Today’s Trades 12.06.2018 EURUSD, EURCHF, NZDJPY

Swing

Good morning/afternoon everyone!

Currencies and equities are trading sharply lower this morning as a convergence of negative news sends risk assets tumbling. The U.S.’ arrest of Huawei’s executive sourS US-China relations and raise concerns about the seriousness of President Trump’s desire to improve the relationship with China. Oil prices are also down more than 2% ahead of the OPEC meeting on talk from Saudi Arabia that no agreement has been made yet to cut production. 10 year Treasury yields are trading below 2.9% and this persistent decline is exacerbating the pressure on USD/JPY. Dow futures are pointing to a sharply lower (-400 point) open and unless today’s economic reports cause a V shaped recovery, risk off will the theme of the day. ADP, Challenger layoffs, jobless claims, non-manufacturing ISM, durable goods and factory orders are scheduled for release. Keep an eye on the headlines too because aside from OPEC, BoJ Governor Kuroda, BoC Governor Poloz, Fed members Quarles, Bostic and Williams are due to speak along with BoE members Broadbent. Given how much the Canadian dollar has fallen and the aggressive reaction to BoC, Governor Poloz’s Economic Progress report at 8:35am will be exceptionally important.s The worst performing currency today is the Australian dollar which was hit hard by Huawei’s developments. Recent data hasn’t been great as a softer than expected trade surplus follows disappointing GDP. AUD also a risk currency that suffers greatly on risk off days. The strongest is the Japanese Yen which should be no surprise but the losses for EUR and GBP are small which tells us that there’s either significant support at 1.13 for EURUSD and 1.27 for GBPUSD or investors are looking at this as an Asia-Pac / US story.

The MAIN THEMES I see today are

+JPY
-AUD
-CAD
-NZD

Trading Biases

+JPY, +USD (except vs. JPY)
-EUR, -CAD, -AUD, -NZD
mildly -GBP, +CHF

Today’s Ideas

1. Sell EURCHF at 1.1309, stop at 1.1337, Target 1.1281
2. Sell NZDJPY at 77.36, Stop at 77.64, Target 77.08
3. Sell EURUSD at 1.1341, Stop at 1.1369, Target 1.1313

Close ALL open day trades by 10:20AM NY / 15:20 GMT

Today’s Trades 10.12.2018 NZDJPY, EURNZD, NZDCAD, EURUSD

Swing

*Good morning/afternoon everyone!*

After selling off for most of this week, the U.S. dollar is trading higher against all of the major currencies this morning with the exception of the Canadian dollar, but that could also change as the morning progresses. The recovery in the greenback is directly tied to the recovery in stocks and the increase in Treasury yields. Asian and European equities rebounded overnight and as of right now, Dow futures are pointing to a strong triple digit open. Market appetite will be the main focus today and not US data because the University of Michigan’s consumer sentiment index is the only major U.S. economic report that is scheduled for release. Last night’s stronger Chinese trade numbers failed to help AUD and NZD which are giving up their gains because the increase was driven entirely by higher exports. Import growth slowed which is negative for Chinese suppliers like Australia and New Zealand. NZD is particularly vulnerable after New Zealand’s Finance Minister endorsed by the slide in NZD by saying he’s “not uncomfortable with the currency level.” The euro has been unable to break 1.16 and is now trading lower despite stronger Eurozone industrial production. USD/CAD wants to break 1.30 and with oil prices rising, that could happen this morning. The strongest currency pair is USD/JPY, which could benefit from a recovery in stocks and GBP is the riskiest as there are reports that Prime Minister May won’t agree to being trapped in a customs union.

*The MAIN THEMES I see today are*

+USD
-NZD
-AUD
-EUR
+CAD

*Trading Biases*

+USD, +CAD
-NZD, -AUD, -EUR
mildly -GBP, -CHF, +JPY

*Today’s Initial Trades*

Here’s the summary --

1. Sell NZDJPY at 73.13, Stop at 73.41, Target 72.85
2. Buy EURNZD at 1.7783, Stop at 1.7755, Target 1.7803
3. Sell NZDCAD at .8475, Stop at .8503, Target .8447
4. Sell EURUSD at 1.1583, Stop at 1.1611, Target 1.1554

Today’s Trades 07.17.2018 EURUSD, USDCAD, AUDCHF, NZDJPY

Swing

*Good morning/afternoon everyone!*

It will be a big day in the FX market with Fed Chair Jay Powell testifying before Congress at 10AM NY time. From his prepared remarks we know that he’s optimistic about the U.S. economy but worried about trade tensions. The U.S. dollar is holding strong against the Yen ahead of the release and flat against other major currencies with the exception of the New Zealand dollar, which is up 0.63%. NZD soared on the back of stronger inflation data, taking out stops in the process. UK labor data was in line with expectations but slightly weaker than the previous month. Global bond yields are lower this morning, oil is below $70 a barrel and stocks are flat. The recent decline in oil leads us to believe that the loonie is due for a correction. We don’t expect much in the way of moves ahead of Powell’s speech but there could be some relative value plays.

