Leaves of Grass

Trading & Chemistry are to completely different things but they are very similar at the same time. The are both a science. In chemistry one must know what elements are in the compound, how they react to other elements in order to create a new compound or molecule. Forex is the same way. We must know what elements are in the market causing the current move(or compound). We must also know how the market will react to future elements it will encounter, and how this will change the current move(compound). My "elements" of the forex market are economic fundamentals & the concept of supply & demand, as this is what truly drives the markets.
This is my journal of my work understanding the science behind forex markets.
Science - a systematically organized body of knowledge on a particular subject.



Instead of trying to trade the markets looking in my rear view mirror, i will trade them looking at the signs on the road.
Fundamentals are what really move the markets whether you want to believe it or not and the the Central Banks are in the driver seat. It is important to listen to what they are saying and thinking as this will give you a huge edge on the market.

Easy Example: SNB has said they have put a floor on the EURCHF at 1.200 and they have spent billions selling their own currency to keep it down. Know this you shouldnt even be thinking of getting long this pair around 1.21 area as you know for a fact the price will not drop more than 100 pips.

Economic Indicator Cheat Sheet

Main Indicators Central Banks Look At

1. Production - It is important to keep track of how much the country is producing.
   1. Indicators To Use:
      1. GDP
      2. PPI
      3. IPI

      
      
      
      
      
      

   
   
   
   
   
   

2. Geopolitical Risks -It is important to keep track of things that can cause risk in the markets, such as elections, wars, etc.
   1. Indicators To Use:
      1. Bloomberg News
      2. Other News Sources.

      
      
      
      
      
      

   
   
   
   
   
   

3. Employment - It is important to pay attention to employment numbers.
   1. Indicators To Use:
      1. Employment Rates.

      
      
      
      
      
      

   
   
   
   
   
   

4. Growth - It is important to also pay attention to how much an economy is growing as this can affect inflation
   1. Indicators To Use:
      1. ISM
      2. IPI
      3. Retail Sales
      4. CPI(Commodity Price Index) - For AUD & CAD Mainly

      
      
      
      
      
      

   
   
   
   
   
   

5. Inflation - It is important to pay close attention to inflation as well. This will often be the cause of rate changes.
   1. Indicators To Use:
      1. CPI
      2. PPI
      3. ISM

      
      
      
      
      
      

   
   
   
   
   
   

6. Supply & Demand - It is important to understand the supply and demand of the currency you are trading.
   1. Indicators To Use:
      1. Trade Balance
      2. Current Account

      
      
      
      
      
      
      

   
   
   
   
   
   

Economic Indicators Explanations

(Most People Know This Stuff But I Like to Have It Written Down For My Sake)

Economic Release I Watch For

GDP
PPI
IPI
Employment Rates
ISM
Retail Sales
CPI(Commodity Price Index) - For AUD & CAD Mainly
CPI
Trade Balance
Current Account
PMI

Technical Entry Method

Trading On Call
Only Trade Daily Time Frame
Inside Bar Formations Only
Enter on the 1st Break Out Of Inside Bar on 4 Hour Chart.
ONLY TRADE FIRST BREAK OUT!

NOTE: If price breaks inside bar but doesn't close above break out, inside bar set up is nullified.

Check Your Daily Charts Every Day at 3 PM MT For Set Ups. If set up is spotted check back every 4 hours for break out. If no set ups are spotted, close your platform and get ready for tomorrow.

"The Secret To Your Success Is Hidden In Your Daily Routine"

This part of the thread is for everything outside of trading, that affects my trading. This includes things like, discipline, daily habits, hobbies, religion, work/education, etc.
The above quote has always been one of my favorites and I do believe that it is very true. The secret to our success is hidden in our daily routines, or in other words, comes from our daily routines. I believe in order for me to be successful in forex I need to first be successful in all other aspects in my life. I firmly believe that everything in this world is tied to one another and affects one another. How i feel based on my health, education, or relationships will affect my emotions and views, which will in turn affect my trading. That being said I do not think there is a link as direct to say that if I am unhealthy I will suck at trading or be unsuccessful. I do not think one area can affect one person that much. That being said there are "habits" of wealthy and successful people.

