Vantage FX Daily Market Update

[Vantage FX]

GDP Beat Re-Prices Chance of Fed Hike
February 29, 2016Dane Williams


Image: SponsoredLinX

GDP Beat Re-Prices Chance of Fed Hike:

“USD Prelim GDP q/q “1.0% v 0.4% expected)”

The US economy expanded in Q4 2015, giving USD bulls reason to be optimistic on the overall health of the economy.

Gross Domestic product printed a 1% annualised growth rate compared with the 0.4% expected, sending the Dollar rallying as the Fed comes back into play for 2016.

With further rate increases being all but written off after the horrible start to the calendar year, the GDP print removes the talk of recession and points to a continued rebound.






Chart: CNBC

The above CNBC chart shows the data from a visual viewpoint and while it is certainly contracting, it’s not as bad as what has been priced in. It’s this ‘not as bad as it could have been’ point that markets are lapping up at least for the short term.

– Inventories +$81.7 billion annualised rate.
– Growth -0.14% (-0.45% previous).
– Trade gap -0.25% (-0.47%).
– Household consumption +2% annualised rate (2.2% previous) – This is a huge part of the economy.

The summarised numbers above all point to the Fed being back in play this year. Each new piece of data causes the probability of a hike to swing wildly and it’s this perception that traders can take advantage of as Forex markets price and re-price one month to the next.

The probability of a June hike rose to 35% from 24% last week, while a December hike jumped above the magic 50% level to 53% from 36% last week. Crazy.

EUR/USD 15 Minute:

Click on chart to see a larger view.

After Friday’s huge fall in EUR/USD on the data release, we open with a nice gap and an opportunity to fill.

EDIT: Price of course filled the gap before I hit publish on the blog. Kudos to those that jumped on board!

———-

Chart of the Day:
The fact that USD/CAD hasn’t managed any sort of a bounce throughout last week’s US GDP number highlights the short-term weakness in the pair. Of course I say short term as even a further 600 pip pull-back will still see the pair correct healthily to the weekly bullish trend line and still remain bullish overall.

USD/CAD Daily:

Click on chart to see a larger view.

Today’s chart of the day sees price return to marked previous resistance with the potential to this time act as support. With stops lurking below the obvious level, some of the pair’s weakness in the face of broader USD strength is surely due to the stops lurking below this level and the market wanting to take them out before bouncing.

———

On the Calendar Monday:
JPY Retail Sales y/y
NZD ANZ Business Confidence

EUR German Retail Sales m/m

USD Chicago PMI
USD Pending Home Sales m/m

A whole raft of second and third tier data on the economic calendar today. With the juicy data to come later in the week, not much is expected around today’s numbers but something to be aware of nonetheless.

Do you see opportunity trading USD/CAD? 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 →

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[Vantage FX]

The Market Doesn’t Care if You’re Right or Wrong
March 2, 2016Dane Williams


Image: Prime Shine Mobile Car Wash

The Market Doesn’t Care if You’re Right or Wrong:




A ‘risk-on’ tone swept through markets yesterday, with both equities and commodities both higher. This followed better than expected US manufacturing data and continued to alleviate fears that the Fed will not be thrown off course.

The biggest shock though, and something worth looking at from a trading point of view, was the Aussie Dollar’s strength in the face of quite simply HORRIBLE manufacturing numbers out of China!

AUD/USD 4 Hourly:

Click on chart to see a larger view.

The RBA leaving rates on hold for another month obviously had an effect on the currency, but the Chinese number was the lowest reading since 2011!

There is some serious strength in the Aussie right now which should add to your conviction when playing from the long side. The levels are there on your charts, now trade them.

———-

Chart of the Day:
Yesterday before publishing the morning blog, we had a little motivational sharing spree on Twitter:

“The analyst who talks about his mistakes is the guy you want to listen to. Avoid the guy who doesn’t — his are much bigger.”

With today’s USD/CHF chart catching my eye in a morning scan of our MT4 platform, it wouldn’t be right if I didn’t bring back this technical analysis blog post: Swissy Back to Pre-SNB Floor Level.

Long USD/CHF was a sure thing!

Oh.

USD/CHF Daily:

Click on chart to see a larger view.

So… How’s that washing cars thing going?

USD/CHF 4 Hourly:

Click on chart to see a larger view.

