The market was very quiet today from Asia session all the way to NY wrap, because there were no significant economic releases and the sentiment was still the same with few changes.
NZD continues to be the dominant pair from the strong sentiment of RBNZ rate cut and high yield market, AUD also benefited from the risk on sentiment. The equity markets have showed great evidence of risk on sentiment where European stocks all closed higher and 3 major US stock indices Dow, S&P and Nasdaq all have closed at record high at the same time - Last time the 3 major indices closed record high at the same time was back in 1999.
USD also gained strength back on the ok unemployment claim but mainly the FED William’s comment for rate hike by 2016.
The biggest gainer will be the oil market as we have broken above $43 again. The strong shift of the sentiment was due to Saudi comment on next month’s meeting with OPEC & Non-OPEC members to discuss stabilizing oil price.
Of course, market participants have already priced in now for this rumour, and yes, it might very well be a rumour with no agreeable conclusion like last meeting they had.
This of course helped CAD to gain strength tremendously, especially from the negative sentiment yesterday from the large built up of crude oil inventories and API report.
That is the thing about sentiment, it really changes every moment and you cannot really predict it with certainty, so that is where the importance of minimizing the risk and stop loss come in, as you would never know for sure how long a sentiment will last.
JPY & EUR both lost some strength due to USD gaining strength, CHF remains to be neutral to bullish as no news is good news sentiment.
The worst currency remains to be GBP. New poll has showed that UK is indeed stepping into recession with expected contraction on the economy and GDP projections, also the possibility of further rate cut to 0.10% by the end of 2016.
The analysis also projected GBP/USD to be as low as 1.27 by the end of 2016.
Not a lot of good news for UK and GPB.
Hours ago NZD released a better than expected retail sales q/q and core retail sales q/q, actually a lot better than expected at 2.3% and 2.6% respectably in comparison to expected numbers of 1% and 1.1%.
That just added on more strength into NZD.
The strength to weakness for today are CAD > NZD > AUD > CHF > USD > JPY > EUR > GBP
Our current orders of GBP/JPY is still in play, and our new order of NZD/CAD also got filled.
Our pending order of EUR/CAD never got filled and we have cancelled the trade.
Now based on fundamental and sentimental, we still put our bets on NZD & AUD
however, we have changed our view on the weakness of CAD as now the comments from Saudi will really help CAD to gain more strength even though I personally think this is just a rumour because the goal for Saudi is really to gain the market shares.
I felt that they purposely released this comment to boost the oil price up.
Nevertheless, because of the buying rumour selling fact sentiment, we might continue to see CAD gaining strength and it is not a good idea to go against it now unless sentiment changes again.
I’m in drawdown of my NZD/CAD now, i’m more confident just because NZD has such a strong sentiment and the fundamental datas today were also great.
I’m betting to see the high of equity market to retrace next week, and the oil market to retrace or even reverse next week when this heated up sentiment passes, so that is why i’m planning to hold my NZD/CAD trade for now.
If not because of NZD, i will probably get out of any short CAD trade for now.
GBP/JPY is still a good and high conviction trade for me as GBP continues to be the worse currency to sell and JPY is neutral to bullish. Nothing really changes the direction of this pair.
The only pair i’m looking to enter at swing base will be short GBP/AUD or GBP/NZD but because i already have NZD, GBP, JPY and CAD currencies in, i can only look to buy AUD against perhaps EUR as they might lose strength once September resumes.
Let’s take a look at the charts.
NZD/CAD is still in a uptrend in daily chart and we might get into range or breakout above or below. I’ll consider to get out if we close below 0.9350 by the end of this week which is tomorrow.
GPB/JPY is looking to have some retrace as we’re near the support of 130.25, the candlestick is very small as there is really no movement for this pair for this week, especially considering the daily range is around 300 pips. I’m still holding it because i still expect to see it dips down further, however, i’m also expected it to retrace a bit to my original entry.
EUR/CAD was our previous trade call and thankfully because of our Stop Order entry technique, we were never filled. This would have been a big loser and again, that is why SL is very important as no one could have known the Saudi would give another comment of meeting today which was the main reason WTI surged today.
I’m not looking to reverse my view to buy CAD because the fundamental data still shows oversupply and OPEC had been failures many times before, so it’s just a sentiment play, if i want to take advantage, I’ll do session trade or pick something that is really weak fundamentally such as GBP.
AUD/NZD is another possible pair to get into if I want to buy AUD.
It has less effect in comparison of GBP/AUD or AUD/USD but it also has less risk as mentioned previously, both AUD & NZD are in the same boat. They are both commodity currency and both act the same way in terms of sentiment.
Fundamentally, AUD still have a better edge than NZD as the Iron Ore is still in high demand, same as copper and gold, secondly, NZD still has more room to cut rate and they are considered cutting rate to 1.5% which is same as AUD. Third reason is that AUD is a much popular currency for carry trade and speculation, and finally both central banks have expression for further easing but RBNZ has more conviction in at least one more rate cut to at least 1.75%.
