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Articles by Mark De La Paz

March 26th, 2015 @ 3:32 pm by Mark De La Paz

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Following Tuesday’s high wave candle and failure to close above the 0.7912 area we have had Aussy’ daily charts turn into a high wave candle opening the potential for further losses. From an even bigger picture we would note that we may be set to end the month as a higher high wave doji that is getting rejected from the 61.8 Fib of the rally from 2008. Essentially a signal that bulls are none to keen on going long. Economically it actually does not make sense for Australia to favor a stronger Aussy given the collapse in commodity demand. For now we suggest remaining focused for a sell on rallies play, particularly off the said 0.7912 area with the charts likely set to play a broad range of 0.7500 to 0.8000 in the next few weeks.

AUDUSDDaily

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March 24th, 2015 @ 12:15 pm by Mark De La Paz

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Currency markets are once again seeing a fragmented session with the dollar slightly weaker against its peers though ranges have ben tight and Cable unable to take advantage of the situation. Once again commodity pairs appear to be taking a lead in attempts to do capitalize on the loss of strong dollar sentiment following the latest Fed meetings though we continue to question just how much upside could there be for Loonie, and its peers across the pacific as their main export markets, the US and China, do not appear to be all so healthy. For now we are more amenable in looking for either havenplays out of Yen and and the Swiss Franc or perhaps allowing Euro to see a bigger pullback as markets now appear to be prepared for any eventuality with respect to Greece.

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Ahead though we have US inflation metrics where consensus iscalling for some improvement as this key leg for any FOMC tightening has remained to be a disappointment for Fed Hawks. This time around consensus forecast is calling for a 0.2 read after consistently reading a contraction the past three outings the last at -0.7% suggesting that the disinflation effects of the drop in crude remains.

calendar 032415

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March 20th, 2015 @ 1:23 pm by Mark De La Paz

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After shooting upto a high of 1.1044 Wednesday courtesy of the Fed’s Janet Yellen, the Euro quickly changed course in Thursday’s trade to end up right about where the single currency was before the Fed chief started talking. While many analysts subsequently called the move as stop hunting by the market making banks and insists on further Euro weakness we do have to examine its implications for the Euro trade going forward, if any. Firstly the 1.1044 high will now be giving us a reference for when to call a reversal if indeed the single currency where to actually see a substantial recovery. Second the size of the candle then effectively ends the prior bearish trend we were seeing.

EURUSDDaily

Personally we do not think that Euro weakness is actually at an end though from hence forth this will no longer be a one way bet down. From a tactical perspective this means that when entering the markets we should favor more the notion of selling the rallies than quickly jumping in on new lows being made. Focus for us in the near term will be to look for rejections coming from the 21D EMA lines.

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March 19th, 2015 @ 1:34 pm by Mark De La Paz

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We are not exactly there yet but almost a day after the Big Yellen Press conference and the Fed’s economic projections and statement we have the dollar recouping much of its losses which leads us toconclude either one of two things, or may be both happened. First, market makers were seeing a lot of stops and Yellen happened to be a convenient excuse to hit them. Or secondly, people were actually looking to book profits following the difficulty to push the dollar any further. None the less what ever the reason yesterday saw a big dollar retreat only to be reversed today with the smart money taking advantage of the betterpricing.

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 Reviewing what was said yesterday it is clear that the Fed actually laid the ground work for a rate hike by the middle of the year removing patience from its standard statement. True they talked about the downside risks for the economy but as long as the Jobs market holds we will continue to look forward to the day when people will start spending more sparking a virtous cycle of consumption, growth, and perhaps further strength in the currency.

 

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March 18th, 2015 @ 12:17 pm by Mark De La Paz

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Given what could be a seminal moment in the US interest rate watch story currency dollar pairs have mostly been quiet for today seeing a consolidation for the most part ahead of the impending double header. First we will be having the FOMC’s interest rate announcement at 1400GMT where ofcourse no one is actually expecting to see any action. With this however will be the release of the committe’s own Economic Projections which should be interesting as we see continued strength in the US labor markets even as data elsewhere do not appear to suport the notion with Monday’s Capacity Utilization Rate actually slipping.

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Thirty minutes after we will be having the more important Fed press conference where market would likely be pressing the usually dovish Fed Chair Yellen about the schedule for a US tightening given the strength in US jobs growth. Interestingly March was actually the supposed time for a rate hike according to some theories before when Yellen suggested things could happen 6 months afte the end of the QE3 program.

Among the charts interest lies mostly on the British Pound having been hammered across the board on a disappointingly steady ready in Unemployment Rate at 5.75 against expectations of some improvement. Note that we are now developing a follow through to the weekly break of 1.4813 from the previous week, operning thepotential for further losses to the 1.4226 region, May 2010 lows with scant support elsewehere but the psychological 1.4500 area.

GBPUSDWeekly

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March 16th, 2015 @ 12:57 pm by Mark De La Paz

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After Friday’s surprised and new highs for the dollar the buffer of a weekend and time to thing has once again meant that we are seeing a slow pull back Monday with the releases thus far having little impact in the markets. We have just seen secondary numbers from the US with the New York area Empire State Manufacturing Index falling short of expectations and its prior read at 6.9 though we are far more interested in the Capacity Utilization and Industrial Production figures up ahead at 1315GMT. Consensus forecasts here points to a 79.5 read in the former and 0.2% read in the latter far from levels that would suggest the need for some form of quick monetary tightening.

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March 13th, 2015 @ 1:24 pm by Mark De La Paz

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Just a day after the BoE’s Mark Carbey spoke about the UK economies solid expansion we have the British Pound turning out as the days big loser with GBPUSD already seeing new multi year lows taking out the July 2013, 1.4813 price point without much fanfare. Perhaps the fact that Thursday actually gave us along wick ought to have been a signal for the markets beairish sentiment. Examining Carney’s remarks in Sheffield he spoken about the plus side for the currency as being haven flows ( a no braider given the EURGBP charts) and then nothing. Practically all other concerns were amount inflation or more to the point the risk of disinflation and the negative impact of a stronger currency on exports and wages, arguments that call for a weaker currency.

GBPUSDMonthly
Ahead the next key target will be 1.4226, our 2010 lows though one would expect things to stall as we hit the 1.4500 psychological price point. Noye we are actually just seeing the average daily range.

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March 12th, 2015 @ 12:09 pm by Mark De La Paz

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The trading day appears to have surprised many in the market with a strong correction among the dollar pairs that has seen the commodity set taking the lead heading back up as the RBNZ sounded just hawkish enough to warrant profit taking and a pullback to the daily EMA lines while Australian data also presented some surprises with the unemployment rate at 6.3% against the steady 6.4% consensus. From then on it was a scramble to book some profits as we face some key metrics out of the US.

MetaTrader - FX Clearing
For a while now it has been our contention that you cannothave sustained strength in the US economy without this eventually filetering through to the consumers. Recall last week gave us another surpise in NFP which turnedout at 269K on Friday against a 240K consensus helping pull down the unemployment rate to 5.5% from the previous 5.7%. Now its time for us to know whether all those new jobs is finally having some effect. The US economic calendar has Retail Sales numbers turning out at 1230GMT with consensus expectartions calling for a recovery in demand at 0.3% for the headline number and 0.5% in the core data. Given the extent of dollar’s rout today we will be avoiding any response with as expected or disappointing numbers but double the consensus forecast and we will look at current pullback pricing as coming from a good vantage point to go greenback long once more.

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