2 New Big Trade Orders 04.21.2016

Swing

2 New Big Trade Orders

**Since both of these orders involve NZD, if one triggers, cancel the other

GBP/NZD Order

Place Order to Sell GBP/NZD at 2.0710

Stop at 2.0910

NZD/USD Order

Place Order to Buy NZD/USD at 0.6890

Stop at 0.6690

We are finally getting a pullback in the commodity currencies that should give us the opportunity to join the uptrend in NZD. Between the surprise increase in consumer prices and rebound in dairy, the RBNZ has no reason to rush into a rate cut next week. A pullback to 69 cents would be a great place to establish a long entry for a move back to 70 cents. In an environment of extraordinarily low rates, NZ’s 2.25% yield has and will continue to make NZ attractive.

We also like SELLING GBP because data has been terrible. A larger number of people filed for jobless claims in the month of March and more importantly average weekly earnings growth slowed to 1.8% from 2.1% in February. Greater unemployment and slower wage growth is bad news for the U.K. economy and particularly for spending. Retail sales numbers are scheduled for release tomorrow and this slowdown in wage growth combined with the big drop in spending plus shop prices reported by the British Retail Consortium puts the risk to the downside for the report.

2 New Big Trade Orders 04.18.2016

Swing

2 New Big Trade Orders

New CAD/JPY Order

Place Order to Sell CAD/JPY at 84.80

Stop at 86.80

There are 2 reasons why we like selling CAD/JPY. First oil prices are falling following the disappointment in Doha and we believe this move could put additional pressure on oil and carve out a near term bottom in the Canadian dollar. We are also bearish US dollars and the continuous cycle of earthquakes in Japan makes us worried that more damage could hit the nation. Each tremor has led to a bout of yen strength and between our bearish outlook for the dollar and bullish outlook for the yen, we believe that the Yen component of the trade should also drive CAD/JPY down.

New USD/CHF Order

Place Order to Sell USD/CHF at 0.9680

Stop at 0.9880

Between last week’s surprise contraction in retail sales and sluggish consumer price growth, the Fed has zero reasons to raise interest rates in April AND June. At this stage we need to see retail sales rise more than 0.5% in each of the next 2 months for tightening at the beginning of the summer to even be a possibility. The Fed is meeting next week and there’s a very good chance that the overall tone of the statement will be dovish -- so we are looking for additional dollar weakness ahead and on the back of this event. The dollar remains a sell on rallies.

2 New Big Trade Orders for 02.01.2016

Swing

2 New Big Trade Orders

1. EUR/USD Orders

Aggressive

Place Order to SELL EUR/USD at 1.0918

Stop 1.1118

Conservative

Place Order to SELL EUR/USD at 1.1000

Stop 1.1200

We are starting the week with our FIRST new Big Trade Order to SELL EUR/USD. Mario Draghi is speaking later today and on Thursday. We believe that he will continue to jawbone the currency and reiterate the central bank’s willingness to increase stimulus. Investors are eager to see who will ease next and the ECB is on the top of our list. The currency war is in full swing with BoJ easing and while risk appetite improved, the ECB’s dovish bias will underpin the euro.

2. USD/JPY Orders

Aggressive

Place Order to BUY USD/JPY at 120.65

Stop 118.65

Conservative

Place Order to BUY USD/JPY at 119.85

Stop 117.85

Last week’s surprise decision to cut interest rates was a major announcement for the Bank of Japan -- one that we believe will have another 200 to 300 pips of continuation. Friday’s move stopped right at the 200-day SMA so a deeper retracement is possible and we want to use that opportunity to buy USD/JPY at a lower level. The BoJ not only lowered interest rates, but also pushed out their timeline for reaching their inflation target and warned that more actions could be taken including changing the quantity and quality of asset purchases as well as cutting rates further. Since the BoJ did not increase the size of its QE program this could be the next option if the economy weakens further but adopting this radical form of monetary policy is a sign of the country’s desperation. They are finally recognizing the negative impact that volatility in the financial markets, the sharp decline in inflation and the slowdown in China will have on Japan’s economy. Looking ahead, the yen should be sold on rallies.

BK Big Trades 01.25.2016 2 New Orders for EUR and AUD

Swing

BK Big Trades -- 2 New Orders

1. EUR/USD

Aggressive

Place Order to Sell EUR/USD at 1.0865

Stop 1.1065

Conservative

Place Order to Sell EUR/USD at 1.0920

Stop 1.1120

2. AUD/USD


Aggressive

Place Order to Sell AUD/USD at 0.7010

Stop 0.7210

Conservative

Place Order to Sell EUR/USD at 0.7100

Stop 0.7300

It is a new trading week and we are ready to lay out some fresh Forex Big Trade orders. Nearly all of the major currencies are in play this week with AU CPI, FOMC, RBNZ, BoJ and UK GDP on the calendar. This morning’s German IFO report was also worse than expected reinforcing ECB President Draghi’s warning that more easing could be on its way in March.

