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Articles by Mark De La Paz

November 7th, 2014 @ 12:13 pm by Mark De La Paz

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Less than an hour and a half from the forex world’s monthly big event and we have most of the pairs stucj in tight ranges with even the days mover’s thus far, Aussy and Kiwi seeing enthusiasm doused before 1330GMT. Note that consensus forecast is calling for a slight retreat in the figure’s to 231K against the prior 248K. That said seasonal cycles actually favor a pick-up in the figure and even were we to get consensus it would still mean that almost a quarter million news jobs has been added and that the US recovery remains hail. Even at consensus the risk is high that we will still get a stronger greenback.
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November 5th, 2014 @ 6:36 am by Mark De La Paz

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It sounds oxymoronic that moments after it became clear that US leadership will be in for greater gridlock we have the US Dollar getting stronger. With the ballots already in and counted it appears that the legislative side of the US government has turned red with the republicans getting control of the senate while successfully fending off the democrats in the lower house. While people may be expressing their unhappiness with the Obama administration by going republican for the markets this could mean a US that will be taking a more hawkish stance whether in the negotiating table or in the form of pressure to the FOMC to accelerate normalization of its policy rates.

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October 31st, 2014 @ 10:23 am by Mark De La Paz

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Yen pairs are shattering resistance across the board following the earlier decision by the BoJ to underscore its dovish monetary policy. After months of disappointment as the BoJ Chief Kuroda found it difficult to push his fellow board members to do more we now have the BoJ announcing that free money is here to stay for an indefinite period of time. At a time when the FOMC gave its own QE a natural death the BoJ has come to the rescue announcing that it will be buying JGB’s to the tune of 8 to 10 trillion a month, roughly about $10 billion. Meanwhile Governor Kuroda is keeping his hands off the next round of government sales taxes saying that it was an issue for the executive though the Japanese Governments spokerman Suga is on the wires stating that future action between fiscal and monetary authorities will be coordinated. Interestingly there seems to be something of a cycle to the BoJ’s decision as we recall Q4 2013 as the start of  the banks aggressive monetary easing the last time.

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October 30th, 2014 @ 12:35 pm by Mark De La Paz

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We have just seen US Advance GDP coming at fast clip of 3.5% against a consensus forecast of 3.1% while the GDP Price Index came out 1.3% against a 2.0% consensus forecast. Given the split between headline figures and the inflation adjusted number implication is that growth is more about an increase in US output instead of higher prices. Don’t expect an early tightening but still look forward for a strong US dollar.

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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.

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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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