I like to think of trading as a sport. Just like real football,football, basketball, and baseball. In order to be successful at a sport you must be a true athlete. And there is much more to being a true athlete than just being "skilled". Every single person can develop the skill to become a professional athlete and many people do, but not every one gets to become a professional. Just because you can shoot a jump shot like jordan, does not mean you will achieve what Jordan has Achieved. The thing that separates professionals from some one who has the skill of a professional is all the other attributes like work ethic, belief, faith, health, determination, knowledge & desire. These are things that are part of your daily routine and these are the things that truly make or break you.

Work Ethic/Discipline
You may be able to shoot a basket, or nail an entry just as good as any professional trader can but if you don't have the proper work ethic you will never be successful. You may be able to identify proper entries but if you aren't able to get your self up early in the morning day after day in order to be around when these opportunities present themselves, you will miss them. Same goes for any sport. You may be able to sink 3 pointers all day, but if you dont have the work ethic to get up every morning, work out, and practice every day you will never be successful.

Belief/Thought
Confucius said, "He who says he can and he who says he can't are both usually correct." If you do not believe in your self and in your abilities and your desire to obtain success in trading or whatever it may be then you never will be successful. It is also true that you are what you think. What you think and believe manifest's itself into reality in some way, shape or form. You need to truly believe that you can achieve this success especially if your life depended on it, and guess what IT DOES! I recommend every one goes out and reads "Think & Grow Rich" by Napoleon Hill, this is an amazing book that goes further into this.

Faith
Faith is extremely important to success. It is one thing to believe something and it is another thing to have faith in this belief. Faith is what makes a belief real. If you just have a belief in something, you in other words just want something to happen. Faith is an unreserved opening of the mind to something. Belief clings, but faith lets go. Having faith is something doesn't mean you want something to happen. It means you are going to let it happen. Faith is letting what you believe and think manifest itself not trying to force it.

Health
Staying healthy is extremely important if you wish to become successful. You need to be healthy enough to carry out the task required to become successful. You need to have healthy sleeping habits in order to be able to wake up every morning with a clear head. You need to keep your body healthy in order for your to physically be able to do the job for as long as you can. You need to be healthy mentally in order to evaluate situations and task properly. You also need a healthy state of mind in order to truly believe in yourself and your abilities.

Determination
You must have extreme determination if you wish to be successful at anything. Nothing comes easy. Every one who fails to do what you wish to achieve failed only when they gave up their determination to achieve that goal. Determination is what separates the successful people from the unsuccessful people. Bill Gates 1st business venture failed and he still became immensely successful. This is because he did not quit afterwards, he got back on the horse and tried again unlike the majority of people who will quit the second the encounter real hardship or failure. Benjamin Franklink dropped out of school at age 10, yet do to his determination to pursue knowledge he came up with more inventions then the smartest formally educated people of his time. And the best example, Thomas Edison failed 1000 times before getting the lightbulb right. For him to continue to press on after 600 failures shows extreme determination that not many people have.

Knowledge
Knowledge, not education. Knowledge is extremely important to become successful and in order to stay successful. You need to have the knowledge required to properly understand what it is you want to be successful at, how you will be successful at it and what you need to do in order to be successful at it. You must also stay current on all the new knowledge coming out regarding the field you wish to be successful in in order to be able to keep up with the times as change is constant. You must also have knowledgeable about yourself as well. You need to be self aware in order to truly know where you stand in relation to reaching success.

Desire
You must have proper desire in order to be successful. You must want it so bad that there is literally nothing that can stop you from obtaining it. You also must know what your desire is so you know what it is you want. If you just have desire but dont know what it is for you are a missile with no target.

All of these things tie together and build off of each other. All of these things need to cultivated and involved into your daily habit in order to be successful.

How I Incorporate and Cultivate These Things Into My Daily Routine

Work Ethic/Discipline/Health
This can easily be cultivated by doing simple things day in and day out. Some easy ones are:

1. Wake up early every day at the same time. I for example wake up at 6:50AM every morning.
2. Make a list of everything you want to do that day.
3. Work out everyday. This is another simple thing you can do every day to build discipline, on top of that it will make you healthier
4. Trade the market at the same times every day. Try to keep your trading very habitual. This way it will become second nature and will also build your discipline and will decrease your risk of over trading. I personally trade the 4 Hour chart and only look at my charts every 4 hours. All of my trades will be placed a few minutes before or after these 4 hour closes as well(or should be).
5. Be on time. Try to always be on time to whatever it is you are doing. This is just another small thing that builds discipline.
6. If you can do all of these things then you will cultivate a good work ethic.

