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Articles by Mark De La Paz

December 12th, 2014 @ 3:11 pm by Mark De La Paz

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Knee-jerk response for the stronger than expected preliminary consumer sentiment figures has been for a stronger dollar with hourly Pinocchio candles forming in EURUSD and GBPUSD and a solid close for USDJPY. Note we had the latest read at 93.80 jumping even higher than the consensus of 89.5 off the prior 88.80 keeping the hopes alive for retailers to have a happy holidays. Ahead we no longer have any major event for the day though the weekend and mondays open will be tricky with the Japanese elections Sunday.

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Given where prices are and the structure of most intraday charts we should be looking for further dollar strength across the board with Cable likely failing its attempt at a daily descending wedge break, at least for now, and Euro risking a close backunder the 21D EMA. Where we can look for speculative plays is USDJPY given that an Abe victory could see us gaping higher at the open.

1MetaTrader - FX Clearing

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December 12th, 2014 @ 1:53 pm by Mark De La Paz

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The Japanese Yen has spent the past week pulling back from last weeks 120 pop as traders evaluated their books ahead of Sunday’s elections in Japan. As such we have now seen prices at the 21DEMA, after spending the previous month above it and expanding the gap last week. With the market more or less now neutral the big question will be where will we find the currency come monday? A big Abe victory should mean that the tandem of Abe-Kuroda on fiscal and monetary policies will remain intact providing fuel for a surge past 120 again with some calling for another 1000 pips. A defeat could slow things down a trigger a pull back which will just make us even more interested in going long off 116.

1USDJPYDaily

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December 11th, 2014 @ 1:34 pm by Mark De La Paz

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With commodity prices already dropping, talk out of RBA Governor Glenn Steven’s appears to have put a stop to developing hints in the daily charts that AUDUSD out to see a year end pullback. After Tuesday’s high wave candle and yesterdays modest white body we have Aussy widening the weeks range as earlier attempts for a follow through rally were pulled back at European open on concern over surplus implications of falling commodity prices that eventually lead to new lows as the RBA governor spoke. After reassuring people that things were not so bad “economy is not in recession, it’s not contracting, we’re not having hundreds of thousands of jobs lost over a year” Mr. Stevens comes out to say that AUDUSD at 0.75 is better than at 0.85. Of course everyone knows that already but if a central bank governor were to come flat out and say it a patina of policy enters the picture. At least the bears are happy.

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December 11th, 2014 @ 9:19 am by Mark De La Paz

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Less than an hour from the latest Targeted LTRO we have Euro retreating once more off the highs as people are concerned of another slow uptake for the ECB’s special free money program. Recall that in its last outing the figures fell well short of both the ECB’s numbers and markets forecasts. This time around markets are forecasting that the ECB is intent on lending out from 90 billion to as much as 250 billion Euros, the upper end of the range suggesting that we actually have a pick up in business confidence. The big risk for end of year position squaring plays here will be a weak figure, the consensus is about 150 billion Euros, which would increase pressure for the ECB to go into a full blown QE program. Say hello to 1.2000 on a very poor uptake.

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December 10th, 2014 @ 2:09 pm by Mark De La Paz

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Though unable to hold earlier gains as UK data disappointed Tuesday, the British Pound still continues to show a nice looking descending wedge in its daily charts with the approaching holidays and end of the year making the pattern even more attractive to those looking to initiate some profit taking as books need to be closed and bonuses calculated. Reviewing the latest fundamentals we note that there is little reason to believe that another drop will be forthcoming. True Mark Carney is no longer talking hawkish but this simply means there is less chance for him to disappoint the markets. Meanwhile the UK economy is clearly distinguishing itself from its nearest neighbor and with the US not exactly reversing monetary policy we could be talking mediumterm lows off the mid 1.5500′s.

1GBPUSDDaily

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December 9th, 2014 @ 12:38 pm by Mark De La Paz

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Ever since Japanese Prime Minister Shinzo Abe announced a smap election this December the Japanese Yen has seen steady losses across the board in anticipation that the gamble by Abe would prove successful leading to greater control of the Diet. Five days until the main event however we are seeing signs of speculators hedging their nets as the push past 120 courtesy of the US NFP’s Friday was followed by a ‘dark cloud cover’ at the open of the week with Tuesday action now taking us below the psychological 120 mark. Considering the gains seen for the year, the coming holidays and year end, along with Sundays political exercise it is not unreasonable to expect more of this pull back from happening. Key now will be the question of reentering the consolidation from 117.10 to 119 in late October. Even as we note that we have not seen prices at the EMA’s for the past two months with 21D EMA at 117.85 beckoning for mean reversion.

1USDJPYDaily

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December 8th, 2014 @ 12:55 pm by Mark De La Paz

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Wellington and Aussy dealers were quick to see a follow through to the dollar’s NFP inspired rally from Friday though the rest of the market does not appear to be in any hurry for pushing things further. Recall Friday gave us our first plus 300K read for the Non-farm payrolls since June 2010 when the US jobs market saw a boost over a three month courtesy of uncle Sam. For the moment our interest lies with the Aussy where recent setbacks in the previous wonder economy and the central banks failure to sound the inflation horn has seen AUDUSD to lows last explored in the middle of 2010. While hardly critical it appear the surge in Job Advertisements according to ANZ, from 0.2% to 0.7% month-on-month has helped the pair bounce off earlier lows now skirting S1 at 0.8296 off the lower S2 with the candlestick building a potential daily hammer.

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Note we have had AUDUSD prices well off the daily EMA lines for more than a week with the widening gap suggesting a broader pressure to pullback.

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December 5th, 2014 @ 1:06 pm by Mark De La Paz

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Less than 30mins until the weeks big event for the US calendar and we are seeing plenty of indecision in the market with either narrow range bodies orlong wicks and tails among the dollar pairs. The sole exception USDJPY which has solidly broken past 120.00.

1-MetaTrader - FX Clearing

So how are we suppose to trade the US data. To those who have attended our webminars on NFP trading you know what we are looking for Quadrant 2 or Quadrant 3. With consensus forecast calling for an NFP read of 232K and an Unemployment Rate of 5.8% Quadrant 2, aka strong dollar scenario would call for numbers above 232K and below 5.8%. Quadrant 3 which calls for a weak dollar play means we fall short in NFP preferable below 200K and shoot up in the unemployment rate to well above the 5.8% consensus. A mix combination of these two numbers should have us abit more cautious. For choosing which pairs to trade to to go for a Yen or Swiss franc play with disappointing news or dump the Euro and look for a bearish break in GBPUSD should things turnout impressive.

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That said we would suggest avoiding the commodities even if AUDUSD look  to be in need of a pullback.

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