Best Thread FXCM/DailyFX Signals and Strategies

[Jason Rogers]

There's a lot happening in the markets today that you should be keeping an eye on.

1. JPY Crosses: David Rodriguez notes that traders have been buying the JPY crosses, including the EUR/JPY and the GBP/JPY which have seen sharp declines today. Here's a copy of the SSI update David posted to his Twitter account:

2. Gold: Retail traders are continuing to sell gold which as a contrarian indication could mean there is more upside to gold. The situation in Syria could be a fundamental catalyst to take into account. Here's a look at the gold SSI chart:

3. Turkish Lira: The lira hit another record high, crossing above 2.00, and is now up over 10% for the year. The focus of this pair heading higher in previous weeks was due to Fed tapering and money leaving emerging markets. Now the situation in Syria could add further pressure on the Lira due to Turkey's close proximity.

I won't put a chart here, but USOil and UKOil are more pairs to watch for upside due to Syria.

 

[Jason Rogers]

Potential GBP/USD Trade Setup

This chart comes from the @DailyFXEDU twitter account. *

GBP/USD bounced off of the 200 period daily moving average presenting a possible bullish opportunity similar to the setup earlier in August.

​

GBP/USD dipped and then rallied off Mark Carney's first public speech as governor of the Bank of England. *DailyFX Analyst Christopher Vecchio summed up the results of today's speech:

THE TAKEAWAY: Governor Mark Carney’s first public speech as Bank of England chief > Emphasizes improving economic recovery contingent on credit growth > BoE intends to keep rates low even if data improves > GBPUSD BULLISH​

 

[Jason Rogers]

US Dollar Turnaround the Real Deal. That's the headline from today's weekly SSI release.

For the EUR/USD, David Rodriguez said that it’s been a slow process, but we think the Euro set a substantial top as forex crowd short positions hit a record. The recent pullback in both price and retail forex sentiment confirms the turnaround.

You can see from the below chart how short positions hit a record in July and since then the pair has been pulling back.

The DailyFX PLUS Trading Signals currently has a short signal open for EUR/USD, but the market is trading right at the bottom of the entry zone at 1.32484.

 

[Jason Rogers]

Check out next week's economic calendar, it's a big one.

Next week should be an action packed week for the forex market according to the DailyFX economic calendar. Here's a look at the events ranked HIGH in importance. It includes 5 central bank rate decisions, Australia GDP, US Non-Farm Payroll, and a whole lot more:

 

[Jason Rogers]

GBP/JPY trading near channel top

John Kicklighter, chief strategist at DailyFX.com, recently tweeted about how GBP/JPY is trading near a channel top. He's considering entering a short position at 154.25 with a stop 100 pips higher at 155.25.

A limit order near the channel bottom around 150.25 would give this trade a 1:4 risk/reward ratio. To keep up with all his latest trade ideas, you can follow John Kicklighter on Twitter @JohnKicklighter

 

[Jason Rogers]

Emerging Markets: South African Rand

Last month Morgan Stanley analysts dubbed Brazil, Indonesia, India, Turkey and South Africa as the Fragile Five saying "Their currencies will be held back by high inflation, large current-account deficits, challenging capital-flow prospects and potentially weak emerging-market growth."

source: MarketWatch​

Indeed, these headwinds have caused the Fragile Five currencies to take a hit over the past few months, with the US Dollar rising to all-time highs relative to the Indian Rupee (INR). DailyFX senior technical strategist Jamie Saettele now sees possible signs of a reversal for at least one of the Fragile Five, namely the South African Rand (ZAR):

"A head and shoulders top from 8/21 may be unfolding with a weak right shoulder. Below 10.15 would trigger the breakdown."

If USD/ZAR breaks below 10.15, stop losses could be set above the head and right shoulder at 10.50635 and 10.36680 respectively. Profit targets could be set around support levels set back in July and August at 9.61220 and 9.72860 respectively.

 

[Jason Rogers]

Japanese Yen Poised for Major Move Lower

The weekly update of our Speculative Sentiment Index (SSI) was just published on DailyFX.com

It shows that Japanese Yen buying has surged versus the British Pound.

In fact, forex retail crowds are now their most net-short GBP/JPY in over 2 years.

Since SSI is a contrarian indicator, this is a strong bullish signal for GBP/JPY.

