Watching the euro

by Quantum Trading Comment Closed
Following last week's turbulent price action, no surprise that today the markets have been a litte muted with the added bonus the Shanghai Composite only fell 5% in overnight trading. And with Japan closed for it's annual Coming of Age Holiday even the Nikkei could take a day off! Meantime last Friday the euro was the currency to watch as it ended the trading week on a burst higher against most of its counterparts, and posting very positive candles on the daily charts. However, despite an early follow through today's trading session for the euro has been marked by some great trades to the short side, in particular against the USD, the Aussie, GBP, NZD & CAD. The euro daily matrix illustrates this perfectly with the eur/usd, eur/gbp/ & eur/aud all exhibiting similar price action. The exception had been the eur/nzd, but here too the euro appears to be moving back to test the VPOC (volume point of control) at 1.6420. Against the...
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Cable waits on PMI

by Quantum Trading Comment Closed
New trading month sees the usual crop of PMI releases. China has already reported today we have the numbers from Italy, Spain and France as well as the UK. Although UK economy is predominantly services based, the manufacturing number has been managing to hold above the key 50 level. From a technical perspective so far best move for GBP has been against the AUD with cable confined to a relatively tight range. However, we should start to see some movement once the PMI number has been released, and the new week gets under way. Interestingly cable on the daily chart is sitting neatly between the 200 & 100 mas....
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Euro tumbles on Draghi comments

by Quantum Trading Comment Closed
Mario Draghi's comments at the ECB conference regarding further stimulus has led to a dramatic fall in the euro across the board, and the eurodollar in particular. This weakness, however, was first signaled last week, and has been developing since the start of the trading week, and is a follow through from the two bar reversal posted on the daily chart. Today's price action on the eurodollar daily chart has resulted in a volatility candle being triggered given the extreme move, and if there is no follow through, then it should be surprise to see the price action simply retreat to within the spread of today's candle. In addition today's price move has seen the eurodollar move back through the volume point of control. ...
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Aussie waits on RBA

by Quantum Trading Comment Closed
Some really nice two way price action on the Aussie complex which started overnight on the release of Chinese data, namely GDP, the Industrial Production and the Fixed Asset Investment numbers. The hourly chart for the complex clearly shows volatility candles being triggered across the board (as denoted by the purple arrows), with the Aussie rising sharply before moving back inside the spread of the volatility candle. This momentum was also signaled on the currency strength indicator before the currency moved into a consolidation phase in the transition to the European and London sessions. There were further gains for the Aussie in the morning session, until bullish momemtum drained away which resulted in some great trades to the short side. These were particularly evident in the AUD/USD, GBP/AUD and AUD/NZD. The Aussie now faces another important item of fundamental news, specifically the RBA Monetary Policy Meeting Minutes which may give traders some indication of whether the central bank is likely to cut...
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Is AUD/USD finally preparing to reverse higher?

by Quantum Trading Comment Closed
The Aussiedollar weekly chart is another classic example of how patience can be richly rewarded following the extended congestion phase of March to August 2014 which saw the pair trade in an increasingly tighter range around the VPOC (volume point of control) in the 0.93 to 0.94 price area. This type of price action is always a signal of an explosive move once the breakaway occurs. And as we can see clearly on the chart this phase of price action came to a dramatic end with a wide spread down candle which triggered the volatility indicator (the purple arrows top and bottom), as the price action moved outside the average true range in this time frame. The price action to the downside was duly confirmed with a close well outside the volatility candle and further confirming the inherent weakness in the pair. Since last August the trend lower has also been perfectly confirmed and defined by the dynamic price pivots in a...
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Cable approaches key level

by Quantum Trading Comment Closed
Cable continues to remain very weak for the time being, and is now approaching the tipping point of a potential deeper move once we have a strong close below the psychological 1.50 price point, which is clearly marked on the weekly chart by the support and resistance indicator. At the same time the VPOC (volume point of control) is also weighing heavily on the pair, and should the above level be breached then a further cluster of support awaits below in the 1.48 region. Any failure here will see cable move into a low volume node in the 1.46 region, last seen in March this year from which cable managed to stage a sustained recovery.  ...
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Eurodollar continues to frustrate

by Quantum Trading Comment Closed
Eurodollar continues to frustrate traders, and it's easy to see why. Since the failure to breach 1.1713 the pair has retreated back into the range of the VPOC (volume point of control) in the 1.1170 region where it continues to remain waterlogged. With end of month and end of quarter position squaring we will have to wait to see whether eurodollar can finally break away from this region. From a technical perspective the heavy selling of 6 weeks ago is self evident with the extreme volume and deep upper wick to the candle telling their own story. Since then the pivots have helped to define the floor and ceiling of the congestion zone, and with volume now building on the VPOC histogram any move away is likely to be extreme and accompanied with strong participation. The key level to any move to the downside is 1.1128 where strong support awaits.  ...
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Eurodollar regains its bullish mojo

by Quantum Trading Comment Closed
At last Thursday's ECB press conference it was enough for Mario Draghi to hint at further QE for the eurodollar to sell off sharply, taking the pair from a high of 1.1243 before coming to rest at the support platform at in the 1.1087/96 region. This support platform was tested again on Friday as a degree of buying for the pair stepped in ahead of the Labor Day holiday in the US and Canada. And whilst the start of this week has seen relatively muted price action for eurodollar given Monday's holiday, the tone of this action has been overall bullish with each session threatening to take the pair through and away the volume point of control in the 1.1200 price region. This has materialised in today's trading session which has seen eurodollar move from a low of 1.1171 to trade, at time of writing at 1.1278. The 1.1171 low also coincided with the `100 ma which has also added its...
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Cable finally finds some support (& buyers!)

by Quantum Trading Comment Closed
Following longest fall since 2008 no surprise to see British pound and the 6B move higher in this morning's trading, on the back of profit taking and closure of US and Canadian markets for the Labor Day holiday. From a VPA (volume price analysis) perspective the recent move lower has also been associated with falling volume suggesting the downwards pressure is, for now, running out of steam, with the platform of support at 1.5160 providing the reason for the pullback. Longer term, however, the outlook remains bearish for Cable, and should the 1.5160 price point fall to hold we may see a move towards 1.50 and even a possible re-test of the 1.46 region in due course.  ...
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Aussie dollar continues lower

by Quantum Trading Comment Closed
As spot forex traders we sometimes forget the futures market can often help with market sentiment towards a currency and the daily chart for 6A, which is the contract for the Aussie dollar is particularly revealing. For the 6A,  it has been a return to business as usual over the last couple of weeks, since the breakaway from the VPOC at 0.7320 once again confirming the heavily bearish sentiment for the AUD. The initial break was on the 24th August where the wide spread down candle also triggered the volatility indicator, and as expected the price action moved back within the spread of the candle; a cynical move designed to trigger stops. Since then the candle has duly been confirmed with a rapid move through the low volume node on the VPOC indicator at 0.6980 with the pair now trading lower once again at 0.6934 in the London session. With the weight of transacted volume now sitting overhead in the 0.7320 price area and...
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