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Articles by Mark De La Paz

February 6th, 2015 @ 8:55 am by Mark De La Paz

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The past week has seen some very intersting if frustrating price action ahead of todays NFP. An aussy sell-off courtesy of the RBA surprising the markets with a rate cut did not last and turned into a daily hammer. While the dollar weakened as people speculated that the Fed could further move back any rate hike after reviewing recent releases which has been week. And thursday saw the Cable rally breaking the years consolidation as the BoE turned out to be the only central bank that has buck the trend of surprise easing.

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All this said we now turn to today’s Non-Farm Payrolls with consensus forecast at 236,000. With so many of recent US data falling short of forecast people are anticipating a weak read though how much of dollar weakness could be expected is a different thing all together as we have exhibited some “buy the runor,” ¬†already and “sell the fact” could follow. Anything around the 250,000 mark however should prove interesting given the heights we have seen in the correction for many of the dollar pairs.

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February 4th, 2015 @ 10:36 am by Mark De La Paz

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The PBOC has just cut interest rates by 50 bps. Knee Jerk impact is a 60 pip pop.

AUDUSDM1

Given the Broader technicalpicture this could see us to the 0.7950′s region going to Fridays US NFP from where we could turn into interested sellers specially if the us jobs market surprises on the upside.

AUDUSDDaily

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February 4th, 2015 @ 9:20 am by Mark De La Paz

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Tuesday has turned out to be a big surprise for the market in many ways as price action from an earlier decision by the RBA to cut was eventually reversed by the close for a long tail in the daily Aussy charts and similarly weak dollar plays across the other majors. For Euro we had a consolidation breakout that saw us up to the daily EMA while GBPUSD has now formed a double bottom though we are unconvinced ofits ability to trigger.

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So what exactly happened? It appears that with the surprise move by the RBA earlier the day traders elsewhere have begun to speculate who is next, and their response was the US backing off its hawkish direction in monetary policy. Given the dollars gains the past few months and recent weakness in economic data it is easy to see now why such a thinking would crop up. Going forward however, such concerns on policy direction would merely further emphasize the importance of this Friday’s NFP results.

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February 3rd, 2015 @ 6:13 am by Mark De La Paz

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After the surprise rate cut by the Bank of Canada last January 20th and all the talk of currency wars in Davos, not to mention the Russian 180 degree turn on policy, today saw another front opened with a salvo by the Reserve Bank of Australia cutting key interest rates tp 0.75% against expectations of a steady 1.0%. As with the SNB’s move which heated the cold war on currencies the RBA’s action is not extacly unwarranted with the commodity super cycle at an end and other domestic industries hallowed out during the Miracle economy period.

AUDUSDMonthly

Essentially the announcement paves the way for RBA Governor Glenn Stevens dream level of 0.7500. For today we have already seen twice the aveage daily range which would suggest better remaining on the sidelines until a nice sellon rally potential develops.

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February 2nd, 2015 @ 1:16 pm by Mark De La Paz

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The days price action for Cable has already been intesreting and extensive nearing their weighted daily averages though with enough room for bears to continue making a try for Fridays lows at 1.4988. Such a move would ofcourse again mean going under the psychological 1.5000 area, incidentally S1 in pivots, opening the potential of even greater interest for shorts among the swing type traders.

GBPUSDH1

For the bigger picture the key remains to be taking out our year low so far, at 1.4952 with a daily close beneath it opening the crucial 1.4813 area. A candidate buy area should we start seeing longterm indecision.

GBPUSDWeekly

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January 30th, 2015 @ 1:06 pm by Mark De La Paz

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While it is not unusual for us to write about how limited the range is thus far, today seems all the more ominous given that we face advanced US GDP numbers in a few minutes. Note that fromn the charts it appears that any breakout following the release will be predisposition-ed to move lower given the over all trends though we prefer seeing a follow through to GBPUSD’s rejection from the EMA’s for new lows.

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Ahead we have Advance GDP (1330GMT) numbers where expectations call for a bit of easing in the blistering 5.0% pace last time out to a more sedate 3.3%. While such a read may be seen as disastrous for the second biggest economy China, a 3.3% clip for US GDP would still be seen as blistering pace for a developed economy. As such anything higher to me would call for us pushing the stronger dollar agenda particularly in the face of a rather optimistic Fed last Wednesday. Where the greenback managed to rally despite many expectations of a near term hike being moved back to the middle of the year.

calendar 013015

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January 28th, 2015 @ 12:47 pm by Mark De La Paz

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With the FOMC set to have its first policy announcement for the year currency markets for the day have remained mostly quiet about the only big move, an earlier spike in Aussy following a strong read in the quarterly Trimmed Mean CPI that read 0.7% against a consensus figure of 0.5%. Even here though we have seen AUDUSD eventually easing off in European trade with eyes focused on what the banks decision will be.

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Note many at this point are asking whether the Fed is on track of a widely expected symbolic tightening of the Fed Funds rate following the mixed signals that economic data has been painting. While sentiment in the US has remained robust people do not appear to be dipping into their wallets as we saw Retail Sales contract, supply side data ease off, and inflation metrics falling short of forecast. Capping all these bad news was yesterdays Durable Goods numbers that says strategic buys, i.e. big ticket items, have been weak to reflect uncertainty of future conditions.

So the big question for many now is will the Fed remain very optimistic of future conditions or sound a cautious tone. The latter will set in fully with many of the charts that has a pullback from recent dollar highs on their agenda.

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January 27th, 2015 @ 12:13 pm by Mark De La Paz

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Currency action for the day has mostly been disappointing were one to gauge the action from the daily average with most stuck at the usual half of the daily range and few if any are holding to the extremes. A review of the daily candles suggest dollar weakness for the moment as Aussy and Euro, shows as hammer for Monday, Cable a morning star and Kiwi a loss of bearish momentum. About the only thing that hasn’t showed much momentum has been USDCAD though the narrower bodies since the surprise rate cut is deceptive as these still range above a 100.

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Going forward we are staring at a slew of numbers from the US headlined by Durable Goods (13330GMT) numbers seen coming in at a decent 0.5% bounce following the previous contraction of -0.7% while the Core figure is expected at 0.6% upticks which could reinvigorate the US jobs story, after all people and business don’t go for big ticket durable goods when they are full of uncertainties. Following this is again a big ticket issue, at 1500GMT with New Home Sales expected to tick up month-on-month to 450K and Consumer Confidence also suggesting a dollar uptick with its 95.1 consensus forecast. All of these arguing a dollar comeback.

calendar 012715

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