With price having now broken the major bullish trend line, yesterday saw price re-test the underside of the level (TO THE PIP), this time as possible resistance.

The market doesn’t care if you’re right or wrong. Be humble.

———

On the Calendar Wednesday:
AUD GDP q/q

GBP Construction PMI

USD ADP Non-Farm Employment Change
USD Crude Oil Inventories

Do you see opportunity FX trading? 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 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 a Forex live account 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]

Aussie Aloof
March 3, 2016Dane Williams


Image: Sky News

Aussie Aloof:

“AUD GDP q/q: +0.6% v +0.5% expected and +1.1% previously (revised).”

And with that, the Australian economy has officially come aloof from the rest of the world.

Defying economic struggles and uncertainty worldwide, Wednesday’s Australian GDP again printed a stronger than expected +0.6%.

This print will no doubt be a huge relief for the Reserve Bank of Australia who are notorious for their ‘wait and see, ride it out’ approach to monetary policy.

According to Bloomberg swaps data, the probability that the RBA will cut in May has now dropped from 55% to 43%. Unreal turnaround from an almost entirely priced in cut and this is being reflected in the AUD/USD charts:

AUD/USD Weekly:

Click on chart to see a larger view.

The AUD/USD weekly chart shows the huge support zone that price has come down into and bounced from.

AUD/USD 4 Hour:

Click on chart to see a larger view.

Over on the @VantageFX Twitter account, we’ve been looking for a break-out of short term resistance on the 4 hour chart. The market just doesn’t like ‘clean’ levels and once price got some momentum behind it, the level was always going to go.

The Australian economy simply just continues to do what it shouldn’t. In the face of consistently low commodities prices to end 2015, the export dependent Australian economy still managed to grow. With iron ore and other tradable commodities seeing a short term injection of demand recently, everything is just coming together at once for the Aussie Dollar which after cracking short term resistance, has gone vertical.

———-

Chart of the Day:
With today’s Australiana theme, we will also give the SPI200 Indices market some deserving attention.

SPI 200 Daily:

Click on chart to see a larger view.

First up the daily chart showing a short term bearish trend line breaking out. Price hasn’t printed a higher high or broken out of the marked horizontal support/resistance level that has caused a reaction multiple times in the past, but the lower high (and inverse head and shoulders if you’re really keen!) is promising for a further push to the upside.

SPI 200 Weekly:

Click on chart to see a larger view.

The weekly adds to the bullish bias as well, with price moving up off major weekly trend line support in what looks like a textbook flag pattern back to the trend before a push higher.

Always tell yourself that support holds until it doesn’t. Trade the levels that are in front of you.

———

On the Calendar Thursday:
AUD Trade Balance
CNY Caixin Services PMI

GBP Services PMI

USD Unemployment Claims
USD ISM Non-Manufacturing PMI

Finally, be sure to check out Vantage FX guest analyst, Oscar Goullet’s Head & Shoulders Trade Diary!

“Over the next 4 weeks I’ll be demo trading a Head & Shoulders Forex strategy on a Vantage FX RAW ECN account and providing regular updates.”



Stay safe out there!

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 Forex 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 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]

Cable Gains Technical Relief and a Look at Natural Gas
March 4, 2016Dane Williams


Image: British Gas

Cable Gains Technical Relief and a Look at Natural Gas:

“GBP Services PMI (52.7 v 55.1 expected)”

Despite a weaker than expected UK Services PMI reading, GBP/USD printed a fourth consecutive bullish daily candle. We haven’t seen Cable go on a bullish run like this for a long time and while it is being attributed to over exaggerated Brexit fears, the move is still in fact just a corrective bounce off support in a long term bear market.

GBP/USD Daily:

Click on chart to see a larger view.








We have been talking about this level on the @VantageFX Twitter account over the last week, so if you were on board then please leave us a comment! Identify your levels and manage your risk around them.

Remember that we have Non Farm Payrolls tonight amidst a broadly weak USD environment. With the Fed not expected to move during March, the greater risk is still to the downside for USD. Any weakness will be seen as confirmation and the USD will sell off, while a beat probably wont be enough to change the market’s views.

———-

Chart of the Day:
Following an up-tick in trading volumes worldwide, Vantage FX is proud to announce an expansion to the Commodities markets that clients can trade.

