that level is just asking to be broken after the amount of touches we’ve seen, but as we say as traders, we have to say “it’s support until it’s not”. With price now sitting in a little bit of no man’s land heading in to BoE tonight. A clear sign of market uncertainty.

Moving forward and after the trade balance was released, we saw stocks enjoy the confidence that a good Chinese data print gives.

An injection of central bank infused credit is seemingly doing its job with both imports and exports beating their expected numbers by a wide margin.






Whether the doom and gloom outlook for the Chinese economy was misplaced isn’t something any economist can answer with certainty, but on the surface that print will go a long way to allowing the bulls to exhale the deep breath they have been holding.

We’re obviously all watching the Aussie Dollar, but…

———-

Chart of the Day:
Another market in which you can try to take advantage of strength or weakness in the Chinese economy is the CHINA 50. Already one of the more popular markets amongst Indices traders on the Vantage FX book, we take a look at what the above news could mean for the charts.

CHINA50 Daily:

Click on chart to see a larger view.

It’s really hard to grab a clear trend off this chart, but as most of technical analysis is a self fulfilling prophecy, I’ve gone with the most obvious. To me that’s a bearish trend, simply because the lower highs are steeper than the higher lows. It doesn’t have to be scientific, it just has to be obvious.

Within that bearish trend, you can see that while price rallied to test the trend line, it formed what looks something like a short term flag pattern. Yes it’s broken out of the trend line, but it’s still an obvious bearish trend. Getting carried away with breakouts within long term trends is always fraught with danger.

CHINA50 4 Hourly:

Click on chart to see a larger view.

Zooming into the 4 hour chart and we have some horizontal resistance in play. Remembering that we’re still in the midst of a longer term bearish trend, this level will be hugely significant in seeing just how strong the market is.

This is your level to manage your risk around.

———

On the Calendar Thursday:
AUD Employment Change
AUD Unemployment Rate

GBP MPC Official Bank Rate Votes
GBP Monetary Policy Summary
GBP Official Bank Rate

USD CPI m/m
USD Core CPI m/m
USD Unemployment Claims

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

Dane Williams – @VantageFX

Risk Disclosure: In addition to the website disclaimer below, the material on this page prepared by 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 Australian Forex Broker Vantage FX on the MT4 charts, 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.