Belief/Thought/Desire
This can be cultivated by some techniques in Napoleon Hills Book.

1. 6 Steps that can help you cultivate your belief in your goal and obtaining it(this will also help build discipline).

1. Fix in your mind the exact amount of money you desire. It is not sufficient merely to say “I want plenty of money." Be definite as to the amount.
2. Determine exactly what you intend to give in return for the money you desire. (There is no such reality as “something for nothing.")
3. 
   Establish a definite date when you intend to possess the money you desire.
4. Create a definite plan for carrying out your desire, and begin at once, whether you are ready or not, to put this plan into action(Trading Plan).
5. Write out a clear, concise statement of the amount of money you intend to acquire, name the time limit for its acquisition, state what you intend to give in return for the money, and describe clearly the plan through which you intend to accumulate it.
6. Read your written statement aloud, twice daily, once just before retiring at night, and once after arising in the morning. AS YOU READ, SEE AND FEEL AND BELIEVE YOURSELF ALREADY IN POSSESSION OF THE MONEY.

Faith & Determination
This one is what will tie the two above together. If you have a clear trading plan that you believe works and you are practicing the right discipline and work ethic to properly execute that trading plan you must have faith in what you are doing. You must let go and be to determined to keep doing what you are doing. This means don't try and change your strategy after a couple of losses, or change your risk management to try and make back some losses. The only reason you do these things is when you don't have faith in what you believe works. Faith can be cultivated by practicing or further educating yourself on what ever it is you believe(science, religion, the space turtle from Its Always Sunny, or whatever it is you believe makes the world/universe tick) every day(exray, daily study, meditate etc). This will allow you put faith into other things as well like yourself, other people etc and will also build discipline which will build work ethic.

Knowledge
Never stop learning. Never think you know everything there is to know about what is moving the markets. There is always something to be learned every day in these markets. Also like I said before there is a big difference between education and knowledge. Seek knowledge and educate yourself and avoid education services. Everything you need to know about the market can be obtained for free. A great quote about educating yourself: “Formal education will make you a living; self-education will make you a fortune.” You can stay knowledgeable about the markets by just staying up to date with what is going on in the market and why it is moving(Review News Daily/Weekly). This will also build your work ethic and discipline by making sure you know what is going on in the market. Also by knowing what is going on in the market and why it is moving you will then cultivate further belief into your trading/trade plan.

Weekly Fundamental Outlook

EUR(Bearish)
Central Bank Rate: 0.05%

ECB Summary

1. The ECB is mainly focused on inflation rates because it is below their 2% mark. the main a central bank increases inflation is by cutting interest rates. ECB just cut interest rates again for the second time this year.
2. A Strong Euro, stagnant growth and the missed inflation has caused the EU economy to struggle in its recovery and it is now obvious that they are lagging behind the rest of the world in this manner with negative interest rates.
3. ECB rates are currently negative. this means we need to pay to hold the euro as a long position. all these factors are making the EUR very bearish.

Key Indicators To Watch:
Inflation(Target 2%)

Last Weeks Fundamental Releases
German ZEW Economic Sentiment - Actual: 6.9 Forecast: 5.2 Previous 8.6

1. Has decreased Month Over Month since 2014.
2. It appears that the downtrend is finally starting
3. to slow. Before it would miss by double digits every month. This time it only missed by single digits.

Targeted LTRO - Actual 82.6B

1. The European Central Bank has today allotted €82.6 billion to 255 counterparties in the first of eight targeted longer-term refinancing operations to be conducted between September 2014 and June 2016. The programme is designed to enhance the functioning of the monetary policy transmission mechanism by supporting bank lending to the real economy.
2. This is to further their efforts to keep money in the economy and out of the banks.
3. Good for the economy, and should strengthen EUR but not till it is further along with the program. I think by the 4/8 LOTRO's are done we will start to see real turn around on EUR.
4. The second TLRO, as previously communicated, will be announced on 9 December and allotted on 11 December.

Current Account - Actual 18.7B Forecast: 14.3B Previous: 18.6B

1. Not majorly important but this will strengthen the currency a tad as their is a surplus instead of a deficit

Weekly Fundamental Summary
The ECB is taking further steps to get money out of the banks and into the economy to promote a recessions and it looks like the ZEW sentiment indicator is finally starting to see a slow down to the weakening economy.