In increasingly challenging market conditions, the addition of FOUR new markets give Vantage FX traders the ability to further diversify their exposure to commodities. All new markets are immediately available to chart and trade on the Vantage FX MT4 Platform.

Today’s chart of the day features one of our new markets in Natural Gas (NG):

“Natural gas is a naturally occurring mixture which is primarily used as a fossil fuel. It is used as a source of energy for cooking and the generation of electricity.”

Natural Gas 4 Hour:

Click on chart to see a larger view.

The 4 hour chart shows Natural Gas at the bottom of a bearish channel. The previous swing low has been marked here as price now flirts on either side of the level, providing opportunity in both directions.

Natural Gas 15 Minute:

Click on chart to see a larger view.

Zooming into the 15 minute chart and you can see the break down and re-test more clearly. While price didn’t quite touch the level again, the massive long wicked doji on top of resistance is a hugely bearish signal.

Check out the rest of the new Commodities available to trade through Vantage FX on our MT4 platform.

———

On the Calendar Friday:
AUD Retail Sales m/m

CAD Trade Balance
USD Average Hourly Earnings m/m
USD Non-Farm Employment Change
USD Unemployment Rate

Do you see opportunity trading Natural Gas? Take advantage on your own instant $50,000 Forexdemo account.

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, low spreads 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]

NFP Clouds Fed Direction
March 7, 2016Dane Williams


Image: Oregon Live

NFP Clouds Fed Direction:

“USD Non-Farm Employment Change (242K v 195K expected)”

“USD Unemployment Rate (4.9% v 4.9% expected)”

“USD Average Hourly Earnings m/m (-0.1% v 0.2% expected)”

Even amidst a huge jobs number beat of expectations (plus upward revisions!), the USD was still seen on struggle street.

Non-farm payrolls smashed expectations of 195K with an excellent headline print of 242K jobs created, continuing the recent trend of beating expectations month after month. Meanwhile, the unemployment rate also printed green, holding steady at 4.9%.

How about for the traders? Heading into the release on Friday, we discussed some of our NFP thoughts as follows:

“Remember that we have Non Farm Payrolls tonight amidst a broadly weak USD environment. With the Fed not expected to move during March, the greater risk is still to the downside for USD. Any weakness will be seen as confirmation and the USD will sell off, while a beat probably wont be enough to change the market’s views.”

EUR/USD 15 Minute:

Click on chart to see a larger view.

As you can see on the EUR/USD 15 minute chart, even with the NFP headline beat, the market instead chose to focus on the underwhelming average hourly earnings number and we got USD weakness.

This focus comes from the Fed being dependent on increased inflation to make their next interest rate hike and this cut in wages isn’t going to be enough to tick inflation into their target band.

The Fed will gather for their next two day meeting on March 15, one week from now.

———-

Chart of the Day:
With the above EUR/USD 15 minute chart, we have to take a step back to see where price sits on the higher time frame for some context.

EUR/USD Daily:

Click on chart to see a larger view.

On the daily, we can see the bearish trend line resistance that price has broken out of and since re-tested this time as support. Coincidently, this level lined up exactly with the 61.8% fib drawn off the two most recent swings.

So often these breakouts and re-test levels fail to break long term trends and we see consolidation or a continuation in the original direction of the trend. However, the fundamental driver of an interest rate hike re-pricing in USD, could mean this time that the pattern holds and EUR/USD continues higher.

———

On the Calendar Monday:
AUD AIG Construction Index
AUD ANZ Job Advertisements m/m
JPY BOJ Gov Kuroda Speaks

EUR Eurogroup Meetings

Do you see opportunity trading EUR/USD into the next Fed meeting? 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 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 using Forex leverage 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]

Temporary Halt at Resistance
March 9, 2016Dane Williams


Image: IPS News

Temporary Halt at Resistance:
Major markets temporarily halted their runaway tear overnight. I say temporarily because for all the headlines that have been written today, all I see is price hitting a major resistance level and experiencing a rejection at first touch.

“CNY Trade Balance (210B v 339B expected)”

The major fundamental theme from yesterday was the miss in the Chinese trade balance number. It not so much renewed global growth concerns as they’ve always been lingering, but at least brought them back to the fore. Seasonality can be blamed here to some extent, so markets at least have an excuse if they want to take it.

