About Mark De La Paz:
Mark uses fundamentals - "the map" - as a gauge on the "real economic value" of the currency. Technical analysis serves as "the compass", providing the cues and direction on which roads to take - also known as market timing.
Joining the FX Instructor team, Mark hopes to both learn from and be a good mentor to members of our growing community.
With congressional and senate leaders coming to terms on the US debt ceiling markets in Asia are off to a strong start while currencies also see risk appetite with the Yen crosses gapping up at the open and seeing a follow through rally. Note however that this new deal still needs to pass through both houses of congress with a very tight deadline looimng thouh the hope is now we may be able to get moderates from both sides of the aisle voting with Obama also signalling his support for the compromise. Early releases as well has also been encouraging as offcial Chinese PMI figures surprised on the upside at 50.7 against the consensus of 50.2 with fears going into the release calling for a possible contraction.
With better than expected manufacturing PMI out of China we saw Kiwi pushing to news highs though we already had a strong start following developments in the US. Daily charts see a bullish engulfing from Friday with the open for the week giving us and upside gap, indicators show a confluence of buys. Intraday we also see a confluence of buys from the 4H and hourly macd and stochastic. For now we are looking for a pullback to at least 0.8765 for new buys towards the latest historical highs.
We are just above a strong support level 0.8734 with daily macd dropping and stochastic in oversold levels. In intraday charts we are seeing short signals from the 4H picture with macd’s heading lower. Hourly charts for their part see a flat macd while stochastic is looking to cross higher. With broad based risk appetite for now we prefer playing the range game, given proximity to a strong support consider buys from just above 0.8734 for 0.8784 with stops at 0.8700.
We continue to look bullish in Cable following Friday’s turn-around and bounce off the bullish daily EMA lines. Other daily indicators show stochastic reentering overbought levels while macd is pushing up. Intraday we have a bullish bias with candles showing higher lows and higher highs in the 4H picture while macd and stochastic sees a confluence of buys in both 4H and hourly time-frames. For the moment we are just under a strong resistance level with attempts to push past the area so far failing. Given the failure to close above 1.6467 immediately we prefer looking for a bounce off the 1.6386 region.
Despite dropping we’ll below the EMA lines Friday, at the close we had a big white body for the candle while daily indicators gave us a bullish cross in stochastic as macd’s continue to push up. From an intraday picture we have a flag pattern in the $H charts with macd’s opening up and stochastic pushing for over bought levels. In hourly charts we have buy signals from both macd and stochastic as well. Given developments in the US global markets are likely to see risk appetite this Monday. We prefer taking the buy side of EURUSD coming off the support at 1.4345, alternative entry would be a break of 1.4416 for the psychological 1.4500 area.