Overall Summary
The central banks current policies were not having the effect they would have liked so they decided to cut rates into the negatives so it now cost money to hold your cash in the banks overnight. This sounds scary but the reason they do this is because they dont want the banks to just be hoarding all of their cash, this encourages them to loan it out into the economy to help it recover instead of just holding on to it and paying fees.

After last weeks news events I wont be surprised to see the EUR’s down trend begin to slow & start searching for a bottom. That being said I would still look to see against stronger currencies but will only be looking for singles, not homeruns.

GBP(Bullish)
Central Bank Rate: 0.50%

BOE Summary

1. BOE are trying to resist being bullish as long as data will allow them.
2. Instead of focusing on good data numbers they have focused on the negative ones, mainly wage growth.
3. wage growth needs to improve to where it is inline with inflation before GBPUSD will rally again.
4. Wage growth is not a major indicator so the BOE may disreagard it if they continue to see it stagger & may try to combat inflation with rate hikes.

Key Indicators To Watch:
Inflation (Target 2%)
Employment Data(Wage growth and average earnings)

Last Weeks Fundamental Releases
CPI - Actual: 1.5% Forecast 1.5% Previous: 1.9%

1. Since January CPI has been decreases and This month it retested its yearly low at 1.5%
2. If the CPI is going down then inflation is likely going down also which means rates won't be looking to get hiked.
3. Overall this weakens the Pound A Bit.

PPI Input - Actual: -.06% Forecast: 0.1% Previous: -1.7%

1. PPI Input numbers also missed and have been negative nearly all year except for january.
2. This also weakens the currency.

Average Earnings Index 3m/y - Actual 0.6% Forecast: 0.5% Previous:-0.1%

1. Wages have been falling since March and bottumed out at August at -0.2%.
2. This Month the bounced almost back to where they were in June at 0.7%.
3. This is very good for currency as this will help send it back on its bull run.
4. BOE has been looking for wage growth and now they are starting to see it.

Claimant Count Change - Actual -37.2K Forecast: -29.7K Previous: 37.4k

1. Employment Numbers have remained strong all year and are continuing to do so.
2. Beat expectations so economy is strengthening.

Unemployment Rate - Actual: 6.2% Forecast: 6.3% Previous: 6.4%

1. Unemployment has continued to decrease all year and just pushed new yearly lows this month.
2. This shows the economy is really in good shape.

Retail Sales - Actual: 0.4% Forecast: 0.4% Previous: 0.0%

1. Retail sales have been decreasing all year basically but have continued to be better than expected most of the time.
2. This decreasing trend looks to have bottomed out since June has either stayed the same or been increasing.

Scottish Independence Vote - Actual: No Forecast: No

1. Scotland has voted to stay apart of the United Kingdom.
2. This is huge because this was one of the things that was really holding the Pound back the last 3 months and with this out of the way the Pounds fundamentals will continue to stand out.

Weekly Fundamental Summary
With the scottish Independence vote being over with and the result being a No, i expect to pound to really begin to strengthen over the next few weeks especially against weaker currencies. Overall the fundamentals for the economy are doing good. Employment has been great all year, Wages are begging to see growth, which is what the BOE wanted, and retail sales downtrend looks to be bottoming out and turning around.

Overall Summary

Since inflation is increasing so much due to their QE program and more people finding work, the money they are actually getting paid is stagnating or even falling in some parts of the economy. Since this is not a major indicator usually used by CB it is leading us to believe that they are trying to keep the bank rate low. Every other part of the economy is doing good(like the other major indicators). since this is making the economy do good this will eventually have to draw investors & rate hikes. As of now we will listen to BOE until they start to acknowledge the good recovery. then we will be very bullish.

With Scottish Independence vote over and wages growing along with unemployment I will be watching closely for the BOE to begin sounding more bullish.

AUD(BULLISH)
Central Bank Rate: 2.50%

RBA Summary

1. RBA began talking down the AUD stating their could be a big fall and the market is not prepared. But after inflation hit the upper band of the RBA target they recanted these statements and have since stopped trying to talk it down.
2. With Inflation now at 2.9% the RBA need to either try to lower this with rate hikes(good for currency) or by spurring economic growth away from mining(Gold & Silver Holding it Down)
3. Since RBA has recanted these statement since the inflation figures they could begin to be more hawking for the AUD in the coming weeks in order to help bring down inflation.
4. High Interest Rates & Steady interest Rates.