As expected during times of uncertainty, the best performing currency overnight was the Japanese Yen. Turning to the charts, we’ve gone for EUR/JPY:

EUR/JPY Daily:

Click on chart to see a larger view.

We went the EUR/JPY rather than USD/JPY just for the fact that the turn down in the pair coincides with a push up into resistance. This is definitely a nice, obvious level to use in your trading.

Speaking of levels to use in your trading…

———-

Chart of the Day:
CHART UPDATE from yesterday’s Extraordinary European Expectations blog:

OIL Daily:

Click on chart to see a larger view.

S&P 500 Daily:

Click on chart to see a larger view.

In yesterday’s daily market update blog, we talked about both the recently correlated oil and US stock charts both sitting at resistance.

Both markets completed perfect technical rejections off clear resistance levels. If you’remanaging your risk around major levels correctly, you will always be okay.








———

On the Calendar Wednesday:
AUD Westpac Consumer Sentiment
AUD Home Loans m/m

GBP Manufacturing Production m/m

CAD BOC Rate Statement
CAD Overnight Rate
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 Vantage FX Pty Ltd does not contain a record of our Desktop or MT4 WebTrader prices or solicitation to trade Indices. 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]

Kiwis Kut and a Look at Trading Expectations
March 10, 2016Dane Williams


Image: Panee Calcio

Kiwi’s Kut and a Look at Trading Expectations:
Bucking economists’ expectations, the Reserve Bank of New Zealand stunned Forex markets this morning by cutting their overnight cash rate by 0.25% from 2.50% to 2.25%.

Of course when things don’t go to expectation, you get huge moves in Forex markets, and that’s exactly what we saw in the Kiwi today!

NZD/USD Hourly:

Click on chart to see a larger view.

“The trade-weighted exchange rate is more than 4 percent higher than projected in December, and a decline would be appropriate given the weakness in export prices.”

The RBNZ went on to cite concerns around economic growth (read concerns around China), inflation and the domestically important dairy industry as reasons behind the shock move and has continued to operate under a firm easing bias, noting the following key extract from the statement that you can read in full by clicking the link above.

“Further policy easing may be required to ensure that future average inflation settles near the middle of the target range. We will continue to watch closely the emerging flow of economic data.”

Across the ditch, their Australian counterparts at the Reserve Bank of Australia are (at least publicly) not as concerned about China as the RBA continues to sit tight and the Aussie Dollar continues to break new highs.

In an environment of both weaker commodity prices and further cuts surely to come, the fact that AUD/USD is performing so well can be put down to yield. With the rest of the world in a race to the bottom, of course Australia is going to attract some attention.

AUD/USD Hourly:

Click on chart to see a larger view.

With the European Central Bank meeting tonight and expected to add to its stimulus package, there is definite opportunity in AUD/USD heading forward!

———-

Chart of the Day:
Speaking of tonight’s ECB meeting, let’s have a look at some more charts. In Tuesday’s blog we looked at some of the Euro expectations that markets might have heading into the meeting, so keep this in mind while reading today’s post.

EUR/USD Daily:

Click on chart to see a larger view.

When it comes to these sorts of decisions, you should always be asking yourself in which direction the greatest risk lies?

With the retail market overweight short, backing up 99% of economist expectations that Draghi will deliver in stimulus, to me that risk lays to the upside in EUR/USD. Just look at this morning’s RBNZ decision for an example of markets being too expectant of an outcome and getting a huge re-pricing when things don’t go to plan.

We’d love to hear your thoughts on how you see the market positioned heading into the ECB decision, so give @VantageFX a mention on Twitter!

———

On the Calendar Thursday:
NZD Official Cash Rate
NZD RBNZ Rate Statement
NZD RBNZ Press Conference
NZD RBNZ Gov Wheeler Speaks
CNY CPI y/y

EUR Minimum Bid Rate

EUR ECB Press Conference
USD Unemployment Claims

Do you see opportunity trading market expectations? 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 Desktop or MT4 App prices or solicitation to trade Commodities. 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]

Mario Draghi: Eaten by the Wolf
March 11, 2016Dane Williams


Image: KoopaKrazy85 on DeviantArt

Mario Draghi: Eaten by the Wolf:
SPOILER ALERT. That is how the boy who cried wolf fairytale ends. In the ECB’s case, with a 400 pip, rip your face off rally!

