Best Thread FXCM/DailyFX Signals and Strategies

GBP/USD Rebound Vulnerable to Slowing U.K. Consumer Price Index (CPI)



The DailyFX research team can help you to navigate the ongoing Brexit volatility in a unique series of webinars ending with a rally in the final week.




What would a Brexit mean for the UK economy, assessing both the short and long term impacts? How will the decision affect traders across multiple markets? How will the Pound react? To hear their insights and analyses on the impact of this vote, you can sign up for the free webinar series on the FXCM UK website.

Rising Fed Rate Expectations Cushion US Dollar - What About Risk?

Markets are now pricing in September as the most likely period for the first rate hike, with the odds of a hike having jumped to 62%. For market participants to fully price in a Fed hike in June, we'd want to see the June implied probability jump above 60% itself.




Correlation is not causation, but the Fed has not raised rates unless market participants have priced in at least a 60% chance in the front month of them doing so. Accordingly, if US data continues to edge up, then June expectations should rise, and keep the US Dollar insulated further.

For more details, see Christopher Vecchio's article on DailyFX.com

GBP/USD Gains on BOE Brexit Commentary



The DailyFX research team can help you to navigate the ongoing Brexit volatility in a unique series of webinars ending with a rally in the final week.




What would a Brexit mean for the UK economy, assessing both the short and long term impacts? How will the decision affect traders across multiple markets? How will the Pound react? To hear their insights and analyses on the impact of this vote, you can sign up for the free webinar series on the FXCM UK website.

US Dollar Remains in Focus as Contest Trading Concludes

The month of May is quickly closing, which means we are wrapping up another $10,000 trading challenge. Our top five competitors this month have had phenomenal success so far, with V.S. from Glendale, California leading the field with an 810% gain! Remember though this month’s challenge hasn’t concluded yet—over a week of trading still remains. To get a better idea of what is going on in the market, and get an idea of what our competitors might be trading, let’s review some of the major market themes occurring during the month of May.




As with last month, the US Dollar has again been in focus for the month of May. While April’s trading centered on a major sell off for the US Dollar, traders are now focusing on its recent appreciation relative to major pairs. The EUR/USD for instance has declined as much as 437 pips on the month. Also, with many contest participants tracking commodity currencies, it should be noted that the USD/CAD has risen 713 pips from the May low at 1.2460. Most of the movement on the US Dollar has been based on the presumption of future rate hikes from the Fed. This is with good reason, as John Williams from the San Francisco Fed recently stated in an interview that “In my view it will be appropriate to start raising rates again later this year.”

SSI is another way to monitor how traders are positioning themselves going into this month’s close. Here, the Aussie Dollar takes focus as both the EUR/AUD and AUD/USD remain at extremes. Currently sentiment for the EUR/AUD sits at an extreme reading of -3.5. This SSI reading means that nearly 72% of all positions are short for the pair. Typically, when positioning is heavily net short, this signals a currency pair may potentially be trending higher. With the EUR/AUD trading just off of its highs, the pair has advanced as much as 687 pips for the month of May!

With all of the exciting action this month, it’s now time to prepare for next month’s $10,000 trading challenge. New traders that are looking to get involved in the market for next months challenge should remember that DailyFX offers a variety of resources to help them get started with their trading.

Traders focusing on market fundamentals can begin their research by reading the latest information on the Euro and US Dollar from our 2016 Analyst forecasts. Traders looking to revamp their risk management skills may also want to review our Traits of Successful Traders e-Guide. This is a great read to help traders get up to speed on the number one mistake traders make, as well as review the effects of trading with leverage.

If you are unfamiliar with the contest, the $10,000 Monthly Challenge is a currency trading contest hosted by FXCM, which gives away $10,000 in total cash prizes every month: $5,000 for the trader with the highest trading return, $2,500 to second place, $1,500 goes to third place, $750 for fourth, and finally a $250 prize for fifth place. For more information on the $10,000 Monthly Challenge and to read the rules for entry and how to win, visit the FXCM UK website.

GBP: New Brexit Poll Shows Leave Camp Taking Lead

According to Bloomberg, "The pound dropped after a new poll showed a jump in support for the campaign to take Britain out of the European Union, spooking some investors who had thought that the result was a foregone conclusion.




"Sterling fell against all of its 16 major peers as ICM opinion polls released Tuesday by the Guardian showed a lead for the 'Leave' camp."


