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Mysticforex
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Everything posted by Mysticforex
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GBP/NZD enjoyed a very strong rally on Monday taking out the key 2.04 level, which was a former support turned resistance. If the currency pair continues to move higher, we should see the rally extend to 2.06. However if the RBNZ fails to lower their inflation forecast, NZD recovers its losses and GBP/NZD falls back below 2.04, a move back to 2.0 becomes likely.
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Having made fresh lows last week the pair see no real support until the 8100-8000 level and the only reason that it may pause is because it is now grossly oversold. Only a move above 8500 relieves the downside bias
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Taking a look at the monthly chart of USD/JPY, 120 is an important resistance level not only because of its psychological significance but also because it represents the 61.8% Fibonacci retracement of the 1999 to 2011 decline. If this level is broken, the next area to watch will be 122.20, where the currency pair found resistance in January and February of 2007. Should this turn out to be a failed test for USD/JPY in the near term, the pullback could extend as far as its recent swing low of 117.25
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Technically the EUR/GBP pair enjoys strong triple bottom support at the 7800 level and a break there opens a move towards 7500. A rejection could take the pair to the top of the range at 8000 but only a close above 8050 removes the bearish bias.
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Technically the EUR/GBP pair enjoys strong triple bottom support at the 7800 level and a break there opens a move towards 7500. A rejection could take the pair to the top of the range at 8000 but only a close above 8050 removes the bearish bias.
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The next major central bank announcement will be from Canada, which is why USD/CAD is in play for the next 24 hours. On the eve of the rate announcement, the currency pair hovers not far from its 5 year high. Two months ago, the BoC dropped the word neutral from their monetary policy statement, fueling bets that they are more open to the idea of raising interest rates. However there is very little chance that Canada will raise rates before the U.S. and the Federal Reserve is not slated to tighten until the middle of next year at the earliest. While the labor market has seen dramatic improvements leading to a pickup in retail sales and inflation is on the rise, manufacturing and trade activity along with Q3 GDP growth fell short of expectations. Oil prices also dropped more than 17% since the last monetary policy meeting. Therefore we don’t expect any renewed optimism from the BoC and if instead they express concerns about the volatility of oil, USD/CAD could test its 5 year high of 1.1467.
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Looking at the techs the 8400 level remains the key support and a break there could open a run towards 8250 over the next several sessions. Meanwhile only a break above 8650 alleviates the bearish bias in the pair. The Aussie staged a strong recovery off the recent multi year lows set over the holiday laden week and raced all the way towards 8500 before running out of gas. However, the sharp rebound may be nothing more that a short covering bounce as the fundamentals against the unit remains substantial. The recent drop in iron ore prices to below $60/ton is likely to have a massive negative impact on the AU economy which receives 1 out of 5 export dollars from that sector. If the slump in commodity prices does not correct soon, the RBA may be forced to consider another rate hike in order to ease the economic pain. Tonight's meeting ma be key as the RBA could signal a change of posture from its current neutral stance that could bring another round of selling for the Aussie.
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This Sunday 30 November could be the most significant day for gold in decades, as Swiss National Bank (SNB) asks Switzerland’s general public whether it should increase gold reserves. A ’yes’ vote would mean that over the next five years SNB would have to buy at least 1500 tonnes of gold, costing approximately $56.3 billion, to meet the minimum 20% asset-value threshold outlined in the referendum. It would also have to repatriate all the Swiss gold held abroad. As a result, some analysts believe prices could climb by 10-15%. The latest polls show that support for the ‘yes’ vote is waning however, with only 38% of voters currently in favor. This is down from a month ago, though polls also show that 15% of the public remain undecided.
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Taking a look at the monthly chart of USD/CAD if the currency pair breaks its current 5 year high of 1.1467 1.15 will serve as near term resistance but 1.1540, the 38.2% Fibonacci retracement of the 2007 to 2009 rally will be the key level to watch. On the downside, 1.12 remains support for USD/CAD.
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Techincally AUDJPY pair has turned in a major reversal off the 102.00 level and now targets 100.00 as the near term support. A break there opens up a run to 98.00 while only a close above 102.00 negates the bearish bias.
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After a gap lower opening this week in the EURUSD, the euro strengthened. Ironically, one of the reasons given for the recovery was optimism in Germany, partially attributed to the lower euro. The combination of massive short positions in the euro, and long positions in the USD against all currencies in a holiday shortened week can be a set up for some surprise moves. While the global cash forex markets are not closed Thursday it is likely many traders in the US will be away from their screens. This can result in either very dull markets, or markets prone to erratic and exaggerated moves. Where there is risk, there is also opportunity for those with a plan.