The Momentum1 trading strategy on DailyFXplus.com has just given a signal to buy the pair at current levels with a trailing stop at 154.584

 

[Jason Rogers]

US Dollar Tanks on August NFPs Miss Despite Unemployment Drop - Again

The US unemployment rate dropped to 7.3% when it was expected to remain unchanged at 7.4%, but the US Dollar still tanked on the news. That's because the main reason for the drop was a shrinking labor force as the participation rate fell to its lowest since August 1978. The headline figure at +169K was also below expectations.

Past performance is not necessarily indicative of future results.​

Looking for opportunities to short the US Dollar, we can see that since the NFP announcment, the Tidal Shift Strategy on DailyFX PLUS just bought GBP/USD at current levels with a trailing stop set at 1.55333. The signal was issued because our Speculative Sentiment Index (SSI) has hit its most extreme negative level for the past 145 trading hours at -2.1218, which suggests that the GBPUSD could be trending upwards.

The Tidal Shift Strategy can be automated on FXCM Trading Station accounts by logging into the Mirror Trader platform with the account username and password.

 

[Jason Rogers]

Trade Setup for GBP/SEK

The Momentum1 trading strategy on DailyFXplus.com has just given a signal to buy the pair at current levels with a trailing stop at 154.584

The DailyFX PLUS trading signal from last Thursday to buy GBP/JPY has worked out well so far. In fact, the British Pound continues to look strong across the board. This morning DailyFX analyst Alejandro Zambrano tweeted about his latest trade idea to go long the currency versus the Swedish Krona (SEK).

GBP/SEK 30-Minute Chart

Past performance is not necessarily indicative of future results.​

According to him "A correction to 1.3850 will most likely be used by traders to enter new long positions. We should be able to reach 1.44 which is the prior high as long as we trade above 10.35". To always receive his latest trade ideas, you can follow Alejandro Zambrano on Twitter @AlejandroDFX

 

[Jason Rogers]

Mirror Trader strategy for S&P 500

In addition to the DailyFX trading signals, the Mirror Trader platform lets you see signals from hundreds of third-party trading strategies and not just for currencies. For example, FXcn1985.cn is a strategy that trades the SPX500, a CFD based on the S&P 500 index.

Past performance is not necessarily indicative of future results​

While past performance is not necessarily indicative of future results, the strategy currently has a T-Score of 9.72 (on a scale of 1 to 10) meaning that according to Mirror Trader's unique scoring method, it has a high relevancy to current market conditions, which may be of interest to people following the US stock market.

Past performance is not necessarily indicative of future results​

If you have a live FXCM account, you can use your Trading Station login to access the Mirror Trader platform. From there you can choose this strategy or others for automation or semi-automation. With automation, trades are automatically placed in your account. With semi-automation, you receive an alert when a trading signal is generated, so can decide then whether you want to mirror the trade in your account.

 

[Jason Rogers]

Dollar gains vs. yen on easing Syria tensions

In the past, we've seen USD/JPY drop as tensions have escalated regarding Syria, because the Japenese yen is seen as a safe haven when traders are risk averse. So it makes sense that today with possible signs of progress to avoid military conflict, the US dollar is gaining strongly versus the yen.

Past performance is not necessarily indicative of future results.​

USD/JPY is already up 100 pips for the day, but according to our Speculative Sentiment Index (SSI) it could climb further. The Tidal Shift Strategy on DailyFXplus.com has just bought USD/JPY at current levels with a trailing stop set at 99.673.

Past performance is not necessarily indicative of future results.​

The signal was issued because SSI has hit its most extreme negative level for the past 145 trading hours at 1.352, which suggests that the USD/JPY could be trending upwards. The Tidal Shift Strategy can be automated on your FXCM account by logging into the Mirror Trader platform with your Trading Station username and password.

 

[Jason Rogers]

SSI: GBP/USD Takes out Highs and at Potential Sentiment Extreme

Positive employment data out of the UK sent cable (GBP/USD) to its highest levels in seven months. We use our Speculative Sentiment Index (SSI) as a contrarian indicator to price action, and the fact that the majority of traders are short gives signal that GBP/USD may continue higher.

Past performance is not necessarily indicative of future results.​

The latest SSI readings on DailyFXplus.com show that the ratio of long to short positions in GBP/USD stands at -2.77 as 27% of traders are long.