EUR/USD 15 Minute:

Click on chart to see a larger view.

The biggest single day rally since the last cut in the deposit rate back in December, probably wasn’t what Draghi was hoping for when he delivered his press conference overnight…

Initially, Draghi’s package of cuts and stimulus was taken as expected and EUR/USD dropped 150 pips like a stone. But reality soon didn’t line up with expectations as Draghi signalled that there would be no further cuts from here.

From yesterday’s look at trading expectations blog:

“With the retail market overweight short, backing up 99% of economist expectations that Draghi will deliver in stimulus, to me that risk lays to the upside in EUR/USD. Just look at this morning’s RBNZ decision for an example of markets being too expectant of an outcome and getting a huge re-pricing when things don’t go to plan.”

As traders, it is all about expectations and managing where the greatest risk will lie. As you can see above, yesterday we spoke about the market being overweight short while ALL expectations were on Draghi delivering on his promise of more cuts and more stimulus. This meant that if things didn’t go to plan then the greatest risk would be an upside spike.

What did the ECB actually deliver?
– Cut in the deposit rate further into the negative from -0.3% to -0.4%.
– Increase in QE stimulus from €60 billion per month to €80 billion per month.
– Expanding QE to include the buying of corporate debt.
– Even with never ending QE, slashed inflation targets.

“Rates will stay low, very low, for a long period of time and well past the horizon of our purchases.”

“From today’s perspective and taking into account the support of our measures to growth and inflation, we don’t anticipate that it will be necessary to reduce rates further.”

The funny thing is, Draghi and the ECB were blunt about what they are doing and have been smashed for it. If they had have continued to drip feed markets with forward guidance that everyone knows wasn’t going to eventuate, the Euro probably would have fallen.

The trading lesson to be taken away here is managing the differences in expectation and reality. This scenario plays out over and over, month after month across all major news releases. You just have to change your thinking.

———-

Chart of the Day:
DAX30 Daily:

Click on chart to see a larger view.

After breaking major trend line support, the German DAX has come back to retest the underside of the level this time as resistance.

With a fundamental driver backing up the technicals on the charts, this level is well and truly in play heading forward from here.

———

On the Calendar Friday:
CAD Employment Change
CAD Unemployment Rate
CNY Industrial Production y/y

Do you see opportunity trading market expectations? 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 PC or MT4 for Mac prices or solicitation to trade. All opinions, news, research, ECN Forex 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]

Central Banks’ Right of Reply
March 14, 2016Dane Williams


Image: Weekend Notes

Central Banks’ Right of Reply:
Just like that we say goodbye to the ECB market driver and hello to the Fed. Central banks will get their right of reply to Mario Draghi and last week’s ECB stimulus, with all of the big players in action this coming week.

Tomorrow morning’s economic calendar is packed, with RBNZ Governor Wheeler speaking in Auckland first up, followed immediately by monetary policy meeting minutes out of Australia, and finally the big one of the day: The Bank of Japan policy meeting.

Australian and Kiwi sentiment will already be bearish, already gapping down to begin the week on the back of a weekend deluge of Chinese data misses. The weakening economy printed disappointing numbers in credit growth, industrial production, and the surprisingly weak retail sales which were actually being viewed as one of the final shining lights for the economy.

Following New Zealand’s shock cut last week, it will be interesting to read what the RBA was thinking during their previous meeting and whether external factors have changed expectations since then. Domestically the Australian economy is still performing remarkably well which makes me continue to lean toward the no change camp.

The AUD/USD weekly chart we have published in the technical analysis section of the Vantage FX News Centre is a chart of beauty for traders who rely on major levels to manage their risk. Click the ‘play button’ on the chart for a before and after snapshot of the level.

AUD/USD Weekly:

Click on chart to see a larger view.

Moving forward and the big Asian session data point on the economic calendar this week is the Bank of Japan’s monetary policy statement on Tuesday.

No change in policy is expected on the back of THE negative rates shock in January. In saying that, we know that the BoJ are always good for a shock or two so who knows!

(We take a look at USD/JPY as today’s chart of the day below.)

The final major piece of central bank action comes from the Fed on Thursday. We will have of course already gotten tier 1 retail sales, building permits and inflation data out of the US heading into the statement which could prove to be a nice little concoction for price action traders who rely on volatility to make their pips.

