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AUD/USD Triggered on short reentry at 0.7490, Stop 0.7690
AUD/USD Triggered on short reentry at 0.7490, Stop 0.7690
3/14 – AUD/USD Big Trade – Close at market (now 0.7543)
Place Order to SELL AUD/USD at 0.7480
The Australian dollar is finally falling and after this week’s horrid Chinese trade numbers. Exports fell 25.4% in February, the largest decline since May 2009. Imports also dropped 13.8%, confirming the weakness of internal and external demand. Australia can’t grow without China growing and the latest slowdown in the world’s second largest economy spells big trouble for the land down under. Up to now the Australian economy has not felt the full brunt of the contraction of the mining sector. The country’s GDP has grown at an impressive 3% rate while Retail Sales and consumer spending continue to expand at respectable 0.3% pace. Indeed the RBA has been downright sanguine about the economic prospects of the country arguing that falloff in the mining sector will be made up by real estate, services and tourism revenue. As a result the market has plowed back into the Aussie believing that its 2% yield will remain intact. We think the authorities are deluding themselves. Last month the employment data started to show the first cracks in the armor. Jobs contracted by -8K as the mining layoffs finally started to hit the payroll numbers. That trend is likely to continue with next week’s employment report.
Close USDCAD here 1.3900 for +45 on trade we will reload later
**Sell Order at 1.3945 TRIGGERED
USD/CAD Big Trade
Place Order to Sell USD/CAD at 1.3945
Stop at 1.4145
Oil prices are up 5% today and USD/CAD isn’t reacting. The main reason why markets were calmer on Friday is oil. After falling for 6 straight trading days, oil moved higher after UAE said on Thursday afternoon that OPEC is ready to cooperate on an output cut. While encouraging, the restrained recovery in oil suggests that investors are skeptical because in order for oil to bottom and for a cut to actually occur, Saudi Arabia needs to be on board and so far we haven’t heard anything. Yet at the same time they have not denied it like in the past when they would come on the wires moments later. While all of the concerns relating to supply and demand are still there, USD/CAD is steady and the sharp rebound in oil should lead to stronger recovery that could take USD/CAD down to 1.38.
2/15 BK Big Trade – Closer EUR/USD here at 1.1140 for +50
2/8 – Order to SELL EUR/USD 1.1190 TRIGGERED
Place Order to SELL EUR/USD 1.1190
Stop at 1.1390
Markets are collapsing in Europe today and the meltdown is hitting assets around the world. One of the main reasons for the bloodbath is the spike in Italian, Spanish, Portuguese and Greek bond yields. Euro is being squeezed higher because of short covering but the crisis stems from the region so it should only be a matter of time before the euro feels the pain. The spike in European yields will also make the European Central Bank very uncomfortable, increasing the case for more easing, which will be negative for the euro. German industrial production and trade numbers are scheduled for release on Tuesday and with the sharp drop in factory orders / PMI, the odds favor a weaker release.
CLOSE GBPUSD here at 1.4430 +60 on trade
New GBP/USD Big Trade Orders
Buy GBP/USD at 1.4370 (at market)
There’s been a significant amount of positive headlines in relation to Brexit. It seems that the EU and Britain are coming to agreeable terms to avoid an exit which would remove one of the greatest risks facing sterling this year. Short speculative positions are also at very high levels, exposing the currency pair to the risk of a short squeeze ahead of Thursday’s BoE rate decision. UK PMIs are scheduled for release tomorrow and we believe that stronger manufacturing activity and a rise in the GfK consumer confidence favors a stronger release that could support our trade
2/3 Stopped on USD/JPY Aggressive and Conservative
USD/JPY Buy order at 120.65 TRIGGERED
Place Order to BUY USD/JPY at 120.65
Place Order to BUY USD/JPY at 119.85
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.
1/30 – CLOSE CADJPY at market currently 86.42 for +82
Big Trade 01.29.2016 CAD/JPY Reload Order to Buy at 85.60 TRIGGERED
Reload after BoJ easing – Order to Buy CAD/JPY at 85.60
1/27 – Close AUDUSD at 0.7012 replace with NZD orders
1/26 – Order to Sell AUD/USD at 0.7010 TRIGGERED
Place Order to Sell AUD/USD at 0.7010
Place Order to Sell EUR/USD at 0.7100
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.
1/21 – Take profit on Aggressive at 1.0834 for +86
1/20 – Take profit on Conservative at 1.0900 for +70
1/19/2016 – Conservative Entry Triggered
1/19/2016 – First Entry Triggered
Place Order to Sell EUR/USD at 1.0920
Stop at 1.1120
Place Order to Sell EUR/USD at 1.0970
Stop at 1.1170
3 Currencies are in play this week – GBP, EUR and CAD. We believe that the Bank of Canada should lower rates but we want to see a deeper retrace in USD/CAD before getting in. We’ll revisit the CAD / BoC trade tomorrow.
In the meantime, UK data has been terrible and we believe that this week’s inflation, employment and retail sales figures will reinforce the market’s concerns about the U.K. economy. CPI is scheduled for release tomorrow and with oil prices falling, inflation is likely to decline. More importantly, BoE Governor Carney will be delivering his first speech of the year on the economy and we believe that it will echo the caution heard from this month’s BoE minutes. Earlier this month, U.K. policy makers expressed concerns about financial market volatility and lower inflation.
As for the EURO, while the ECB is not expected to increase stimulus, the price of Brent has fallen by more than third since the ECB met in early December. This will give Mario Draghi strong reasons to remind investors that it is within the central bank’s mandate to increase QE because the drop in oil has made it more difficult for the central bank to meet its 2% inflation target.
1/8 – Take profit on USD/JPY here at 118.70 for +50 because average hourly earnings was weak . reaction may not last
1/6 – Order to Buy 1 Lot USD/JPY at 118.20 TRIGGERED
1/5 – Place Order to Buy 1 Lot USD/JPY at 118.20
Place Order to Buy 1 More Lot of USD/JPY at 116.28
Stop for ALL at 114.35
The meltdown in Chinese stocks has meant significant losses for USD/JPY. However last night’s actions by the Chinese government to support its sinking stock market through a short sale ban for major investors and buying of equities by state controlled funds shows how responsive China will be to disruptions in their markets. While the Shanghai Composite Index opened down 3% overnight, it rebounded to close down only -0.26%. The markets are nervous but between China’s actions and the stabilization in their stock market, we believe that the slide in USD/JPY should come to an end soon. U.S. policymakers remain optimistic that the impact of China’s rout on U.S. markets is limited. The Fed may be less discouraged to raise rates again in this environment but no one expects another rate hike until March so they won’t be talking down rate hike expectations so early in the year. In other words, monetary policy divergence still favors USD/JPY in the long run and these could be bargain levels to buy USD/JPY.
11/04 – Close NZDUSD at 0.6615 for +75
CANCEL NZDCAD Order. Replace with this market entry:
Place Order to SELL 1 lot NZD/USD at market (now 0.6685) – TRIGGERED
Place Order to Sell 1 More at 0.6885
Stop for ALL at 0.7050
***10/28 Update – BK NZD/CAD Big Trade – Close trade at 0.8885 for +75. We’ll reload later
Place Order to Sell 1 lot NZD/CAD at 0.8960 TRIGGERED
Place Order to Sell 1 more at 0.9140
Stop for ALL at 0.9330
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.