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Articles by Mark De La Paz

October 20th, 2014 @ 11:54 am by Mark De La Paz

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Earlier attempts to ease further in EURUSD at the open of European trade ended up getting a quick turn-around to see the pair back above its 21D EMA at 1.2762. Interestingly the past two weeks has actually seen us developing a higher high and a higher low off our October 3 lows at 1.2501 a psychological support. With the weeks calendar looking bereft of heavy hitters we are facing prospects of a big picture technical correction for the sell-off from the 8th of May. From the daily action the next key point appears to be around the 1.2986/00 broder a consolidation resistance from September. Consider longs off the daily EMA’s with stops below the days lows.

EURUSDDaily

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October 16th, 2014 @ 12:28 pm by Mark De La Paz

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After yesterday’s sharp plunge on poor consumption figures from the US we have the dollar once again gaining ground across the board with equity markets selling off and demand for US treasuries picking up on haven plays. Note that there is a growing theme of uncertainty for global markets given the recent down grades of growth forecast by the world bank and other multilateral agencies. As such we have markets focusing on risk aversion strategies, aka look for a stronger yen and swiss franc, while the dollar capitalizes on the shift to ‘safer assets’.

MetaTrader - FX Clearing

Ahead we are still waiting for more US figures though what we have seen thus far underscores dollar strength as the claimant count dropped to 264K underscoring the bounce in jobs after August’s drop. Already consensus expectations for US Industrial Production and Capacity Utilization are calling for an improvement at 0.4% and 79.0% respectively. Should actual numbers go beyond these figures we will be talking about new lows in EURUSD, GBPUSD, AUDUSD, and NZDUSD.

calendar 101614

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October 15th, 2014 @ 12:18 pm by Mark De La Paz

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Thus far markets have been quiet with only half the average daily range for many of the majors as we wait for the day’s key event, US Retail Sales.  Note that with 70% of the US economy all about consumption Retail Sales would be our catalyst for getting out of the consolidation in EURUSD, GBPUSD, AUDUSD, NZDUSD, USDJPY and USDCHF. Consensus forecast here is calling for -0.1% month-on-month read in the headline figure so a positive read would be welcome for dollar bulls. Given the global slowdown and wobbling equity markets a strong US data however will be no guarantee for interest rate hawks to come in.

calendar 101514b

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October 15th, 2014 @ 11:07 am by Mark De La Paz

October 14th, 2014 @ 10:28 am by Mark De La Paz

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Following a series of poor economic numbers from the UK and the Eurozone we have Cable and the Euro easing back down with Pound Sterling already flirting with previous swing lows while EURUSD has formed a double top for its recent technical correction.

Potentially putting an end to speculations of a growing hawkishness in the BoE latest inflation metrics show pressures may be more on potential deflation as annualized Consumer Price Index came out at 1.2% well under the prior 1.5% figure, the asymmetric 2.0% inflation target, and 1.4% consensus forecast. Core CPI also turned out weaker than expected at 1.5% against expectations of 1.8% from 1.9% before. Note we are now fast approaching the previous weekly consolidation floor from September/October period, at 1.5890.

GBPUSDWeekly

 

For the Euro we have formed a double top in 4H charts with the 1.2605 region as its trigger. Catalyst for further losses are sentiment figures as the German ZEW Sentiment Index dropped into contraction territory, -3.6 against the  previous 6.9%. Region wide sentiment also proved a disappointment at 4.1% against a 7.1 consensus.

EURUSDH4

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October 9th, 2014 @ 11:34 am by Mark De La Paz

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Half a day after expressing its concerns over the weakening global outlook and the strength of the currency, the US dollar continues to lose ground across the board with the other candidates for monetary tightening taking the lead on pounding on the greenback. Not surprisingly our piercing patterns from Monday’s technical correction may now be seen as a near-term low for the Euro, Cable, Aussy, and Kiwi while double tops and bottoms have been triggered among the commodity currencies. At this point we still advocate a grain of caution on the Euro as we just see little fundamental reason for it to see sustained gains given the threat of an ECB that could go into a full blown quantitative easing. If looking to short the dollar we still prefer Cable and Aussy for such a move.

MetaTrader - FX Clearing

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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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