We are laying out 2 sets of orders this morning -- on the back of the IFO and ahead of AU CPI. We are also actively watching USD/JPY and USD/CAD -- 2 pairs that we want to sell higher.

We still have the following pending order:

3. NZD/USD

Conservative

Order to Sell NZD/USD at 0.6560

Stop at 0.6760

2 New Big Trades in GBP/USD and NZD/CAD

Swing

1. GBP/USD

Place Order to Buy 1 lot of GBP/USD at 1.5342

Place Order to Buy 1 more at 1.5152

Stop for ALL 1.4965

2. NZD/CAD

Place Order to Sell 1 lot NZD/CAD at 0.8960

Place Order to Sell 1 more at 0.9140

Stop for ALL at 0.9330


The most tempting currency to trade right now is EURO but with our Big Trades we never like a chase a move especially when there is no reasonable level for stops. So instead we look beyond the euro to 2 other opportunities -- GBP/USD and NZD/USD.

We like buying GBP/USD quite a bit after yesterday’s HOT retail sales number. This was the strongest month for spending in 2 years, setting a sound foundation for next week’s UK GDP report. Retail sales is the most important contributor to growth. While the dollar is bid today we believe it will trade lower ahead of and after FOMC. The uncertainty in Fed policy should lead to profit taking on long dollar trades and with zero chance of a rate hike, the FOMC statement will probably disappoint.

We also like selling NZD/CAD. China’s rate cut should be positive for commodity currencies but the impact has been limited. The RBNZ meets next week and they won’t be happy with the recent rise in NZD. In the past month, NZD/USD has risen from a low of 0.6250 to 69 cents while AUD/NZD has fallen from a high of 1.1350 to a low of 1.0575. We may hear some optimism about the economy but the central bank could also express renewed concerns about the currency. There are no major economic reports from Canada so selling NZD vs. CAD is the ideal trade.

BK – 2 New Big Trade Orders for USD/CAD and AUD/USD

Swing

BK Big Trade -- 2 New Orders

Reload USD/CAD

Place Order to Buy 1 lot USD/CAD at 1.2965

Place Order to Buy 1 More at 1.2790

Stop for ALL at 1.2610

If USD/CAD retraces again, we want to be a buyer. The Bank of Canada’s monetary policy announcement is one of the biggest event risks this week and given the recent deterioration in manufacturing activity, ballooning of the trade balance, and the rise in the unemployment rate, the BoC has every reason to be dovish. At the same time, the U.S. dollar is oversold and we believe that it is due for a bounce during this quiet data week.

New AUD/USD Big Trade Orders

Place Order to Sell 1 lot AUD/USD at 0.7280

Place Order to Sell 1 more lot AUD/USD at 0.7480

Stop for ALL 0.7650

We also like selling Australian dollars because the market is looking for the RBA to cut interest rates when they meet next month. While last night’s Chinese data beat expectations, the sharp drop in industrial production tells us that Chinese demand remains weak. Between that and the drop in jobs experienced last month along with the slowdown in service sector activity and appreciation in the currency, the RBA has every reason to be more dovish. The RBA minutes are scheduled for release this evening and if they are more cautious than the monetary policy statement, it could accelerate the losses in AUD

Here are our LIVE Trades

1. USD/JPY

Place Order to Buy 1 lot USD/JPY at 120.32 TRIGGERED

Place Order to Buy 1 More at 118.64 TRIGGERED

AVERAGE IS 119.48

Stop for ALL at 116.72

2. EUR/USD

Place Order to Sell 1 Lot EUR/USD at 1.1370 TRIGGERED

Place Order to Sell1 More at 1.1570

Stop for ALL 1.1778

BK 2 New Big Trade Orders 09.22.2015 USDJPY & GBPJPY

Swing

**Cancel EUR/GBP & EUR/USD Orders. 2 New Big Trade Orders

1. USD/JPY

Place Order to Buy 1 Lot USD/JPY at 119.47

Pending Order to Buy 1 More Lot at 117.70

Stop for ALL at 116.00

2. GBP/JPY

Place Order to Buy 1 Lot USD/JPY at 183.60

Pending Order to Buy 1 More Lot at 181.70

Stop for ALL at 179.70

The decline in U.S. equities this morning has taken many of the major currencies lower and we are hoping that the pullback will be extensive enough for us to reestablish our long dollar and short yen trades. While the market was disappointed by the Federal Reserve’s decision to leave rates unchanged, recent comments from U.S. officials indicate that most policymakers are still planning for a rate hike this year. We have been looking for USD/JPY to pullback and use that opportunity to reload our long dollar positions. There are no major U.S. economic reports this week but a recovery in USD/JPY could be driven by Japanese data.

Japanese markets are closed until Thursday but when they open, Japan is expected to report that core inflation fell below zero for the first time since April 2013. Between this “bad news” and S&P’s recent downgrade of Japan, a further slide in the Yen is likely. For this reason, we like SELLING JPY versus the USD and GBP. If the Fed maintains its view that rates will rise this year, the market will also maintain its view that the BoE could raise rates in early 2016. Hawkish comments from UK policymakers in the face of weaker data indicates that policymakers are are open to the idea.