Past performance is not necessarily indicative of future results.​

Yesterday the ratio was -2.56; 28% of open positions were long. Long positions are 4.4% lower than yesterday and 5.3% below levels seen last week. Short positions are 3.4% higher than yesterday and 53.6% above levels seen last week.

Past performance is not necessarily indicative of future results.​

The trading crowd has grown further net-short from yesterday and last week. The combination of current sentiment and recent changes gives a further bullish trading bias.

Past performance is not necessarily indicative of future results.

It's no surprise then that two SSI-based trading signals (Breakout2 and Momentum2) are currently holding long positions in GBP/USD. Both of these trading signals are available as automated strategies at FXCMapps.com

 

[Jason Rogers]

Japanese Yen Likely to Continue Lower for this Reason

Retail forex traders are their most heavily long the Japanese Yen versus the British Pound (short GBP/JPY) since 2011, and very heavily one-sided sentiment leaves DailyFX quantitative strategist David Rodriguez in favor of further Yen weakness across the board.

Past performance is not necessarily indicative of future results.​

The graph above shows the power of the Speculative Sentiment Index (SSI) as a contrarian indicator. Notice how GBP/JPY has traditionally risen when traders are net short (when SSI is negative).

Past performance is not necessarily indicative of future results.​

Currently, the ratio of long to short positions in GBP/JPY stands at -3.86 (meaning there are 3.86 short positions for every 1 long position) as 21% of traders are long. Since we use our SSI as a contrarian indicator to price action, the fact that the majority of traders are short gives signal that GBP/JPY may continue higher.

Past performance is not necessarily indicative of future results.​

If a long position was entered at current levels, then the stop could be placed below support at 154.123 with profit targets around the Fibonacci extension levels at 159.411 and 162.762.

 

[Jason Rogers]

Possible signal to buy UK Oil

UK Oil is the CFD that tracks Brent Crude, and this morning the DailyFX education team tweeted about a possible signal to buy. The price has bounced off support while stochastics have crossed above 20.

Their trade setup calls for an entry order to buy placed at 111.85 with a limit at 114.96 and a stop at 110.20. To always receive their latest trade ideas, you can follow the DailyFX education team on Twitter @DailyFXedu

 

[Jason Rogers]

Update on Fed Chief Shopping Lands USDollar in a Gap

The Dow Jones FXCM Dollar Index (ticker: USDollar) set a significant 58 point gap between Friday’s close and Monday’s open, following a weekend headline that Lawrence Summers withdrew his bid to take over as Fed Chairman in January.

USDollar 15-Minute 08:00 09/13 to 08:00 09/16 EST

Past performance is not necessarily indicative of future results.​

Summers was considered to be the frontrunner against the more-dovish candidate Janet Yellen. Therefore, news that Summers was no longer in the running for the position weakened the US Dollar against the major currencies, particularly the Australian dollar.

Past performance is not necessarily indicative of future results.​

If a long position was entered in AUD/USD at current levels, then a stop could be set below 0.92717 where the market was trading before the weekend gap. A profit target could be set around 0.95094, the 38.2% Fibonacci retracement level for the high set back in April.

 

[Jason Rogers]

Housing, TIC Data give USD boost before FOMC

The flat print of 58 on the NAHB Housing Market Index (the highest seen since 2005) confirmed resilience in the US housing market despite rises in mortgage rates by almost an entire percent since May.

Past performance is not necessarily indicative of future results.​

This sent the US dollar even higher after Net Long-term TIC Flows for July gave the greenback a boost following the US open earlier. Foreign investors piled into Treasuries during the month of July with the net Long-term TIC Flows posting a positive print for the first time since January.

Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) (5-Minute Chart)

Past performance is not necessarily indicative of future results.​

Despite the positive news for the US dollar today, the gains could be temporary. The latest readings from the Speculative Sentiment Index (SSI) show that traders are long US dollars across the board. Since SSI is a contrarian indicator, this is a strong signal to short USD.

Past performance is not necessarily indicative of future results.

Traders are particularly long the USD/CAD pair, so it's understandable that the sentiment-based Breakout2 strategy has just given a trading signal to short the pair at current levels.

FXCM accounts can automate this strategy by using the Mirror Trader platform. You can access Mirror Trader with the same login and password you use for Trading Station.

 

[Jason Rogers]

SSI: Retail Crowds Remain Heavily Long USD Ahead of FOMC Decision

Most major currency pairs have remained in a tight range as traders await this afternoon's FOMC announcement. In times like this, the Speculative Sentiment Index (SSI) can be especially useful in providing insight. As you can see below, traders are long the US dollar across the board and have recently increased their long USD positions against the British Pound in particular.

