Aussie waits on RBA

by Quantum Trading Comment Closed
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...
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Aussie finding some bullish momentum

by Quantum Trading Comment Closed
Aussie Finding Some Bullish Momentum The Aussie is finding some bullish momentum recently. AUD pairs push higher. This reflects renewed buying interest. Commodity links and risk sentiment support the move. Traders spot opportunities in AUD crosses. 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 AUD/USD 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...
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Bearish sentiment continues for eurodollar

by Quantum Trading Comment Closed
The release of slightly better than expected preliminary GDP and unemployment claims for the US did manage to add some bearish momentum to the eurodollar before it found support at 1.2525 from where it has been attempting to rally higher. It goes without saying this level needs to be taken out for the pair to continue lower. However, what is also significant on the 30 min and hourly chart is that this price point marks the low of the volatility candles which were triggered at the time of the news releases. A trigger of such a candle - in other words a candle which is outside the ATR for the instrument in question - often results in the price action simply retreating within the spread of the candle. At time of writing the pair is once again approaching the 1.1225 price point and if taken out should see the pair move to test the next level of support at 1.1213. The good...
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Forget the euro, look at the British pound!

by Quantum Trading Comment Closed
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...
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Central banks and GBP centre stage on currency matrix

by Quantum Trading Comment Closed
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...
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The yen currency matrix in focus as equities fall

by Quantum Trading Comment Closed
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...
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USD/CAD now testing key VPOC level

by Quantum Trading Comment Closed
USD/CAD Now Testing Key VPOC Level USD/CAD is now testing a key Volume Point of Control (VPOC) level. VPOC marks the price with highest traded volume. It acts as strong support or resistance. Price often reacts here with bounces or breaks. 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,...
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Aussie dollar now in sharp focus ahead of Trade Balance

by Quantum Trading Comment Closed
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...
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EUR/NZD reverses recent trend for the New Zealand dollar

by Quantum Trading Comment Closed
EUR/NZD Reverses Recent Trend for the New Zealand Dollar EUR/NZD reverses the recent trend for the New Zealand dollar. This cross pair shows shifting momentum. NZD weakness fades. Euro gains relational strength. Traders spot potential upside in EUR/NZD. The EUR/NZD has delivered some excellent trading opportunities across all the timeframes this morning to the short side, following the recent heavily bearish sentiment towards the New Zealand dollar which has seen it weaken against all the major currencies. Indeed longer term the NZD is now looking increasingly oversold, so we may see this trend reflected on the slower timeframe charts in due course. This Morning's Move This morning's move was signalled initially with a move below the volume point of control (VPOC) on the 30-minute chart ( the yellow line), a move that was duly supported with rising volume and confirming the bearish sentiment. In addition, the transition in the trend monitor indicator from blue to red also confirmed this reversal, coupled with a pivot...
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EUR/USD turns bearish moving through the VPOC

by Quantum Trading Comment Closed
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...
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