*The MAIN THEMES I see today are*

+EUR
-AUD
-NZD
-CAD

*Trading Biases*

+EUR. +CHF
-AUD, -NZD, -CAD
Neutral GBP, USD, JPY

*Today’s Initial Trades*

Here’s the summary --

1. Buy USDCAD at 1.3145, Stop at 1.3117, Target 1.3173
2. Sell AUDCHF at .7362, Stop at .7390, Target .7334
3. Sell NZDJPY at 76.70, Stop at 76.98, Target 76.42
4. Buy EURUSD at 1.1721, Stop at 1.1693, Target 1.1749

Close ALL open day trades by 10:20AM NY / 15:20 GMT

Today’s Trades 06.21.2018 USDJPY, USDCHF, EURGBP, NZDJPY

Swing

*Good morning/afternoon everyone!*

The U.S. dollar is trading lower against all of the major currencies this morning as the profit taking on long U.S. dollar positions continue. Another way to look at it is short covering on EUR/USD, GBP/USD and AUD/USD positions. The euro shot higher today on the back of stronger PMIs but the rally is fading into the NY session as Germany’s political risks and the ECB’s dovishness hangs over the currency. The Bank of England’s hawkishness took GBP/USD through 1.33. Like EUR/USD the pair is off its highs but unlike euro its doing a much better job of holding onto its gains. The best performing currencies this morning are the Australian and New Zealand dollars but there’s no specific explanation for these moves outside of short covering and anti-dollar flows. The big focus today is on the Canadian dollar. Not only will retail sales and consumer prices be released, but there’s also an OPEC meeting. There’s a growing chance of a formal hike but thats not certain as OPEC officials say this meeting is focused on reviewing fundamentals. Either way, we could see big swings in the loonie today and if data is strong, it could create a top in USD/CAD.

*The MAIN THEMES I see today are*

-USD
-CHF
-EUR
+GBP

*Trading Biases*
-USD, -CHF, -EUR, -JPY
+GBP, +AUD, +NZD
mildly +CAD but beware of data

*Today’s Initial Trades*

Here’s the summary --

1. Buy NZDJPY at 76.01, Stop at 75.34, Target 76.29
2. Sell EURGBP at .8760, Stop at .8788, Target .8732
3. Buy USDCHF at .9900, Stop at .9872, Target .9928
4. Buy USDJPY at 110.18, Stop at 109.90, Target 110.46

Close ALL open day trades by 10:20AM NY / 15:20 GMT

Today’s Trades 04.18.2018 – EURJPY, GBPCHF, EURAUD, NZDJPY

Swing

*Good morning/afternoon everyone!*

The U.S. dollar is trading higher against all of the major currencies this morning as investors reward President Trump’s progress in talks with North Korea. He confirmed that CIA Chief Mike Pompeo met with Kim Jong Un in North Korea last week, paving the way for an official conversation between Trump and Kim. The dollar should be able to hold onto its gains with the Fed’s beige Book scheduled for release this afternoon, U.S. bond yields moving higher and Dow futures pointing to a positive open. The weakest currency is sterling which was hit by another round of softer data. UK CPI growth slowed to 0.1% in the month of March against expectations for 0.3% rise causing year over year growth to slow to 2.5% from 2.7%. Sterling is vulnerable to a deeper correction following softer wages yesterday. The strongest currency is the euro which refuses to fall in lockstep with its peers partly because of Iran’s decision to stop using dollars in its transactions -- a move that other nations could follow. The biggest event risk today is the Bank of Canada’s monetary policy announcement -- no changes are expected but recent data improvements could encourage optimism.

*The MAIN THEMES I see today are*

+EUR
-GBP
+USD
-JPY

*Trading Biases*

+EUR, +USD
-GBP, -JPY, -AUD, -NZD
mildly +CHF, +CAD

*Today’s Initial Trades*

Here’s the summary --

1. Sell NZDJPY at .7841, Stop at .7868, Target .7812 (edited)
2. Buy EURAUD aat 1.5950, Stop at 1.5922, Target 1.5978
3. Sold GBPCHF at 1.3753, Stop at 1.3781, Target at 1.3725
4. Bought EURJPY at 132.71, Stop at 132.43, Target 132.99

