Ahead of today's release of the FOMC minutes it has been the commodity dollars that have reacted most strongly to a stronger USD, whilst eurodollar and cable have been contained to a very narrow trading range. It will be interesting to see whether these two laggards will play catch up once the minutes hit the news wires.
USD/JPY too has been contained with the pair cautiously approaching the 124 price point, but finding the 123.60 price level so far difficult to breach. For the USD/JPY it will be a case of the reaction in equities which will determine whether we see any further upwards momentum in this pair, as the market waits for clues as to the FED's intentions towards interest rates.
...
David and I delighted to announce the range of Quantum Trading indicators and apps are now available on Tradable, and both David and I are excited to be associated with such an innovative and dynamic company.
Tradable, available on Windows or Mac OS, has a unique interface which enables traders to download and arrange third party developed apps, providing them with all the information they need in one place to make informed trading decisions – including market charts, news flashes, social trading feeds – as well as powerful execution tools. Traders can utilise a series of applications built by other traders on a similar experience level, or create their own, bespoke tools (apps) inside Tradable. Tradable is an award winning, easy to use platform, aimed at intermediate and experienced traders. For more information, visit www.tradable.com
For a free trial of the new Quantum Trading tools, please visit http://quantumtrading.tradable.com/
...
Despite finding support at 1.0996 following last week's mauling eurodollar is struggling to hold onto the weak overnight gains. 15 min chart for the pair is particuarly revealing with a series of volatility candles triggered as the combination of the resistance at 1.1056 and the 100ma have been taken by traders as an excuse to sell.
Other euro pairs also taking a tumble include the EUR/GBP and EUR/CAD, the former sitting neatly on the VPOC on the 15 min timeframe which sits at the 0.7180 region, and any move through here could see the pair test support at 0.7168. Any move lower for the EUR/GBP cross is also benefiting from a move higher in cable.
...
Of the three commodity dollars, namely the Aussie, Kiwi and Loonie it is perhaps the Aussie which finally appears to be showing signs of a potential reversal from its oversold state on the slower time frames of our currency strength indicatort (the blue line). And of the Aussie pairs it is perhaps the AUD/USD and AUD/CAD which appear the most interesting.
Starting with the AUD/USD it was the failure in May to break through the resistance at 0.8160 which was the start of the its downards descent which saw the pair finally find some support at 0.6906 on the Friday before the Labor Day Holiday in the US. And whilst this level was tested once again last Monday, since then the AUD/USD has managed to claw its way back to 0.7138 at time of writing.
Such positive sentiment and similar price action can also be found on the daily chart of the AUD/CAD where the test of support at 0.9149 on the...
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.
...
During yesterday's overall market volatility the forex market posted some very interesting and intriguing price action and candle patterns, particularly with regard to the major pairs.
As a general rule of thumb whenever the market becomes agitated and adopts a 'risk off' mood traders and investors can expect a strong move into safe havens such as the US dollar and gold. However, as has been the case recently where we have seen a breakdown of correlations and traditional market relationships, the USD did not react as many would have expected.
A look across the daily charts of our 7 major pairs not only reveals this divergence, but also highlights the importance of understanding volatility, particularly with respect to its affect on the ATR of an instrument.
As we can see from the charts only three pairs escaped triggering a volatility candle, and these were the USD/CAD, the USD/CHF and Cable with the USD rising strongly in the first two pairs, but falling in...
Ahead of the release of the Monetary Policy Minutes from the RBA, and tomorrow's CPI number for the UK, it's been interesting to see how the Aussie and British pound have been behaving in today's trading session. And of the two currencies it has been the British pound which has seen some heavy selling against both the USD and the Aussie.
The hourly chart of the CSI (currency strength indicator) highlighted the extent to which the British pound was overbought, and Cable's failure to take out the resistance at 1.5688 signaled the start of a reversal in fortune for the pair and a move lower of over 100 pips. And it has only been a combination of the VPOC at 1.5585 and support at 1.5578 that has prevented any further move lower for Cable.
Moving to the GBP/AUD here too we have seen a move lower for the British pound with the pair eventually finding support at 2.1094 from which we have...
In all the brouhaha about Greece and the euro it's easy to forget what else is going on in the forex market. Sometimes I feel Greece is taking up too much space in traders' heads at the expense of other markets and currencies. And for a perfect example of what I mean look no further than the continued strength in GBP which has seen some great trends in GBP/NZD & GBP/CAD & I'm still waiting for the GBP/JPY to turn lower, but only once we see a major reversal in risk sentiment.
On both charts the NinjaTrader trend monitor has remained firmly bullish with only a minor transition on the GBP/CAD reflecting the recent pause in the longer term trend. However, moving to the NinjaTrader currency strength indicator to the left of the chart, here we can see that the British Pound, the yellow line, is now moving ever deeper into the oversold region on the daily timeframe, so this trend...
The overnight fall in the Nikkei 225 of 1.76% has resulted in an impressive two bar reversal (aka a shooting star) on the daily chart for the USD/JPY - so no surprise to see the pair move lower in this morning's trading session.
What is perhaps more significant is this move in the JPY is not consistent across the JPY pairs we follow on our matrix, and in particular the EUR/JPY and GBP/JPY. The latter is a pair I am looking to short on a longer term basis, but patience is required not least because I want to see the JPY begin to move away from the bottom (oversold) on the currency strength indicator. This also highlights a key aspect of forex trading, namely individual currencies can stay overbought or oversold for much longer than we expect. Much, of course, will depend on risk sentiment, and in particular whether the current downwards trend in equities continues, and if so then we...
Once GBP data is out of the way we can then look forward to the unemployment claims in the US and the Ivey PMI from Canada. Both items are released at the same time & here expect to see the biggest reaction in the USD/CAD. On the daily chart for the pair the resistance in the 1.2470 - 1.25 region (which also coincides with the VPOC), is putting a temporary brake on any move higher. On our daily currency strength indicator we do appear to have more downside for the CAD, particularly against the euro where we recently had a strong move away from the resistance in the 1.38 region.
As always the Canadian dollar will also reflect price trends for oil, and with OPEC now set on a collision course with the alternative energy suppliers in an overt price war, oil prices look set to remain low for years to come. Indeed OPEC themselves have publicly stated that oil will...
