Best Thread FXCM/DailyFX Signals and Strategies

[Jason Rogers]

Sentiment Warns that Japanese Yen and Euro May Have Turned

Forex trading crowds have bought recent Euro weakness and sold Japanese Yen strength, but a turn seems imminent based on the latest readings from the Speculative Sentiment Index (SSI).

High forex volatility suggests that trend and breakout-based strategies may do well through short-term trading.

Past performance is not necessarily indicative of future results.​

As a result, the sentiment-based trading signals on DailyFX PLUS have recently begun selling the Euro and Australian Dollar against the US Dollar and the Japanese Yen. These trading signals are available as automated strategies at FXCMapps.com.

 

[Jason Rogers]

SSI: Sentiment Points to Further Gains in US Stocks

The latest report of the Speculative Sentiment Index (SSI) included two new components: XAU/USD (which tracks gold) and SPX500 (which tracks the S&P 500).

Past performance is not necessarily indicative of future results.​

The new readings on the SPX500 were particularly interesting. The ratio of long to short positions stands at -8.72 as 10% of traders are long. Yesterday the ratio was -8.31; 11% of open positions were long. That means traders are shorting US stocks and in increasing numbers.

Past performance is not necessarily indicative of future results.​

We use SSI as a contrarian indicator to price action, and the fact that the majority of traders are short gives a signal that the SPX500 may continue higher. The SSI report is updated twice a day at DailyFXplus.com.

 

[Jason Rogers]

Currency Volatility Favors US Dollar Breakout Trading

Past performance is not necessarily indicative of future results.

The Dollar Index has now rallied for five consecutive weeks amidst the resurgence in FX market vols.

Past performance is not necessarily indicative of future results.

Our DailyFX Volatility Indices continue to hit fresh highs as FX options traders bet on strong currency moves.

Past performance is not necessarily indicative of future results, but recent results could bode well for near-term performance across several key strategies, specifically the breakout strategies at FXCMapps.com.

 

[Jason Rogers]

Recent Bull Flag in EUR/JPY Can Spell Opportunity

Mixed signals from the G-20 regarding their stance on the weakening Yen have only fueled volatility. Many took this as a green light for Japan to continue weakening the Yen with the goal shoring up their exports, and in-turn, their economy, and a lot of the action in the markets over the past week has been Yen-driven.

Past performance is not necessarily indicative of future results.​

While it still may be too early to tell if this will provide a long-lasting catalyst for the Yen to weaken even more against almost every known currency on the face of the planet, the recent Bull Flag put in EURJPY can spell opportunity for traders.

Bull Flag in EUR/JPY highlights recent indecision

Past performance is not necessarily indicative of future results.​

The recent concern going into the G-20 meeting, combined with the uncertainty of the next BOJ governor, the pair put in a Bull Flag formation as investors protected gains. Should the bullish momentum come back in the pair, traders can look to enter using a breakout entry order above near-term resistance to enter the position.

Breakout entry offers compelling setup should Bullish trend continue

Past performance is not necessarily indicative of future results.​

As with any other breakout entry order, risk management is of the upmost importance. The first profit target offers a 130-pip gain with 85 pips of risk, while the second profit target at 130.00 could offer as much as 390 pips to the upside. You can see more price action setups at DailyFX.com.

 

[Jason Rogers]

SSI: GBPUSD Positioning Hits its Most Net-Long in 8 Months

The latest readings from the Speculative Sentiment Index (SSI) on DailyFX PLUS show that long positions in GBP/USD are at their highest levels in 8 months. This is despite the fact that GBP/USD has been steadily dropping in value since traders last flipped from being net short to net long on January 15th.

Past performance is not necessarily indicative of future results.​

This is a strong confirmation of SSI's usefulness as a contrarian indicator and could indicate further declines. The ratio of long to short positions in the GBP/USD stands at 4.03 as 80% of traders are long.

Yesterday the ratio was 3.07; 75% of open positions were long. Long positions are 15.5% higher than yesterday and 30.0% above levels seen last week. Short positions are 12.0% lower than yesterday and 11.2% below levels seen last week.

Open interest is 8.7% higher than yesterday and 17.9% above its monthly average.

As a result both the Breakout2 and Momentum2 trading signals are selling GBP/USD. Both of these signals are available as automated strategies at FXCMapps.com.