Past performance is not necessarily indicative of future results.

Cable (GBP/USD) stands at -3.69 as 79% of traders are short. Short positions are 7.3% higher than yesterday and 21.8% above levels seen last week. SSI is used as a contrarian indicator to price action, and the combination of current sentiment and recent changes gives the pair a bullish bias going into FOMC.

Past performance is not necessarily indicative of future results.

That means even if the FOMC announcement is bullish for the US dollar and therefore bearish for GBP/USD, the downside for a long position might be muted and the effects temporary. On the flip side, if the FOMC announcement is bearish for US dollar, that could be just the catalyst that is need to drive cable higher.

Past performance is not necessarily indicative of future results.

The SSI-based Breakout2 strategy on DailyFX PLUS is currently giving a trading signal to buy GBP/USD at current levels. Breakout2 trading signals are available as one of the automated strategies at FXCMapps.com

 

[Jason Rogers]

Dollar Plunging as Fed Fails to Taper, Keeps Rates Near Zero for Longer

Just an update on my previous post. The US Federal Reserve shocked markets as it unexpectedly left the pace of its Quantitative Easing purchases unchanged through today’s meeting. Bloomberg estimates showed that most expected the FOMC to cut its monthly debt purchases by $5-$10 billion per month.

Dow Jones FXCM Dollar Index (ticker: USDOLLAR)

The clear disappointment led dollar sharply lower against all major currencies. This worked out well for the Breakout2 trading signal I mentioned in my previous post.

Past performance is not necessarily indicative of future results.

The trade is still open which is why it still appears on DailyFXplus.com, but the window of opportunity to enter the position has now passed. That is why the Action column below now says "Hold" instead of "Enter Now" as it said before the FOMC announcement.

 

[Jason Rogers]

Dollar Plummets but Little Relief in Sight as Sentiment Indicators Still Bearish

The latest weekly update of the Speculative Sentiment Index (SSI) on DailyFX.com, shows that despite the big sell-off in US dollars after yesterday's surprise FOMC decision not to taper QE, retail forex crowds continue buying aggressively into US dollar weakness.

Weekly Summary of Forex Trader Sentiment and Changes in Positioning

Past performance is not necessarily indicative of future results.​

Most striking is how SSI has become even more negative for SPX 500 which tracks the S&P 500 index. The latest reading is -6.28 which means that there are 6.28 traders who are short for every trader that's long.

Past performance is not necessarily indicative of future results.​

SSI is used as a contrarian indicator to price action, and the combination of current sentiment and recent changes gives SPX 500 further bullish bias.

Past performance is not necessarily indicative of future results.​

Prices broke through the 61.8% Fibonacci expansion at 1719.60 to set a new record high. Buyers now aim to challenge the 76.4% level at 1741.60, with a breach above that eyeing the 100% level at 1777.10. The 1719.60 mark has been recast as near-term support, followed by the August 2 high at 1709.60.

 

[Jason Rogers]

SSI Strategies Short AUD/USD as US Dollar Rebounds on Suggestion of October Fed Taper

The US Dollar rose this morning as voting Federal Open Market Committee member Bullard said a small taper is possible in October.The latest Speculative Sentiment Index (SSI) readings show that while retail traders are still long the US Dollar overall, they have reduced long positions since yesterday's surprise FOMC decision not to taper in September.

Past performance is not necessarily indicative of future results.​

While traders remain net long USD against most major currencies, they have flipped to being net short USD against the Australian dollar. SSI is a contrarian indicator to price action, and the fact that the majority of traders are long gives signal that the AUD/USD may continue lower.

Past performance is not necessarily indicative of future results.​

Two SSI-based strategies (Breakout2 and Momentum2) are currently giving signals to open short AUD/USD positions at current levels. The trading crowd has flipped from net-short to net-long from yesterday. The combination of current sentiment and recent changes gives a further bearish trading bias.

Past performance is not necessarily indicative of future results.

The Range2 strategy had already opened a short AUD/USD position 100 pip higher. While the trade is still open and floating a profit, the window of opportunity to get in on that trading signal has passed. That is why action column on for these trading signals says "Enter Now" for Breakout2 and Momentum2, but says "Hold" for Range2.

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