BK Big Trades – 2 New Post FOMC Orders

Swing

BK Big Trades – 2 New Post FOMC Orders

1. USD/CAD

Place Order to Sell 1 Lot USD/CAD at 1.3127

Place Order to Sell1 More at 1.3280

Stop for ALL 1.3480

2. EUR/USD

Place Order to Sell 1 Lot EUR/USD at 1.1470

Place Order to Sell1 More at 1.1670

Stop for ALL 1.1790

We are laying out 2 Big Trade orders post FOMC. The Federal Reserve left interest rates unchanged today, citing uncertainty abroad and slightly softer inflation, which is bearish for the U.S. dollar but as Yellen indicated, recent developments have not fundamentally altered their outlook for the U.S. economy. She said every meeting is a live meeting and an unscheduled press conference could be held in October if needed. We don’t believe that will happen but December remains a strong possibility for a hike. We like selling USD/CAD in the near term because the lack of a rate hike could cause additional weakness in the dollar and lift oil prices. This “risk on” sentiment should drive USD/CAD to 1.3000 especially if Friday’s CPI report surprises to the upside like we anticipate. We like laying out orders higher to sell EUR/USD because ECB officials continue to talk of the possibility of more QE, which should limit the gains in the single currency.

2 New Big Trade Orders for 09.07.2015

Swing

***CANCEL EUR/USD & EUR/JPY Big Trade Orders

2 New Big Trade Orders

1. USD/CAD

Place Order to Sell 1 Lot USD/CAD at 1.3290

Place Order to Sell 1 More at 1.3480

Stop for ALL 1.3655

The Bank of Canada has a monetary policy meeting this week and between the recent recovery in oil prices along with the uptick in employment and IVEY PMI, the central bank should sound more upbeat, reversing the slide in the Canadian dollar. The greenback on the other hand could experience further profit taking ahead of next week’s FOMC rate decision providing scope for a deeper reversal in USD/CAD.

2. GBP/CHF

Place Order to Sell 1 Lot GBP/CHF at 1.4920

Place Order to Sell 1 More at 1.5140

Stop for ALL 1.5285

The Bank of England also meets this week and given the downside surprises in all 3 PMIs and international developments, UK policymakers should grow less hawkish. When we last heard from the central bank in August, the conviction for a Q1 rate hike was wavering. At the time, Investors were looking for a clear sign that the central bank is moving closer to raising interest rates but instead what they got were changes in their economic forecasts that suggests the central bank is still in no rush to tighten. The Bank of England left monetary policy unchanged with only 1 member of the policy committee voting for a rate rise. More importantly, the BoE lowered its 2015 and 2016 inflation forecast citing lower commodity prices and a stronger currency. This view is likely to have hardened in the past month

AUD/NZD Big Trade +40

Swing

AUD/NZD Big Trade Long Triggered, Cancel Short

BK AUD Big Trade -- 2 New RBA AUD/NZD Orders

The RBA rate decision is a close call but we think it will be a big market mover.

Therefore we are placing 2 orders FAR away from current levels because spreads can widen significantly before RBA but if the rate decision is material enough, there should be continuation.

1. Place Order to SELL AUD/NZD at 0.9967

Stop 1.0100

2. Place Order to BUY AUDNZD at 1.0130

Stop 0.9970

*If one triggers, cancel the other

One of the most important event risks this week will be tonight’s Reserve Bank of Australia monetary policy announcement. The market is pricing in an 80% chance of easing by the central bank but only 13 out of 30 or 43% of the economists surveyed by Bloomberg expect a 25bp rate cut. The decision will be a close one and with the divergence in views, we have no doubt that there will be a big reaction in the Australian dollar. When the central bank lowered interest rates in February, they maintained a dovish bias and reiterated their pledge to increase stimulus in March. Two months have past since their last rate cut and there are still plenty of areas of concern.

According to the table below, the trade deficit nearly doubled in the month of February as slower growth in China and falling commodity prices dragged exports lower. Unfortunately the price of iron ore one of Australia’s most important exports continued to fall, hitting a record low on Friday. Manufacturing activity has also been weak with most data out of China surprising to the downside. While there were pockets of improvements including an uptick in retail sales, improvement in the labor market and acceleration in service sector activity, the Australian economy needs another round of stimulus in order to find firmer footing. To leave rates unchanged in April would simply be delaying an inevitable change and there’s enough deterioration to justify an immediate rate cut. If the RBA lowers rates and maintains a dovish bias, AUD/USD will break 75 cents and AUD/NZD will take out parity. If they cut but shift to neutral which is less likely given the outlook for iron ore, the Australian dollar will still decline and there would be a knee jerk recovery but it should end up lower than its pre-RBA levels. Should the central bank leave rates unchanged, we expect AUD to trade higher regardless of their bias but of course the gains would be more limited than no cut followed by a shift to a neutral bias. Taking all of these scenarios into consideration, the odds strongly favor a decline in the Australian dollar after the RBA rate decision.