Close ALL open day trades by 10:20AM NY / 15:20 GMT

Today’s Trades 02.21.2018 – EURUSD, USDCAD, NZDJPY, EURAUD

Swing

*Good morning/afternoon everyone!*

The U.S. dollar extended its gains against all of the major currencies overnight with USD/JPY running as high as 107.90. However as we start the North America session, USD/JPY is trading well off that level while pairs like EUR/USD and GBP/USD remain near their lows. Softer than expected Eurozone PMIs pushed the single currency pair down for the 4th day in a row and while UK claimant count and wages beat expectations, sterling traders were dismayed by the higher unemployment rate. BoE Governor Carney and a number of UK policymakers are speaking later this afternoon, making for the possibility of volatile GBP trade. The commodity currencies are lower across the board but the declines have been modest as investors wait for US data and the FOMC minutes. Stock futures are pointing to a flat open that should be perceived as positive rather than negative for risk appetite.

*The MAIN THEMES I see today are*

+USD
+EUR
-GBP
-CAD
-NZD
-AUD

*Trading Biases*

+USD, +EUR, +JPY
-GBP, -CAD, -AUD, -NZD, -CHF

*Today’s Initial Trades*

Here’s the summary --

1. Sell NZDJPY at 78.89, Stop at 79.17, Target 78.61
2. Buy EURAUD at 1.5689, Stop at 1.5661, Target 1.5717
3. Buy USDCAD at 1.2661, Stop at 1.2633, Target 1.2689
4. Buy EURUSD at 1.2317, Stop at 1.2289, Target 1.2345

Close ALL open day trades by 10:20AM NY / 15:20 GMT

NZDJPY to Break 80

NZDJPY to Break 80

Chart Of The Day

NZDJPY to Break 80

The U.S. dollar shot higher after the Federal Reserve touted the improvements in the economy and upgraded their inflation outlook. This move helped the greenback erase some of its earlier gains but by the end of the NY session, the dollar faded from its highs. While it could continue to rise, we think USD/JPY gains will be limited compared to NZD/USD’s losses. NZD jumped as much as 1% on comments from Finance Minister Robertson who said nothing more than underlying economic indicators are “good.” The strength of the New Zealand dollar will catch up to the economy as it has and should continue to drive inflation lower. Exports rose strongly in December but are expected to suffer greatly in January on the back of currency strength. It is also far too soon to pick a bottom in the USD. Although we could see another 50 to 100 pip rally in the greenback versus ALL other major currencies, the selling pressure is still very strong. The global growth story, U.S. fiscal finances, selling of U.S. Treasuries and a gradual exit of easy monetary policy abroad are all reasons why the dollar could remain weak. The bottom line is that even if USDJPY extends its gains, we think NZDUSD will fall further, causing downward pressure on NZD/JPY.

Technically, the 4 hour chart for NZD/JPY is very bearish. The strong reversal candle earlier today suggests a correction that could take the pair as low as 80.00.

Today’s Trades 12.06.2017 – USDCAD, NZDJPY, EURUSD, AUDUSD

Swing

*Good morning/afternoon everyone!*

This may be a busy week for the U.S. dollar but once again, we are starting the morning with no clear consistency in the greenback’s performance. The dollar is trading lower against the Japanese Yen and Canadian dollar but higher versus euro, sterling, Swiss Franc and Australian dollar. All of this can be explained by the slide in global equities which is causing the Yen to rise across the board and high beta currencies to fall. Asian equities fell sharply overnight, European stocks are down and the Dow is pointing to a lower open. The most important piece of US data to watch this morning is ADP but the impact of this report is generally short-lived. The Bank of Canada meets this morning and we believe that the loonie will trade lower into and out of BoC. Euro and sterling are both on the back foot but sterling seems to be holding at these levels in the hopes of further Brexit developments. AUD gave up earlier gains following last night’s softer GDP report while NZD continues to sing to its own tune, rebounding on nothing more than profit taking.

*The MAIN THEMES I see today are*

-EUR
-AUD
+CAD
+JPY
mildly +USD

*Trading Biases*

-EUR, -AUD, -CHF
+CAD, +JPY, +NZD
mildly +USD, +GBP

*Today’s Initial Trades*

1. Sell USDCAD at market now 1.2669, Stop at 1.2697, Target 1.2641
2. Sell NZDJPY at 77.27, Stop at 77.55. Target .7699
3. Sell EURUSD at market now 1.1811, Stop at 1.1839, Target 1.1783
4. Sell AUDUSD at market now .7586, Stop at .7614, Target .7558

Close ALL open day trades by 10:20AM NY / 15:20 GMT

Today’s Trades 11.15.2017 – CADCHF, NZDJPY

Swing

*Good morning/afternoon everyone!*

The U.S. dollar is trading lower against all of the major, led by the decline in U.S. yields. This sell-off took USD/JPY firmly below 113 and the EUR/USD well above 1.18. 10 year Treasury yields are down more than 3bp this morning but we see similar declines in UK and German yields which makes the yen crosses the biggest losers. The deeply oversold New Zealand dollar is the biggest beneficiary of US dollar weakness but the rally is losing steam at the 20-day SMA. The Canadian dollar is steady ahead of the NAFTA talks while the Australian dollar finds itself underperforming all of the majors following softer wage growth. Sterling is also on the back foot with wage growth slowing -- this weakness should exacerbate the GBP crosses. We have US retail sales, consumer prices and the Empire State manufacturing releases -- 3 extremely important reports for the U.S. dollar that could either reverse the slide or extend the losses easily.