So again, you really have to use a magnifier when trading AUD/NZD as they are just so similar in terms of currency traits.
Right now we’re still below 200 EMA with room to go upside and we have a very large Kangaroo Tail today.
AUD/JPY will also be another good pair to buy AUD against with. We have a nice big shadow and are in a retrace of uptrend, there is a lot of rooms to go upside as well.
Of course, both AUD/NZD & AUD/JPY are all good but i’m already in GBP/JPY & NZD/CAD, which will increase my exposure to JPY or NZD.
But the good thing is that i’m in LONG JPY now and if i get in AUD/JPY i’ll actually hedge JPY by selling it. Same as NZD, i”m in LONG NZD now and if i get in AUD/NZD i’ll actually hedge NZD by selling it.
So i guess i could technically get into both trade.
CAD/JPY is another good trade to get into, as mentioned, oil is in good sentiment now and the overall risk on sentiment also decreased the strength of JPY.
Technically we also have a strong big shadow.
GBP/USD is a good pair to get into because of the fundamental reason of strength in USD and weakness in GBP. However, USD is in such a swing mood and sentiment drives it up and down, furthermore, we have a PPI & retial data coming out tomorrow and consumer sentiment, it is better to stay out until next week.
So in conclusion,
Our GBP/JPY is still a valid trade because GBP is very weak and JPY is bearish fundamentally but bullish sentimentally for now. We don’t expect to see any movement in this pair but once the sentiment turns negative tomorrow or next week when equity markets retrace (and it will retrace as this is a cycle of the market, especially when they hit all time high, there will always be profit taking)
Our NZD/CAD is not looking so good and we’ll get out if we close below 0.9350 by Friday market close. The only conviction we have is the strength in NZD but we really don’t want to sell CAD now as the strong sentiment is favouring CAD.
Our EUR/CAD has been cancelled due to not filled and now the sentiment has shifted for CAD as well.
We’re looking to get into buying AUD and possible candidate is AUD/JPY or AUD/NZD.
AUD/NZD will be much safer as both are in the same boat, but AUD/JPY will have larger movement.
CAD/JPY is a good trade to get into for a very short-term play, possibly session play in London Session or now.
GBP/USD is a good pair to enter if you want to short GBP but now is probably not a good time as we still have 2 more risk events coming up at next NY session, my suggestion is to get into GBP/USD trade at the risk event if the results are positive for USD. Then you can hold the trade over the weekend.
The market was very quiet today from Asia session all the way to NY wrap, because there were no significant economic releases and the sentiment was still the same with few changes.
NZD continues to be the dominant pair from the strong sentiment of RBNZ rate cut and high yield market, AUD also benefited from the risk on sentiment. The equity markets have showed great evidence of risk on sentiment where European stocks all closed higher and 3 major US stock indices Dow, S&P and Nasdaq all have closed at record high at the same time - Last time the 3 major indices closed record high at the same time was back in 1999.
USD also gained strength back on the ok unemployment claim but mainly the FED William’s comment for rate hike by 2016.
The biggest gainer will be the oil market as we have broken above $43 again. The strong shift of the sentiment was due to Saudi comment on next month’s meeting with OPEC & Non-OPEC members to discuss stabilizing oil price.
Of course, market participants have already priced in now for this rumour, and yes, it might very well be a rumour with no agreeable conclusion like last meeting they had.
This of course helped CAD to gain strength tremendously, especially from the negative sentiment yesterday from the large built up of crude oil inventories and API report.
That is the thing about sentiment, it really changes every moment and you cannot really predict it with certainty, so that is where the importance of minimizing the risk and stop loss come in, as you would never know for sure how long a sentiment will last.
JPY & EUR both lost some strength due to USD gaining strength, CHF remains to be neutral to bullish as no news is good news sentiment.
The worst currency remains to be GBP. New poll has showed that UK is indeed stepping into recession with expected contraction on the economy and GDP projections, also the possibility of further rate cut to 0.10% by the end of 2016.
The analysis also projected GBP/USD to be as low as 1.27 by the end of 2016.
Not a lot of good news for UK and GPB.
Hours ago NZD released a better than expected retail sales q/q and core retail sales q/q, actually a lot better than expected at 2.3% and 2.6% respectably in comparison to expected numbers of 1% and 1.1%.
That just added on more strength into NZD.
The strength to weakness for today are CAD > NZD > AUD > CHF > USD > JPY > EUR > GBP
Our current orders of GBP/JPY is still in play, and our new order of NZD/CAD also got filled.
Our pending order of EUR/CAD never got filled and we have cancelled the trade.
Now based on fundamental and sentimental, we still put our bets on NZD & AUD
however, we have changed our view on the weakness of CAD as now the comments from Saudi will really help CAD to gain more strength even though I personally think this is just a rumour because the goal for Saudi is really to gain the market shares.
I felt that they purposely released this comment to boost the oil price up.
