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Articles by Mark De La Paz

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.

1AUDUSDDaily

 

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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December 4th, 2014 @ 1:10 pm by Mark De La Paz

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As could be expected the ECB decided to keep rates steady with no word on when they will be moving into the real world of quantitative easing, i.e. US style bond buying. Recall that although the ECB has indeed put in place some bond buying programs these have so far been limited to the normal high grade corporate debt which could be seen as a natural extension of any central banks open market operations. Ahead we have press conference to watch out for where we will be looking for several things that could lead to further Euro weakness:

1) A definitive announcement on ECB purchases of government bonds
2) A hint of massive downside readjustment in the inflation forecast of 1.1% to something substantially below 1%
3) Germany’s Sabine Lautenschlaeger reversing her opinions

Absent any of these we will be risking the “sell the fact” portion of that famous adage, “Buy the rumor, sell the fact”. Market has bought the rumor with yesterdays drop now its time for a does of reality.

1MetaTrader - FX Clearing

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December 3rd, 2014 @ 2:30 pm by Mark De La Paz

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With the recent spate of bad numbers and another ECB meeting coming up, the single currency is seeing some pre-meeting dumping with people again hoping for hints of action from Mario Draghi. Given all this we would be remiss to point out that we actually risk disappoint for the market in tomorrows release as Draghi remains hesitant to actually do real US style QE which would be the last bullet in its arsenal to get the economy going. On a side note there has been an emphasis of late from the ECB for European governments to do there part in buttressing the recovery with spending.

1MetaTrader - FX Clearing

From the calendar the days earlier releases merely reinforced the EU dumping with annualized Retail Sales for the region short of consensus at 0.6% against expectations of a 1.4% read. Ahead key figure for the market will be the US ISM Non-Manufacuring Index where market is looking for an improvement to 57.5 from 57.1 that should see even more Euro weakness for today.

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December 2nd, 2014 @ 12:41 pm by Mark De La Paz

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The first day of the last month of the year turned out to be an explosive trading day with Gold in particular opening with a downside gap only to see a the market rip closing higher with the daily range at $78. The move comes as the monthly close for November turned into a high wave candle, suggesting a possible reversal, and resting just above the 61.8 Fib retracement level of the rally from October 2008. For today we have the yellow metal already seeing a $20 pullback with prices just above the daily pivot and average ranges at $23. Consider longs off the 1191.55 pivot as we begin to see hammers forming in intraday charts with stops ideally $5 below the said pivot. Note medium term we expect to see more of a base building as the month progresses as there remains little excuse for a sustained Gold rally.

1XAUUSDMonthly

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November 28th, 2014 @ 7:15 am by Mark De La Paz

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Thursday finally saw the Euro ease with a rejection from the 21D EMA line and another lower low off the previous days peak. With the engulfing close in the daily charts we are now looking for follow through weakness in EURUSD with the keyprice target at 1.2358, our swing low from earlier in November. Ahead we are looking at what is likely to be alight data day with the US feeling the holiday spirit with no releases while in Europe we have merely flash estimates, albeit of an important number CPI, the consensus forecast calling for an 0.3% read in the headline and 0.7% read for its core. For the markets a weak read in Europe inflation metrics will be just the thing we need to actually get some push down going for EURUSD.

1EURUSDDaily

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November 26th, 2014 @ 2:19 pm by Mark De La Paz

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Just like yesterdays trade where the market was unable to get traction on good preliminary US GDP data and eventually reversed we are once again seeing a retreat from the knee-jerk response by traders. This time around we are seeing long wicks and indecision candles after the initial move saw dollar dumping as Core Durable Good contracted by -0.9% against expectations of a 0.55 rebound from the previous -0.1% though the headline number did come out better at 0.4% against -0.4% forecasts due to an unexpected surge in the Transport sector. Other numbers were equally disappointing as Personal Income and Spending in the US both turned out at 0.2% short of the 0.4% consensus forecast.

1MetaTrader - FX Clearing

Ahead markets will be looking at more numbers with Final figures for the University of Michigan Consumer Sentiment suddenly getting greater importance as it holds the key to further dollar loses should it confirm yesterdays result of poor Consumer Confidence from the conference board and of course headline Durable Goods. Consensus forecasts has us looking for a 90.2 read against a prior 89.4 figure.

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November 25th, 2014 @ 2:28 pm by Mark De La Paz

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Knee-jerk response to better than expected US data has been for a stronger dollar though traction appears to be a problem as we have
long tails and hammers in many charts by the close of the hour. Note that while the data is in agreement with our overall trends for a stronger dollar across the board many of the pairs are at critical levels within proximity of key price areas seeing a technical correction.

1-MetaTrader - FX Clearing

Looking at the numbers we had preliminary GDP coming in at 3.9% year-on-year well above the consensus forecast of 3.3% with the Chain Price Index coming in at 1.4% against the 1.3% expectations suggesting inflation trends are slightly higher than the trend forecast. Essentially this is argument that the market ought to be watching for the potential of markets to talk up US rate hike story. Though we have more things on the cards to watchout for before the day is over.

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