 

[Jason Rogers]

SSI: Australian Dollar Positioning Grows Further Net-Long

Past performance is not necessarily indicative of future results.​

The ratio of long to short positions in the AUD/USD stands at 2.35 as 70% of traders are long. Yesterday the ratio was 2.18; 69% of open positions were long. We use our SSI as a contrarian indicator to price action, and the fact that the majority of traders are long gives signal that the AUDUSD may continue lower.

Long positions are 12.0% higher than yesterday and 14.1% above levels seen last week. Short positions are 3.8% higher than yesterday and 5.9% below levels seen last week. Open interest is 9.4% higher than yesterday and 19.8% above its monthly average. The trading crowd has grown further net-long from yesterday and last week.

The combination of current sentiment and recent changes gives a further bearish trading bias. It's no wonder then that three DailyFX PLUS Trading Signals -- Range1, Breakout2 and Momentum2 -- are all giving indications to sell AUD/USD.

Past performance is not necessarily indicative of future results.

All three of these signals are available as automated strategies at FXCMapps.com.

 

[Jason Rogers]

Breakout Trading Remains Top Strategy as US Dollar Surges

A continued surge in forex market volatility still favors high-volatility Breakout-trading strategies, and current market conditions continue to favor major moves across the board.

DailyFX Forex Volatility Indices​

DailyFX Volatility Indices trade at significant peaks as FX options traders bet on strong currency moves across the board. Volatility expectations are now at their highest levels since Euro Zone crises hit fever pitch in June/July of last year.

Past performance is not necessarily indicative of future results.​

Volatility tends to cluster; if last week was volatile, there is a strong likelihood that this week will be similar. Strong moves may continue through the foreseeable future until we have concrete signs of market calm. The table below shows strategy preferences broken down by currency pair.

DailyFX Individual Currency Pair Conditions and Trading Strategy Bias

Past performance is not necessarily indicative of future results.​

Past performance is not necessarily indicative of future results, but the DailyFX trend-based and breakout sentiment-based trading strategies have historically done well in similar market conditions.

Past performance is not necessarily indicative of future results.​

Dollar volatility seems especially likely against the fast-falling British Pound, while continued breakdowns in the Japanese Yen warn of further weakness.

Past performance is not necessarily indicative of future results.​

There's more info on how to automate the high-volatility breakout trading system at DailyFX.com.

 

[Jason Rogers]

Signs that EUR/JPY Uptrend May Resume

In the EUR/JPY daily chart shown below, we can see price advancing 2739 pips, but then sharply declining 999 pips. The Aroon indicator is showing signs that the uptrend may resume.

Past performance is not necessarily indicative of future results.​

The indicator itself (shown below) is derived from two lines, Aroon Up and Aroon Down. If Aroon Down is above Aroon Up the trend is considered down with price expected to go lower. The opposite holds true if Aroon Up is residing above Aroon down. The indicator is available free for both the FXCM Trading Station and MetaTrader (MT4) at FXCMapps.com.

Past performance is not necessarily indicative of future results.​

Looking at the readings for EUR/JPY below, we can see that even though the pair has declined over the past two weeks, the Aroon Up line still resides above the Aroon Down line. Knowing this, trend traders can look for a price bounce as the trend is expected to continue.

Past performance is not necessarily indicative of future results.​

One way to trade this retracement is to enter on a market swing or even a breakout to higher highs. Regardless of the strategy taken, traders should keep an eye on the Aroon indicator. If the Aroon Down crosses over the Aroon Up this may signal an end to current the EUR/JPY uptrend and a change to market direction.

 

[Jason Rogers]

Crude Oil, Gold Corrections May Be Cut Short by Sequester Fears

Crude oil and gold are retracing as markets digest recent volatility but worries about the impact of looming US “sequester” spending cuts may reboot risk aversion.

WTI Crude Oil (NY Close): $92.63 // -0.48 // -0.52%

Past performance is not necessarily indicative of future results.​

Prices broke below support at 92.80, the 38.2% Fibonacci retracement, exposing the 50.0% level at 91.13. A further break beneath that aims for the 61.8% Fib at 89.45. The 92.80 mark has been recast as near-term resistance, with a turn back above that eyeing the 23.6% retracement at 94.87.