Nevertheless, because of the buying rumour selling fact sentiment, we might continue to see CAD gaining strength and it is not a good idea to go against it now unless sentiment changes again.
I’m in drawdown of my NZD/CAD now, i’m more confident just because NZD has such a strong sentiment and the fundamental datas today were also great.
I’m betting to see the high of equity market to retrace next week, and the oil market to retrace or even reverse next week when this heated up sentiment passes, so that is why i’m planning to hold my NZD/CAD trade for now.
If not because of NZD, i will probably get out of any short CAD trade for now.
GBP/JPY is still a good and high conviction trade for me as GBP continues to be the worse currency to sell and JPY is neutral to bullish. Nothing really changes the direction of this pair.
The only pair i’m looking to enter at swing base will be short GBP/AUD or GBP/NZD but because i already have NZD, GBP, JPY and CAD currencies in, i can only look to buy AUD against perhaps EUR as they might lose strength once September resumes.
Let’s take a look at the charts.
NZD/CAD is still in a uptrend in daily chart and we might get into range or breakout above or below. I’ll consider to get out if we close below 0.9350 by the end of this week which is tomorrow.
GPB/JPY is looking to have some retrace as we’re near the support of 130.25, the candlestick is very small as there is really no movement for this pair for this week, especially considering the daily range is around 300 pips. I’m still holding it because i still expect to see it dips down further, however, i’m also expected it to retrace a bit to my original entry.
EUR/CAD was our previous trade call and thankfully because of our Stop Order entry technique, we were never filled. This would have been a big loser and again, that is why SL is very important as no one could have known the Saudi would give another comment of meeting today which was the main reason WTI surged today.
I’m not looking to reverse my view to buy CAD because the fundamental data still shows oversupply and OPEC had been failures many times before, so it’s just a sentiment play, if i want to take advantage, I’ll do session trade or pick something that is really weak fundamentally such as GBP.
AUD/NZD is another possible pair to get into if I want to buy AUD.
It has less effect in comparison of GBP/AUD or AUD/USD but it also has less risk as mentioned previously, both AUD & NZD are in the same boat. They are both commodity currency and both act the same way in terms of sentiment.
Fundamentally, AUD still have a better edge than NZD as the Iron Ore is still in high demand, same as copper and gold, secondly, NZD still has more room to cut rate and they are considered cutting rate to 1.5% which is same as AUD. Third reason is that AUD is a much popular currency for carry trade and speculation, and finally both central banks have expression for further easing but RBNZ has more conviction in at least one more rate cut to at least 1.75%.
So again, you really have to use a magnifier when trading AUD/NZD as they are just so similar in terms of currency traits.
Right now we’re still below 200 EMA with room to go upside and we have a very large Kangaroo Tail today.
AUD/JPY will also be another good pair to buy AUD against with. We have a nice big shadow and are in a retrace of uptrend, there is a lot of rooms to go upside as well.
Of course, both AUD/NZD & AUD/JPY are all good but i’m already in GBP/JPY & NZD/CAD, which will increase my exposure to JPY or NZD.
But the good thing is that i’m in LONG JPY now and if i get in AUD/JPY i’ll actually hedge JPY by selling it. Same as NZD, i”m in LONG NZD now and if i get in AUD/NZD i’ll actually hedge NZD by selling it.
So i guess i could technically get into both trade.
CAD/JPY is another good trade to get into, as mentioned, oil is in good sentiment now and the overall risk on sentiment also decreased the strength of JPY.
Technically we also have a strong big shadow.
GBP/USD is a good pair to get into because of the fundamental reason of strength in USD and weakness in GBP. However, USD is in such a swing mood and sentiment drives it up and down, furthermore, we have a PPI & retial data coming out tomorrow and consumer sentiment, it is better to stay out until next week.
So in conclusion,
Our GBP/JPY is still a valid trade because GBP is very weak and JPY is bearish fundamentally but bullish sentimentally for now. We don’t expect to see any movement in this pair but once the sentiment turns negative tomorrow or next week when equity markets retrace (and it will retrace as this is a cycle of the market, especially when they hit all time high, there will always be profit taking)
Our NZD/CAD is not looking so good and we’ll get out if we close below 0.9350 by Friday market close. The only conviction we have is the strength in NZD but we really don’t want to sell CAD now as the strong sentiment is favouring CAD.
Our EUR/CAD has been cancelled due to not filled and now the sentiment has shifted for CAD as well.
We’re looking to get into buying AUD and possible candidate is AUD/JPY or AUD/NZD.
AUD/NZD will be much safer as both are in the same boat, but AUD/JPY will have larger movement.
CAD/JPY is a good trade to get into for a very short-term play, possibly session play in London Session or now.
GBP/USD is a good pair to enter if you want to short GBP but now is probably not a good time as we still have 2 more risk events coming up at next NY session, my suggestion is to get into GBP/USD trade at the risk event if the results are positive for USD. Then you can hold the trade over the weekend.