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Articles by Mark De La Paz

October 30th, 2014 @ 12:07 pm by Mark De La Paz

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Markets are about half an hour away from the next key event from the US with advance GDP figures up for release, the consensus calling for a 3.0% read against the prior 4.6%. Taken at face value people may look at the downside adjustment as a bad number but we would like to point our that for a large developed economy like the US 3.0% is the fast-lane. Taking yesterdays FOMC announcement into context we would view todays data as a confirmation of the hawks argument thatthe recover is well and the US can weather global turmoil.

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October 30th, 2014 @ 11:14 am by Mark De La Paz

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Wednesday’s FOMC driven sell-off for GBPUSD appears to have quickly lost steam as daily charts are now showing a possible hammer in the making with the potential to turn into a piercing pattern at the close. Half a day following the FOMC statement we have intraday indicators for Cable already picking up with the 4H oscillators looking to get out of oversold areas while hourly stochastic is even pushing into overbought levels. This should mean that our previous inverted SHS remains n play, just needing some fine tuning to count for the previous false breakout. Key for us going forward will be the ability to push towards the daily pivot at 1.6058. Note we have projected highs reading 1.6083.

GBPUSDDaily

From a fundamentals perspective we note that the UK also is seen as having a bias towards monetary tightening so if both central banks are now leaning hawkish we would prefer looking for other catalyst as a driver for Price Action.

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October 30th, 2014 @ 6:24 am by Mark De La Paz

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Wednesday saw the FOMC take another small but symbolic step towards policy normalization as the QE program met its natural end with the FED cutting to zero its budget for buying Treasuries and Mortgage-Backed Securities. This is from a high of $85 billion a month in 2013 to $15 billion in the past month though with the Fed maintaining its policy of reinvesting previous principal payments this does not exactly equate to withdrawing liquidity. The Fed has also noted “solid job gains and a lower unemployment rate” along with the improving capacity utilization trends to underscore the idea of a pickup in the recovery. Effectively the Fed is saying no more additional free money but market can keep what its already gotten, at least for the moment.

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Knee-jerk response for the market has been to see a stronger dollar though we appear to be having some difficulty in getting a follow through going. As things stand though the news has been enough to invalidate previous patterns suggesting we say good bye to the cup and handle in EURUSD and inverted hand and shoulder in GBPUSD.

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October 29th, 2014 @ 11:02 am by Mark De La Paz

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Half way through the European session and with Asian markets already closed we still see very little action in the currency markets as we wait for today’s FOMC announcement.

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It is a foregone conclusion that the Fed will likely retain language that states a “low interest rate” environment will remain in effect for a considerable period of time but market is watching out for signals on when the first symbolic tightening will occur and clues on what will be the other factors that the Fed would consider when it tightens. A lack of any new angle from the Fed statement later will continue to see us looking for EURUSD to play a cup and handle and GBPUSD its own inverted head and shoulder pattern in the daily charts.

 

MetaTrader - FX Clearing102914

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October 28th, 2014 @ 12:08 pm by Mark De La Paz

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Currency markets for the day has thus far been tight and and whipsawish for the dollar majors with the exception of USDJPY taking the lead on an equity driven rally as European indices are pushing well into the green. Next key mover for us will be US Durable Goods data with the headline figure looking to bounce 0.5% from the previous 18.4% drop while he core data is seen coming out similarly at 0.5%. Note that this particular data is seen reflective of the willingness to commit to buy big ticket items which business and individuals do only if they are confident of their future cash flow. A strong bounce could see equities opening strongly in NY and a further surge among the Yen pairs. Data will be out at 1230GMT.

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October 28th, 2014 @ 11:42 am by Mark De La Paz

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With the latest stress test from Europe now over and 80% of its banks making the passing grade Euro managed to see a strong open for the week with monday’s candle pushing for the 21D EMA’s though closing short of the figure. At this point a big technical attraction for the pair is a developing cup and handle pattern with the higher low from Thursday the previous week defining the handle lows. With the pattern trigger at 1.2888 our focus for the day will be trying to set things up for a run to the figure later in the week. For now look for a bounce off the daily pivot at 1.2696 or a close above 1.2725 as an entry with slows below the days lows.

EURUSDDaily

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October 27th, 2014 @ 2:16 pm by Mark De La Paz

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After the previous weeks high wave candle Cable has started the week on healthy footing already pushing for an inverted head and should patterns neckline 1.6171. This following a failed test of the key consolidation floor at 1.5876 from the August/September period of 2013 we now may have seen a medium term low considering numbers out of the UK remain firm and the Bank of England has hawks coming up. Look for a break of the neckline in the higher time frames to pave the way for a bounce towards the 1.6500 region.

GBPUSDDaily

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October 22nd, 2014 @ 1:39 pm by Mark De La Paz

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The Canadian dollar has just taken a double whammy following poor Retail Sales numbers showing another contraction in Canada while US inflation ticked up. This time around Retail Sales came out worse with the core data down -0.3% on top of the previous -0.5% drop while headline figures turned out at -0.3% as well against expectations of a flat read. For its part US Consumer Price Index managed to pick up 0.1% against a flat zero consensus, enough for some knee jerk action though far from suggesting that the Fed will suddenly be raising rates.

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Considering the trends amongst the charts and the way data has turned out we are looking forward for USDCAD to be just about the only pair to likely sustain the knee-jerk response as we are resuming an accelerated uptrend bouncing off the 61.8 Fib retracement area of the rally from October 9.  Look for a buy on dips off the daily pivot at 1.1239. Our near term objective would be a test of the prior 1.1384 highs.

USDCADH4

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