Spot Gold (NY Close): $1613.85 // +20.35 // +1.28%

Past performance is not necessarily indicative of future results.​

Prices broke above resistance at 1609.40, the 38.2% Fibonacci retracement, exposing the 50% level at 1626.20. A further push above that aims for the 61.8% Fib at 1643.00. The 1609.40 mark has been recast as near-term support, with a reversal back beneath that eyeing the 23.6% retracement at 1588.61.

You can see more of today's charts on commodities including silver and copper at DailyFX.com.

 

[Jason Rogers]

Sentiment Favors Aussie & GBP Weakness, USD and Yen Strength

Retail forex speculators have aggressively sold the Japanese Yen and US Dollar against the Australian Dollar and British Pound.

Weekly Summary of Forex Trader Sentiment and Changes in Positioning

In particular, the latest readings of the Speculative Sentiment Index (SSI) show that the British Pound may hit fresh lows. Our volatility-friendly Breakout strategy has been particularly effective at selling GBPUSD weakness, while the trend-following Momentum1 and Momentum2 systems have likewise latched onto GBP declines.

Past performance is not necessarily indicative of future results.​

While past performance is not necessarily indicative of future results, these systems may continue to do well as crowds show few signs of capitulation, and indeed the strong downtrend has yet to show any real signs of letting up.

DailyFX trading strategies can be automated using programs available at FXCMapps.com

 

[Jason Rogers]

SSI: GBP/USD Plummet Continues - Retail Remains on the Wrong Side

In my previous post, I highlighted how the DailyFX sentiment-based strategies favored GBP weakness and USD strength. That play has worked out well today as the US dollar has surged against the British Pound, Euro and Yen after strong February data.

• U. of Michigan Confidence (FEB) > 77.6 versus 76.3 expected, up from 76.3 previously
  [*]ISM Manufacturing (FEB) > 54.2 versus 52.5 expected, up from 53.1 previously
  [*]ISM Prices Paid (FEB) > 61.5 versus 57.0 expected, up from 56.5 previously

Following the economic releases, GBP/USD fell from 1.5014 to as low as 1.4984, before rebounding to 1.5007 (this is the lowest exchange rate since July 2010). Selling persists amid weak UK data, a dovish and divided Bank of England, and the United Kingdom losing its revered ‘Aaa’ rating. Further downside is expected.

Past performance is not necessarily indicative of future results.​

SSI: The ratio of long to short positions in the GBPUSD stands at 2.61 as 72% of traders are long. Yesterday the ratio was 2.07; 67% of open positions were long. Long positions are 7.7% higher than yesterday and 7.0% above levels seen last week. Short positions are 14.6% lower than yesterday and 4.3% below levels seen last week.

The combination of current sentiment and recent changes gives a further bearish trading bias. While past performance is not necessarily indicative of future results, the sentiment-based strategies on DailyFX PLUS have been particularly effective at selling GBP/USD weakness. These trading strategies can be automated using programs available at FXCMapps.com

 

[Jason Rogers]

AUD at Risk on RBA

The Australian Dolla may come under increased pressure over the next 24-hours of trading as the Reserve Bank of Australia (RBA) keeps the door open to lower borrowing costs further.

Past performance is not necessarily indicative of future results.​

Although the RBA is widely expected to keep the benchmark interest rate at 3.00%, Governor Glenn Stevens may sound more dovish this time around as the $1T economy faces a slowing recovery.

According to Credit Suisse overnight index swaps, market participants now see the RBA lowering the cash rate by 50bp over the next 12-months, and the recent weakness in the AUDUSD should gather pace over the near to medium-term as interest rate expectations surrounding the RBA deteriorate.

The latest readings from the DailyFX Speculative Sentiment Index (SSI) show that crowds continue to buy Aussie weakness.

Past performance is not necessarily indicative of future results.​

The ratio of long to short positions in the AUDUSD stands at 4.12 as 80% of traders are long. Yesterday the ratio was 3.94; 80% of open positions were long. Long positions are 9.2% higher than yesterday and 44.2% above levels seen last week. Short positions are 4.3% higher than yesterday and 20.0% below levels seen last week.

Past performance is not necessarily indicative of future results.​

Open interest is 8.2% higher than yesterday and 23.2% above its monthly average. We use our SSI as a contrarian indicator to price action, and the fact that the majority of traders are long gives signal that the AUDUSD may continue lower. The trading crowd has grown further net-long from yesterday and last week.