*The MAIN THEMES I see today are*

-USD (predata)
+EUR
-GBP
-NZD
-AUD
-CAD

*Trading Biases*

-USD, -GBP, -NZD, -AUD, -CAD
+EUR, +CHF, +JPY

*Today’s Initial Trades*

1. Sell NZDJPY at market now 77.89, Stop at 78.17, Target 77.61
2. Sell CADCHF at market now .7741, Stop .7769, Target .7713
3. Place Order to Buy EURGBP at .8995, Stop at .8867, Target .9023

Close ALL open day trades by 10:20AM NY / 15:20 GMT

Today’s Trades 10.12.2017 – NZDUSD, NZDJPY, USDCAD

Swing

*Good morning/afternoon everyone!*

There is very little consistency in the performance of currencies this morning with the European currencies under pressure, the commodity currencies trading strongly and the U.S. dollar mixed as a result. Yesterday’s FOMC minutes were perceived as less hawkish but the odds of a December rate hike did not change, explaining the uneven demand for the greenback. Euro shrugged off stronger industrial production to find resistance below 1.19 as the enthusiasm for Spanish assets diminished. Sterling u-turned after hitting its August high during the Asia trading session. There’s little to explain the strength of AUD and NZD outside of short covering after strong downtrends.

*The MAIN THEMES I see today are*

-EUR
-NZD
-CAD
-GBP
mildly -USD

*Trading Biases*

-EUR, -GBP, -CHF, -NZD, -CAD
mildly -USD
neutral JPY, AUD

*Today’s Ideas*

1. Sell NZDUSD at .7113, Stop at .7143, Target .7083
2. Sell NZDJPY at 79.92, Stop at 80.22, Target 79.72
3. Buy USDCAD at 1.2474, Stop at 1.2444, Target 1.2494

Cancel ALL pending orders by 3:30PM NY / 19:30 GMT / 5:30AM AEST
Close ALL open day trades by 4PM NY / 20 GMT / 6AM AEST

NZDJPY to be a Victim of NK

NZDJPY to be a Victim of NK

Chart Of The Day

NZDJPY to be a Victim of NK

It came late in the day but the big story in the FX market today turned out to be North Korea’s idiotic decision to fire “a few missiles” over Japan. President Trump has yet to respond, but he’s certainly not going to be happy with their actions. USD/JPY has tanked in response and the move has taken all of the yen crosses down with it. These renewed tensions will most surely cause widespread risk aversion and not only does USD/JPY look poised to test its August low of 108.60 but if Trump responds with more than harsh words for North Korea, we could see 108. We have chosen to sell NZD/JPY because risk aversion has an enhanced impact on the pair especially this time around as tensions center on the Asia Pacific region. New Zealand has its own troubles with weaker growth and a central bank talking currency intervention. There are also no New Zealand economic reports on this week’s calendar to threaten the downtrend in NZD.

Technically, NZD/JPY is in a strong downtrend. It just broken below the 50-day SMA on the weekly chart and is at the cusp of breaking the 61.8% Fib retracement of the April to July rally. At minimum we expect NZD/JPY to test its August low of 78.50 but taking a look at the weekly chart, risk aversion could send the pair as low as 77.75.

NZDJPY – On the way to 80.00?

NZDJPY – On the way to 80.00?

Chart Of The Day

USDJPY has been on a tear rising more than 600 points off the lows set just two weeks ago. The pair is driven higher by market’s unshaken belief that the Fed will hike rates in June and will continue to tighten policy for the rest of the year giving the dollar a key advantage in interest rate differentials.

Meanwhile, the kiwi looks to have found a solid bottom near the 6800 figure as it formed a double bottom support on the daily charts. The New Zealand economy has outperformed expectations over the past several months -- so much so -- that the RBNZ which meets tomorrow will have a hard time maintaining its dovish slant.

If the central bank decides that policy should shift to neutral and suggests that no further rate cuts are in the offing, the kiwi could see a strong rally towards the .7000 mark. That, in turn, should help lift NZDJPY towards key resistance at the 80.00 figure.