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Articles by Mark De La Paz

October 8th, 2014 @ 10:13 am by Mark De La Paz

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After a two day bounce when economic figures from the Euro area continued to disappoint we have EURUSD consolidating under the 38.2 Fib retracement level of its sell-off from September 16, with the 1.2690 area providing a cap since Monday. Note we have little in the calendar that could prove to be a catalyst for further action suggesting that the said price area will likely hold. From a candlestick perspective Tuesday turned out to be a hanging man suggesting we risk a resumption of the downtrend following the two-day bounce while intraday 4H charts has a developing gravestone doji or shooting star.

EURUSDH4

 

We prefer looking for shorts on approach of the 38.2 fib area at 1.2690 with stops just above the 1.2700 region, Thursday’s high.

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October 6th, 2014 @ 12:28 pm by Mark De La Paz

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Following Friday’s huge movement we are surprised to see little action happening thus far going into the European after-noon trade with most of the majors seeing a limited pullback. Given the huge gains for the US jobs market we are continuing a bullish view for the US dollar seeing the current bounce across the majors as a technical correction for Fridays drop.

MetaTrader - FX Clearing

Thus far data for today has us thinking of a resumption of Euro’s losses as German Factory Orders contracted more than expected at -5.7% month-on-month against a consensus of -2.45 while the region wide Sentix Investor Confidence feel further to -13.7 against a -11.8 consensus and -9.8 previous read. Look for bears to come in off the Daily Pivot at 1.2562. Broadly speaking we are in the process of taking out key supports on the monthly scale among the dollar pairs that any pullback will just be an excuse for buying the greenback from a better vantage point.

 

 

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October 1st, 2014 @ 8:42 am by Mark De La Paz

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With UK the UK’s Manufacturing PMI taking a surprising dip to 51.6 against expectations of inching higher to 52.6 Cable is seeing a sell-off for a knee-jerk response with the current action fast approaching S1 from Pivots at 1.6157 and the 78.6 Fib of the rally bounce from September at 1.6152.  Note despite the move we are barely seeing just half of the daily ranges suggesting caution here may be temporary. Look to join the bears on a close below the said levels, with projected lows at 1.6106.

GBP MetaTrader - FX Clearing

Alternative entry could be off the 1.6185 area with stops above the daily pivot at 1.6222.

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October 1st, 2014 @ 5:04 am by Mark De La Paz

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If its not a scandal in Chinese metals imports or policy makers and a prime minister pushing things down there’s always good old data to move the commodity pairs. Resuming the theme of weakness we have had the last few weeks after yesterdays bounce Aussy has taken the lead in the commodity retreat wresting pole position from Kiwi as the latest data suggests it is far from certain that the RBA will be the next to tighten among monetary authorities. Latest numbers show consumer demand waning as Retail Sales came out a mere 0.1% against expectations of 0.4% suggesting the domestic end demand story could be sputtering at a time when the foreign demand component, i.e. Chinese commodity imports, may be hitting a peak.

calendar 100114

 

For the charts we actually have Aussy already hitting critical support area at 0.8660 right about the pull back low from January for the commodity rally October 2008. A daily close below this area could pave the way for a move to the psychological 0.8000 over the rest of the quarter. A saving grace for today though is that we have already seen more than the daily averages and should we hold above beyond the open of Europe we could see some consolidation off this region though it would take more than a strong support to generate any bounce.

AUDUSDMonthly

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September 30th, 2014 @ 2:43 pm by Mark De La Paz

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Figures released over the past hour helped to see a dollar pullback after the open of Europe again so the Greenback on a tear. We had S&P Case Shiller HPI coming short year-on-year at 6.7% against a 7.5% consensus and the Chicago Area PMI also short at 60.50 vs. the 61.9 median forecast though expectations already called for a retreat in the numbers. The big failure however was in Consumer Confidence where we dropped to86 from 92.40 and against a 92.5 consensus.

calendar 93014

 

Market was already seeing a pullback prior to the US releases with the US numbers serving as a convenient excuse to push things further. That said people appear to be looking at the broader picture where expectations are high that the Fed this October will be signalling a clearer path towards rate tightening as they write a finish to the QE taper.

MetaTrader - FX Clearing 930

Thus we are looking for these intraday moves as an opportune time to allow dollar bulls to reenter. For now Euro to us remains the most vulnerable of the pair given the ECB meeting Thursday and the desire of super Mario to add another Trillion Euros to the balance sheet which would represent about 6.25% of the Eurozone economy, translating to a potential crash to the 1.2000 area.

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September 29th, 2014 @ 7:34 am by Mark De La Paz

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After last weeks attack on the “over-valued” Kiwi, NZDUSD is once again selling off again courtesy of New Zealand’s Prime Minister John Key. It seems to add loads of credibility for the market if the PM is a former currency trader himself. Add to this comments from the RBNZ Governor over markets failure to price in the declining prices of New Zealand’s exports and the long pause in the banks rate tightening and it would be a good idea for people to keep an eye on 0.7681 the low for the June 2013 pull back.

NZDUSDMonthly

 

 

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September 29th, 2014 @ 5:40 am by Mark De La Paz

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We have a not so typical start for the week with a smattering of data actually crossing our screens ahead but a review of the releases suggests these are low to mid-impact data. Hardly worth noting and offering little in the way of a potential catalyst to get the markets moving.

 

calendar 92914

 

Absent anything new then we will be sticking to the previous weeks theme of seeing a stronger dollar considering the close we had Friday with the greenback right around its highs for the day against the respective currency pairs. Going forward we are already seeing commodity currencies taking a beating with Kiwi in particular suffering from a lack of love as RBNZ Governor Graeme Wheeler suggest that the currency had not yet fully adjusted to the slump in prices of New Zealands exports.

 

MetaTrader - FX Clearing 92914

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September 29th, 2014 @ 3:12 am by Mark De La Paz

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Japan’s Nomura Holdings Inc. is looking for the Euro to drop to the 1.2000 region by the middle of next year for a slow and gradual decline contrasting the sell-off during the debt crisis. Head of currency strategy Yunosuke Ikeda is citing what we’ve all been looking at, with the writing on the wall centered on “widening interest-rate differentials between the U.S. and Europe”. That said we have to point out that rising rates out of the US may not be the only potential catalyst for Euro weakness the bigger risk will be actual US style monetary easing, i.e. ECB actively buying government bonds. Note that the ECB has already pointed out the limits that easing credit conditions actually face given the failure of its recent TLTRO. Pressure is building for the heavy hand of governments to come in and provide direction, an ECB funded Marshall Plan or as the recent American experience puts it Q.E version 1 and 2. 

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