Past performance is not necessarily indicative of future results.​

The combination of current sentiment and recent changes gives a further bearish trading bias. As a result the trading signals on DailyFX PLUS are selling the Australian dollar.

Past performance is not necessarily indicative of future results.​

The DailyFX trading signals are available as automated strategies at FXCMapps.com

 

[Jason Rogers]

Dow Surges to Record Highs - What does it Mean for the Euro?

The Dow Jones Industrial Average has traded to record highs, and forex correlations suggest this may help the Euro recover against the resurgent US Dollar (ticker: USDOLLAR).

Correlation between the
Dow Jones Industrial Average
and the Euro/US Dollar

Past performance is not necessarily indicative of future results.

Dow Jones Industrial Average (lhs)
Euro/US Dollar Exchange Rate (rhs)​

The correlation between the Dow Jones Industrial Average and the Euro/US Dollar exchange rate trades near its highest levels in a year, and a surging DJIA bodes well for the otherwise-downtrodden EUR/USD.

Forex Correlations Summary

Past performance is not necessarily indicative of future results.​

Dow strength suggests that the Euro may likewise prove resilient, and the technical forecast for the Euro on DailyFX.com favors strength above the key $1.30 mark.

 

[Jason Rogers]

Crude Oil, Gold May Push Higher on Upbeat Fed Beige Book

Crude oil and gold may rise on improving risk appetite and swelling inflation expectations if a supportive Fed Beige Book survey boosts US recovery hopes.


WTI Crude Oil (NY Close): $90.82 // +0.70 // +0.78%

Prices are retesting support-turned-resistance at 91.13, the 50% Fibonacci retracement. A break above this barrier targets the 38.2 % level at 92.80.

Past performance is not necessarily indicative of future results.

Near-term support is at 89.45, the 61.8% Fib, with a drop below that aiming for the 76.4% retracement at 87.38.


Spot Gold (NY Close): $1575.50 // +1.73 // +0.11%

Prices are testing support at 1570.37, the 38.2% Fibonacci expansion. Near-term resistance is at 1589.36, the 23.6% level, with a break above that aiming for the February 26 high at 1620.09.

Past performance is not necessarily indicative of future results.

Alternatively, a break downward initially aims for the 61.8% Fib at 1554.62.


You can see more of today's technicals on commodities including silver and copper at DailyFX.com

 

[Jason Rogers]

Breakout Identified in USD/JPY

Breakout Opportunities is a breakout strategy that aims to catch the significant moves that typically happen when currencies break through technical support or resistance. The Breakout Opportunities system has just bought USD/JPY and recommends entering this trade at any price between 94.345 and 94.802.

Past performance is not necessarily indicative of future results.​

A stop loss has been set at the 24-hour low of 93.509 and a profit target has been set at the 1 Day ATR level at 95.337. The system will move the stop to the next 24-hour low every time that 24-hour low is higher than the previous 24-hour low.

Past performance is not necessarily indicative of future results.​

The signal was issued because the USDJPY has broken its 24-hour high while our Speculative Sentiment Index was at -1.17, suggesting that the USDJPY may have further to rise. The SSI Breakout strategy tends to work well in volatile market conditions, generally when the DailyFX Volatility Percentage in a pair is above 75%. The volatility in USDJPY at the time of signal is 2%.

More Breakout signals from DailyFX are available as automated strategies at FXCMapps.com

 

[Jason Rogers]

Strong Employment Report Bullish for US Dollar

The US economy continues to show signs of further momentum, with a very impressive February labor market report beneath its belt.

Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) 5-minute Chart: March 8, 2013

Past performance is not necessariliy indicative of future results.​

Following the release, the USDOLLAR rallied from a near-session high of 10507 to a fresh session high at 10573, at the time this report was written. This is also a new yearly high.

THE TAKEAWAY: USD Change in Nonfarm Payrolls (FEB) > +236K versus +165K expected, from +119K (revised from +157K) > USD Unemployment Rate (FEB) > 7.7% versus 7.9%, from 7.9% > USDOLLAR BULLISH

All the subcomponents of the USDOLLAR confirmed bullishness for the greenback, and the AUD/USD fell from 1.0275 and is currently trading around 1.0220.

