Aussie Waits on RBA
The Aussie dollar waits on RBA decisions. Rate holds or changes drive volatility. Traders watch closely for clues on monetary policy. This often sets the tone for AUD pairs.
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.
Further Gains
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...
Bears Take Hold of Cable
Bears take hold of cable in recent sessions. GBP/USD falls sharply. Selling pressure dominates. This creates strong downside momentum. Traders spot short opportunities in the pound against dollar.
Today's reversal in cable has once again taken the pair back to the VPOC (volume point of control) support which sits in the 1.5573 price region. This price area is where cable has been rotating since early July, and despite what appeared to be a decisive break away on Monday when cable touched a high of 1.5803, yesterday's down candle has had the effect of creating a classic two bar reversal. Therefore, no surprise to see the resulting fall in today's trading session where cable has fallen over 200 pips.
Today's price action has not only taken cable below the VPOC for the first time since early August but also seen a break through the 100 ma, and with today's move supported with good volume the next stop for cable...
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...
We have four central banks on today's trading horizon, BOJ, RBA, BOE & later this evening we have interest rate decision, policy statement and a press conference from the RBNZ. I really must come up with a collective noun for the CB's! In between we have the Manufacturing Number for the UK where forecast is for 0.1% against a previous of 0.4%. This release can be very difficult to judge as there has been no clear trend since 2009 when the number was consistently awful. On the GBP matrix we have seen some strong buying of GBP against USD, which is not surprising given the alleged Obama comments at the G7.
However, GBP buying actually started last week after NFP. It was the deep lower wick to Friday's candle which signaled a potential reversal for cable. This was given further impetus on Monday, & the buying was cemented as yesterday's candle ended the session with an even deeper lower wick. The current daily chart...
Aussie Dollar Now in Sharp Focus Ahead of Trade Balance
The Aussie dollar is now in sharp focus ahead of Trade Balance data. This release measures exports vs imports. Strong figures boost AUD. Weak ones pressure it. Traders watch closely for commodity currency clues.
If you come along to our forex webinars you will always hear David & I explain the importance of the fundamental news & how easy it is to be ambushed by 'events'. But I must admit so far it's been absolutely relentless & it's only Wednesday! Coming up we have Aussie retail sales & Trade Balance - both very important numbers, and so far it's been a buy of the Aussie except against the euro - a trade we've been following. Of the two releases - the Trade Balance number has been negative since July last year, and whilst February's number was encouraging, coming in at -0.44b against a forecast of -0.85b, the subsequent releases have been dire.
Tonight's...
EUR/USD Turns Bearish Moving Through the VPOC
EUR/USD turns bearish moving through the VPOC. This key level acted as support. Price broke lower with conviction. Volume price analysis (VPA) confirmed the shift to downside momentum.
The EUR/USD continues to look bearish as it sits on support between 1.0885 & 1.0890 & just below the VPOC the yellow line on the volume point of control indicator. This level has now been breached on good volume and should take the pair to 1.0863. In addition the trend monitor has also transitioned from blue to red and with the US unemployment data coming up shortly, this could provide further downwards momentum if the numbers are on target or better than expected.
The forecast this time around is 271k against a previous of 274k and whilst this is an important number it is the backwash from Janet Yellen's US dollar positive comments which continue to drive the US dollar higher, coupled as always with ongoing concerns over the...
USD Weakness Continues to Drive Cable
USD weakness continues to drive Cable higher. GBP/USD rallies steadily. This reflects dollar selling pressure. Traders see bullish momentum in the pound against the greenback.
Cable selling off sharply on the back of poor GDP figure falling to a low of 1.5176, but recovering sharply and back over key support at 1.5220, and with USD continuing to look weak no reason why it cable can't continue higher. It has already touched 1.5260 & beyond this price level we are then looking at 1.53 and beyond.
This afternoon we have the CB consumer confidence release at 2.00 pm London. USD weakness has also played its part in these moves.
USD index is now the one to watch - running into the release and also ahead of tomorrow's FOMC.
Volume Price Analysis Confirmation
Volume price analysis (VPA) confirms the drive. Rising prices with increasing volume show buying conviction. Low volume pullbacks signal weakness in sellers. Quantum currency strength indicator ranks GBP high...
Ahead of the manufacturing production number the British pound has been particularly lively in the past couple of hours with 6 volatility candles alone being triggered on Cable on the 3 min chart.
For Cable, yesterday's rally which saw the pair bounce off support in the 1.4760 region was a move more akin to a 'dead cat bounce' as once the pair hit the major resistance at 1.4840 at the start of the US session opened the floodgates for some heavy duty selling. This took cable down 1.4684 before it finally managed to find some support as the market moved into Asia.
A number of reasons have been suggested for this move, including the tensions and uncertainty surrounding the upcoming UK election, and as highlighted yesterday, we are seeing a major sell off in UK gilts. In the face of such uncertainty It appears foreign investors would much rather move their money into US Treasuries and Asia, and Japanese investors in particular...
NinjaTrader Launches Forex Brokerage
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Question
Hi Anna, Firstly, I just wanted to say I've just finished "Forex For Beginners" and I thoroughly enjoyed the book; I found it extremely helpful and useful. Opened my first forex account on Friday of last week. Made some mistakes at first, lacked the discipline to follow my strategy, I think I was a tad over-keen to trade at first. I've just purchased "A Complete Guide to VPA" so I'll start on that tonight.
I have a quick question though if you wouldn't mind answering. In Forex for Beginners, you use the Currency Strength Indicator to look for potential indicators of an upcoming reversal. And then from this, you use the currency matrix and analysis to confirm the reversal. I was just wondering if you could use the same strategy to indicate a continuing trend? If this is explained in the book I've just purchased I apologise, I just thought I'd ask.
For Example
For example, if both the Aus and Usd are...