The latest DailyFX research shows the ratio of long to short positions in the GBP/USD stands at 1.20 as 54% of traders are long. Yesterday the ratio was -1.03; 49% of open positions were long.




We use our Speculative Sentiment Index (SSI) as a contrarian indicator to price action, and the fact that the majority of traders are long gives signal that the GBPUSD may continue lower.




The trading crowd has flipped from net-short to net-long from yesterday and last week. The combination of current sentiment and recent changes gives a further bearish trading bias.

The DailyFX research team can help you to navigate the ongoing Brexit volatility in a unique series of webinars ending with a rally in the final week.




What would a Brexit mean for the UK economy, assessing both the short and long term impacts? How will the decision affect traders across multiple markets? How will the Pound react? To hear their insights and analyses on the impact of this vote, you can sign up for the free webinar series on the FXCM UK website.

Watch Retail Sentiment on British Pound into Brexit Vote

Quantitative strategist David Rodriguez had the following to say about the British Pound in his Weekly Speculative Sentiment Index (SSI) report on DailyFX.com:

"Retail FX traders have bought aggressively into the British Pound’s recent slide versus the US Dollar, and a contrarian view of ‘crowd’ positioning acts as signal the GBP/USD may continue lower. Our data shows traders remained net-long GBP/USD as it fell from $1.53 to lows near $1.38, but more recently we have seen periods in which traders turned net-short.




"If we nonetheless see a continued shift towards buying—much as we have this week—our sentiment indicator will keep us firmly in favor of selling the GBP/USD. It will be critical to watch Sterling price action headed into the highly-anticipated UK ‘Brexit’ vote, and we expect the GBP may remain volatile in the weeks ahead."


The DailyFX research team can help you to navigate the ongoing Brexit volatility in a unique series of webinars ending with a rally in the final week.




What would a Brexit mean for the UK economy, assessing both the short and long term impacts? How will the decision affect traders across multiple markets? How will the Pound react? To hear their insights and analyses on the impact of this vote, you can sign up for the free webinar series on the FXCM UK website.

Dollar Weakness is In Vogue; but For How Long?

The past week has brought an out-sized reversal in the US dollar with traders facing the reality that markets will likely have to wait a bit longer to get another rate hike out of the Fed.




But the question remains: Is this a lasting move in the Greenback?

As in, the Fed surely doesn’t want to hike in the face of declining data when numerous questions already exist to the strength of the American economic recovery; but there’s a reason that they’ve been driving for higher rates for over a year now while there are some very big global macro questions.

Currency analyst James Stanley discusses these questions in his article on DailyFX.com

Risk Aversion Roars Ahead of Fed, BOJ, MSCI

This week brings a flurry of inflection points for markets: Tonight is the expected MSCI decision for Chinese A-shares to be included in equity benchmarks, Wednesday brings FOMC with the Bank of Japan following later that night. In the week after, we have the Brexit referendum.




Currency analyst James Stanley covers these topics today in his article on DailyFX.com

Brexit Risk in Focus as BOE Holds Rates, Warns on Risks to Economy

Earlier today, the Bank of England held its main interest rate unchanged at 0.50% as expected. The main point of focus, however, was regarding uncertainities surrounding the referendum vote that will take place next Thursday, June 23.




This has had the effect of leading to “delays to major economic decision,” according to BOE Governor Mark Carney. Currency strategist Christopher Vecchio discusses the implications for traders in his article on DailyFX.com

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

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




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




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

Brexit Analysis Directory

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




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




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

Brexit Referendum Could Present Far More Risk than Reward

There is one massive problem with exposure around Brexit: Unquantifiable risk as James Stanley discusses in his article today on DailyFX.com:


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

Traders trying to pick bottom suggest GBP could drop further

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




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



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

Building a Post-Brexit Trading Plan

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

USD/JPY Bounces From Brexit Lows

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




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

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

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




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

James Stanley discusses this today in his article on DailyFX.com

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

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




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

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

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




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

US Labor Data Sets Up Better US NFPs

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




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

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

WTI Crude Oil Price Forecast: Bearish Price Channel Favors Downside Bias

As US Dollar Has Support, Watch Polarity Level on USOil At ~$45-46/bbl




For complete technical analysis, see Tyler Yell's article on DailyFX.com