Past performance is not necessarily indicative of future results.​

The Breakout2 strategy on DailyFX PLUS is currently signalling to short AUD/USD. DailyFX trading signals are available as automated strategies at FXCMapps.com

 

[Jason Rogers]

US Dollar Momentum Offers Trend Trading Opportunities

Forex market volatility has fallen from recent highs as the US Dollar (ticker: USDOLLAR) consolidates versus the Euro and other major counterparts. Yet the broader USD uptrend suggests that trend-following trades remain attractive in the week ahead.

Past performance is not necessarily indicative of future results.​

The Dollar has been especially strong against the downtrodden Japanese Yen, and USD/JPY may continue to hit fresh peaks alongside other Yen crosses. Prices broke above resistance at 94.98, a barrier marked by the 23.6% Fibonacci expansion.

Past performance is not necessarily indicative of future results.​

Buyers are now targeting the 38.2% level at 97.52. The 94.98 level has been recast as support. A drop back below that broadly aims for the February 25 low at 90.84.

Past performance is not necessarily indicative of future results.​

While past performance is not necessarily indicative of future results, the trend-following trading signals (Momentum1 and Momentum2) on DailyFX PLUS could do well across particular currency pairs, while the breakout trading strategy (Breakout2) has become comparatively less attractive on the drop in vols.

DailyFX trading signals are available as automated strategies at FXCMapps.com

 

[Jason Rogers]

Pound Plummets to 2.5-Year Low; SSI Points to Further Declines

The British Pound set a new 2.5-year low as UK manufacturing production and industrial production disappointed expectations. Industrial production fell 1.2% in January, worse than expectations for a 0.1% rise in production and down from December’s 1.1% rise.

GBPUSD Daily: March 12, 2013

Past performance is not necessarily indicative of future results.​

The latest reading on the Speculative Sentiment Index (SSI) for GBP/USD is at 2.65, meaning that there are 2.65 long positions for every 1 short position. We use SSI as a contrarian indicator to price action, and the fact that the majority of traders are long gives signal that the GBP/USD may continue lower.

Support might be seen at 1.4630, by the 161.8% Fibonacci expansion of declines starting in April 2012, and resistance may be seen by the key 1.5000 figure.

Past performance is not necessarily indicative of future results.

The SSI-based trading signals on DailyFX PLUS are currently shorting GBP/USD. These signals are available as automated strategies at FXCMapps.com

 

[Jason Rogers]

Mixed SSI Points to Short-Term Pullback in S&P 500

Mixed SSI signals can help to indicate a short-term pause or retracement of a longer term trend. Such signals are currently present for SPX 500 which tracks the S&P 500 index.

While the strongly negative SSI for SPX 500 suggests that the uptrend in US stocks could continue, the ratio of short to long positions is not as extreme as it has been over the past week when US stocks have been making new highs.

Past performance is not necessarily indicative of future results.​

The ratio of long to short positions in the SPX500 stands at -6.20 as 14% of traders are long. Yesterday the ratio was -7.04; 12% of open positions were long. Long positions are 8.0% higher than yesterday and 32.3% above levels seen last week. Short positions are 5.0% lower than yesterday and 1.9% below levels seen last week.

Past performance is not necessarily indicative of future results.​

These mixed SSI signals could present an opportunity to swing traders who want to play the market from the short side, and to long term bulls who are looking for an opportunity to buy at lower levels on a retracement.

Past performance is not necessarily indicative of future results.​

Negative RSI divergence and a Hanging Man candlestick have emerged as other warning signs hinting a correction lower may be ahead. A break back below 1554.60 initially aims for the 38.2% Fib at 1537.90.

 

[Jason Rogers]

SSI: Sharp Shift in AUDUSD Sentiment Warns of Short-term Upside

The ratio of long to short positions in the AUD.USD stands at 1.18 as 54% of traders are long. The trading crowd has grown less net-long from yesterday and last week.

Past performance is not necessarily indicative of future results.​

While SSI is primarily used as a contrarian indicator to price action, this reduction in long positions could point to a short-term upside for the pair.

Yesterday the ratio was 1.69; 63% of open positions were long. Long positions are 20.3% lower than yesterday and 50.8% below levels seen last week.

Short positions are 14.4% higher than yesterday and 3.1% below levels seen last week. Open interest is 7.4% lower than yesterday and 27.9% below its monthly average.

Past performance is not necessarily indicative of future results.

The SSI-based Momentum2 trading signal on DailyFX PLUS is currently long AUD/USD. This signal is available as an automated strategy at FXCMapps.com