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Question for all you traders out here.. What's your approach and why. Do you prefer to grab more pips or Do you prefer to trade the small moves with greater probability? My trading has shifted quite a bit from the traditional, more pips and swing trading to small but highly probable trades. At times the urge to widen the target on seeing a double top pattern is hard to fight, but again the market is and can be irrational. I also find it a good way to control greed. Do any of you try this approach of trading small but very probable moves? Thoughts??
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Euro was decimated today by comments from Mario Draghi who made no bones about the fact that he would like to see more QE in order to stimulate the economy. He also noted that he thinks the currency should weaken. Clearly the ECB wants more action and a lower exchange rate but they are being stymied by the German monetary authorities who oppose most of the accommodation measures. On Monday however the market will get a glimpse at the key IFO sentiment survey and if business confidence in Germany shows serious deterioration, German authorities may become much more amenable to some compromise and the euro could set fresh yearly lows. The EUR/USD now finds itself at the last possible support ahead of the key 1.2350 level. A break there wold open up a move to 1.2250 and possibly a fall to key 1.2000 barrier. Only a move above the 1.2600 figure negates the bearish bias.
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Taking a look at the monthly chart of USD/JPY, 120 is not only a psychologically significant level but also the 61.8% Fibonacci retracement of the 1997 to 2011 decline. As a result, it should prove to be a formidable resistance level for the currency pair. While some bulls may wait to take profits closer to that level, pair’s 8% rally in November could encourage others to bank gains earlier. Yet declines in USD/JPY should be limited to 116 and at worse 115 because monetary policy dynamics should keep the currency pair bid.
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Washington special interests once more prevailed this week when they denied passage of the proposed Canadian Keystone XL pipeline. It has now been six years since initially proposed, and for six years the US government has failed to give Canadian permission to construct this pipeline. As proposed it would ship about 800,000 barrels of oil per day from Alberta Canada to Cushing Oklahoma, and subsequently to the US Gulf. Failure to pass the bill in the US Senate was initially viewed as bearish news for the loonie, but the sell off did not last long. Passage was a long shot at best in the current lame duck session, so traders should not be surprised at the out come.
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Having taken out the key 185.00 level GBP/JPY has clear sailing all the way to 190.00 while the downside is supported by 180.00 as the upside bias remains firmly in place.
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Introduce Yourself Here - Don't Be Shy!!
Mysticforex replied to trading4life's topic in Beginners Forum
-------------------------------------------------------------------------------------------------------------------------------------- Welcome Tedy, and brunotata to traderslabaoratory. -
For the past 4 months, sterling has been gradually losing value against the U.S. dollar and earlier this month, the currency pair dropped to fresh 1 year lows. Initially the move was driven by expectations for earlier tightening by the Federal Reserve but the selling gained momentum after weaker UK data raised concerns about the pace of BoE tightening. Last week, the Bank of England lowered their growth and inflation forecasts forcing banks to push out their own timeline for when the MPC will raise rates. Sterling fell as a result but is still holding above its 1 year low. Whether this level is broken could be determined within the next 24 hours with the release of the BoE and FOMC minutes. If the minutes show a more cautious BoE and more optimistic Fed, it would reinforce the divergence in monetary policy direction, sending GBP/USD below 1.5593.
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Today, Japan’s Prime Minister Abe confirmed long simmering rumors that he will delay the second increase in the sales tax hike by 18 months and will dissolve the lower house of the Parliament seeking political support for his broad based agenda of economic reform.
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The 8000 level in EUR/GBP represents a triple top and a lower triple top at that suggesting that the pair is now at the top of its range and will need to trade above the 8125 level in order to establish a new bullish bias. Meanwhile the downside target is the lower end of the range at 7800
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Taking a look at the monthly chart of NZD/JPY, there is no major resistance in the currency pair until 95. However if currency pair drops below 90, the losses could accelerate towards 88.
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WTI at $75.82 Crude at $77.74 Oil is traded in U.S. Dollars, Demand has dropped off a bit but high production continues. Countries that export a lot of Oil, like Canada, can expect to see their currencies weaken.
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The bear market in crude oil continued today. WTI traded under $75 per barrel today, the lowest in four years, while brent December crude approached $78 per barrel. The catalyst for today's bear raid seemed to be fear the November OPEC meeting will not result in an agreement to reduced production. Abundant North American supplies have altered the supply demand balance and are finally favoring the consumer.
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USD/JPY has clearly ran into a bi of resistance at the 116.00 level but a break higher could open a run towards 118.00 while a failure could pull the pair all the way to fill the gap open at 112.50
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11/14/14 Chinese Retail Sales and Industrial Production (12:30AM ET) No Trade - Chinese data is notoriously difficult to predict but should be market moving especially for AUD