This month’s meeting isn’t seen as ‘in play’ but if data continues to defy expectations, Yellen will surely deliver a level of forward guidance about the next hike in the near term. In my opinion, the biggest divergence in market expectation and actual pricing lies between the USD and the Fed rate hike timeline. There is some serious scope for rate hikes in the near term.

———-

Chart of the Day:
With the monetary policy statement and press conference out of Japan really kicking things off tomorrow during Asia, I wanted to take a deeper look at the USD/JPY bigger picture.

A couple of weeks ago in the headlines and correlations blog, we featured USD/JPY as our chart of the day. The angle of that post was comparing the pair with the S&P 500 but the technicals are the same.

“Yes it may look like the pair has broken support, but the longer these weekly trend lines run, the more I like to treat them as a ‘zone’ rather than a hard level and this is a perfect example here.

That’s not a break out.”

USD/JPY Weekly:

Click on chart to see a larger view.

Moving forward the couple of weeks to where price currently sits, we see the support ‘zone’ continues to hold. Price has rejected off the level and printed multiple long wicks.

USD/JPY Weekly Zoomed:

Click on chart to see a larger view.

This chart shows this indecisive price action with the buyers continuing to soak up the sellers. Are you expecting more indecision or is this the week that we get the move away from support?

Stay safe out there and enjoy your week!

———

On the Calendar Monday:
CAD Daylight Saving Time Shift
USD Daylight Saving Time Shift

Do you see opportunity in Forex trading? 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 Forex trading 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]

AUD Jumper: Stevens Up for the Block
March 15, 2016Dane Williams


Image: Daily News X

AUD Jumper: Stevens Up for the Block:
The start of the week stuttered yesterday with an uneventful economic calendar leading to sideways chop as the majors consolidated at their highs. Nobody likes Mondays so how about we join Forex markets and just skip through that one? The preview of central bank actionthroughout Asia in yesterday’s Daily Market Update stays relevant so definitely give that blog a read if you missed it.

With Monetary Policy Meeting Minutes out of Australia first up, this Bloomberg article and subsequent charts caught my eye. The Aussie dollar really has been the best performer over the past month or so, bucking the trend with moderately good economic data reflecting positively on the domestic economy, but most of all benefiting from commodity prices bouncing off lows and easing in Europe and NZ meaning money is flowing into Australian assets in search of yield.

“The swaps market is pricing in just 13 basis points of interest-rate reductions in the coming six months. That compares with 28 basis points as recently as March 9.”



Speaking of commodity prices bouncing off lows, no chart reflects this better than the Oil daily:

OIL Daily:

Click on chart to see a larger view.

But in saying that, price is still capped by resistance from the most obvious swing low (former support now acting as resistance). I really don’t mean to sound like a perma-bear when it comes to Oil, I swear… But that level is hard to miss when you bring up a chart. Just saying.

OIL Hourly:

Click on chart to see a larger view.

Zooming into the Hourly and you can see that price is in a short term bullish channel. With price just bouncing off support here, if you are bullish commodities such as oil then this is your level to manage your risk around to play from the long side. There, see!

———-

Chart of the Day:
With the topical AUD/USD and USD/JPY charts used in yesterday’s Central Banks’ Right of Replyblog, we have to move to the crosses today to find our key levels.

In the technical context of the above commodity prices, taking a contrarian view on the Aussie up here wouldn’t be a terrible play.

AUD/JPY Weekly:

Click on chart to see a larger view.

The AUD/JPY weekly highlights the key resistance level that price has pushed into on the higher time frame chart.

AUD/JPY Hourly:

Click on chart to see a larger view.

Zoom into the hourly chart and I’ve highlighted a few places that price is giving you a chance to manage your risk around.

REMEMBER RBA MONETARY POLICY MEETING MINUTES THIS MORNING.

———

On the Calendar Tuesday:
NZD RBNZ Gov Wheeler Speaks
AUD Monetary Policy Meeting Minutes
JPY Monetary Policy Statement
JPY BOJ Press Conference

USD Core Retail Sales m/m
USD PPI m/m
USD Retail Sales m/m
NZD GDT Price Index

Do you see opportunity in Forex trading? 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 Forex 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 →