My FX Journal - 80% Fundamental 20% Technical

[Brumby]

Are you getting that data from eikon or somewhere else?

It was from a Reuters report. My subscription is to FX only,not the full suite. I agree Elkon has its usefulness but so is Ransquawk.

Anyway it is definitely looking slim at the moment for Cad hike. Price is holding steady and I am looking to get back in on a retrace for another run at the high.

I believe it was 48 % before the BOC statement and now is less than 30 %.

I slept through the action and like you I am looking for a retrace. Typically strong moves like this briefly retrace and then channel up provided it still has another leg to the momentum. I need to see the market build some technical price structure to trade. The fundamentals has done its job and now the next leg (if there is one) is pure technical trading

You have any thoughts on the ecb tomorrow? I will be looking at any dovish tone that kicks a rate hike ball further down the road. There was a comment today from the ecb about them extending the tapering at the same amount with the usual keeping it open until further notice theme.

I will do the research today on how I might trade ECB. I think the market focus seems to be on the size of the tapering and duration. The range is 40 to 20 Billion Euro.

In other news i see North Korea have again threatened an above Pacific nuke test stating its going to happen. That's going to be a huge risk off event and I am probably going to split a trade between yen and swissy just in case yen underperforms due to its location to NK

That explains the drop. I got out of my USDJPY trade last night on the spike. With hindsight it looks like I got out at the top.
That also explains why my GBPJPY limit buy got triggered. That helped me to pick up another 20 pips which I closed when I woke up as I did not like the retrace price structure. It looks like there is another down leg to it.

Account is growing, some way to go still until I can pump the account with more capital but seems to be headed in the right direction.

Fundamentals and Technical is the way to go. I am confident you will meet yourgoal.

 

[Brumby]

Preliminary thoughts on ECB.

If hawkish, buy EUR against either NZD/CAD/AUD

Stay out of JPY as fatty Kim might anytime lob a spanner.

If dovish, sell EURUSD. I can't think of another pair that might fit the bill

There was an article yesterday in Forexlive that outlined the different tapering scenarios in summary form. I am trying to find it and will post it if I can locate it.

 

[Brumby]

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[FXX]

Morning

Just mulling the durable goods numbers yesterday and wondering if they are a false positive off the back of hurricane distruction. Yesterday the snp had the largest down day in a while so I am going to be watching those markets a little more today.

Will be doing my assessment of pairing for eu in the next hour and will post the list. I want to spend some time on the last statement and data points since.

 

[FXX]

Trade watch for the morning

Off the back of yesterday I have the following on my watch list:

GBPCAD

No UK or Canada data out today so looking to continue sentiment and buy any pullbacks for a session trade.

USDCAD

No sentiment changing data out today but will keep an eye out for news relating to the Feds new captain. Unless related info comes out to change sentiment I will be looking to continue yesterdays sentiment on a pullback

ECB

Notes from last statement:

- inflation will gradually head to levels in line with its inflation aim, it has yet to translate sufficiently into stronger inflation dynamics.

- the recent volatility in the exchange rate represents a source of uncertainty which requires monitoring with regard to its possible implications for the medium-term outlook for price stability

- Measures of underlying inflation have ticked up slightly in recent months but, overall, remain at subdued levels. Therefore, a very substantial degree of monetary accommodation is still needed for underlying inflation pressures to gradually build up and support headline inflation developments in the medium term.

Notes on data since last statement:

- unemployment rate unchanged
- inflation rate unchanged
- inflation m/m 0.1 uptick from last reading (not really much of an improvement)
- core cpi index (negligible uptick)
- core inflation rate is down 0.1
- trade balance down
- exports down
- manufacturing pmi marginal uptick
- services pmi marginal down tick
- retail sales down
- construction and housing down

expectations are the ECB will lower bond purchases to 30bln and extend to Sept 2018

In agreement with you Brumby with your EU counterparts. My order preference for hawkish tone is:

CAD
ZAR
NZD
AUS - last in the list as sentiment of that CPI is aging

neutral tone - wont trade EU (where my bias is at the moment)

dovish tone my pair list is:

USD
GBP

 

[Brumby]

Fresh data that just came out in the last couple of hours which generated some negative sentiments on the following currencies :

GBP
ONS survey released shows a 0.4% decline in full time workers inflation adjusted weekly earnings. This probably caused the 80 pips price drop on the GBPUSD.
AUD
RBA Ass. Governor Debelle' speech that CPI probably overstated by 0.25 ppt due to index re-weightings. This caused a 30 pips drop on the AUDUSD but prices had since recovered.

 

[FXX]

Fresh data that just came out in the last couple of hours which generated some negative sentiments on the following currencies :

GBP
ONS survey released shows a 0.4% decline in full time workers inflation adjusted weekly earnings. This probably caused the 80 pips price drop on the GBPUSD.
AUD
RBA Ass. Governor Debelle' speech that CPI probably overstated by 0.25 ppt due to index re-weightings. This caused a 30 pips drop on the AUDUSD but prices had since recovered.

I think the BOE rate hike is warranted to assist the negative effects of the currency devaluation. Other RBA data : Debelle said they are alert to the risk of wages remaining subdued even though slack is reduced.

 

[FXX]

GBPCAD retraced to a nice level to retest the highs again. Not too phased by the ONS survey

 

[Brumby]

ECB statement is dovish because APP program is open ended.

 

[FXX]

The peculiar thing is they have always had the open ended clause in their statements. Since announcing tapering it was always "as long as necessary" and "beyond the horizon" so it is much of the same here and i think we might get a dovish stance from Dragi to try and moderate the currency strength risk. I think I will take a cautious stance and look to take a short on a retrace if that happens. I want to see how price reacts to current levels.

 

[FXX]

See the Fed fxlive story- down to 2 candidates

 

[FXX]

might set a breakout order on usdcad - retrace looking less likely

 

[FXX]

positive UK news - Boris Johnson has unilaterally declared to EU citizens living in the UK that “your rights will be protected whatever happens” after Brexit.

 

[FXX]

interesting twist - Draghi "Decision wasn't unanimous"

That's hawkish leaving EURO in no-mans land

 

[FXX]

Tone turning more dovish for euro now following further ECB comments. This could be a good partial unwind of the build up to this event making it a multi session opportunity. Looking to target 1.5500 zone

 

[FXX]

order to sell EURUSD @ 1.7456
@Edit : changed to 1.7379

 

[piphoe]

order to sell EURUSD @ 1.7456

i just bought a small position @ 1720

 

[FXX]

i just bought a small position @ 1720

tough call buying in this sentiment

 

[FXX]

bought a dip in USDZAR for another test of the high @14.13000

 

[FXX]

bought a dip in USDZAR for another test of the high @14.13000

Closed for 30 pips