Key Indicators To Watch:
Australian Inflation(Target 2-3%)
RBA Comments & Speeches(Looking for Less Neutral Comments)
Commodity Prices

Last Weeks Fundamental Releases
Monetary policy Meeting Minutes

1. Not much has changed in RBA’s eyes.
2. Expect growth to stay just above average for next year or so.
3. They expect mining industry to decline over the next year or so.
4. Expect growth in Non Mining Business to grow.
5. Labor markets have remained “subdued”.
6. Interest rates have remained low and have declined a bit for borrowers which is good for economy.
7. Overall saw mostly strength in economy and inflation and expect them to grow over the next couple years
8. Board made decision to leave cash rate unchanged at 2.5%

Weekly Fundamental Summary
With this meeting it appears to me that the AUD is very mixed/neutral. RBA sees strength and growth and big areas such as economy but is also seeing expected weakness in major areas of their economy such as mining business. Overall the seem to be slightly bullish for the next year or so as long as fundamentals stay the same.

Overall Summary
As stated above they need to battle their current inflation by either hiking rates or increasing economic growth in non mining business and after this latest meeting it appears that they are going to take the economic growth route and leaves rates the same for the conceivable future.


CHF(BEARISH)
Central Bank Rate: <0.25%


SNB Summary

1. SNB has continued to enforce the 1.20 floor they put on the EURCHF pair.
2. CHF is usually a safe haven investment and trades tend to buy it as a reserve since it tends to be strong during volatile times. SNB is actively discourage investors from buying and have spent billions to keep the price of the currency lower.
3. The SNB is trying to main sell the CHF against strong yield currency pairs in order to help keep the price now.

Key Indicators To Watch:
Exchange rate of EURCHF(1.200 bottom)
Fundamental Data

Last Weeks Fundamental Releases
Trade Balance - Actual: 1.39B Forecast: 2.56B Previous: 3.90B

1. Although the trade balance is still positive(bullish) it is significantly decreasing which is giving power to the sellers and could be signalling a change in trade balance.
2. Decreased back near yearly lows set in Jul at 1.38B

PPI - Actual -0.2% Forecast: 0.2% Previous: 0.0%

1. Producer inflation is decreasing and has been low/decreasing all year
2. Signaling weak inflation/deflation.
3. Weakening Currency.

Libor Rate - Actual: <0.25% Forecast: <0.25% Previous: <0.25%
SNB Monetary policy Assessment

1. Maintaining 1.20 Bottom on EURCHF.
2. Expect inflation to be contained for rest of the year and expect slight increase in the beginning of 2015 and then it is expected to slump from mid 2015 to 2016.
3. Overall SNB said they expect to see the CHF weaken over the forecasted period(Now - 2016)

Weekly Fundamental Summary
With the SNB enforcing EURCHF 1.200 floor and their overall outlook being bearish, combined with the decreasing inflation and trade balance it is very obvious that this currency is a sell, especially against stronger currencies.

Overall Summary
Since the CHF is a safe haven currency the SNB rarely ever change rates so it is likely they will be continue to try and keep the CHF down for the foreseeable future. the EURCHF literally can not go any lower than 1.20 so anything near this low is a good time to buy. Only thing really keeping the EURCHF from taking off in my opinion is the strength of EU. With the fundamentals getting worse and SNB continueing to be bearish this currency is definitely a sell.

NZD(Bullish)
Central Bank Rate: 3.50%

RBNZ Summary

1. RBNZ have hiked rates 4 times in 2014 and are now taking a break.
2. They have made it very clear they will not tolerate a higher NZD and will intervene if required to lower it.
3. NZD has one of the best yields so people are looking to carry trade this, esepcially against low interest currencies (Euro)
4. RBNZD has said that they will introduce more rate hikes coming 2015.

Key Indicators To Watch:
Inflation(target 2-3%)
Exchange Rate(Will not let it breach .900 levels)
Diary Prices(GDT Price Index)

Last Weeks Fundamental Releases
GDT Price Index - Actual: 0.0% Previous: -6.0%

1. Indicator measures price of dairy products sold at auctions.
2. Dairy has been expensive in NZD nearly all year with the GDT being negative.
3. Only times this year has it been above or at 0.0%.
4. This does not mean prices will continue to lower but it could be signaling that which overall is good for the currency

Current Account - Actual: -1.07B Forecast: -1.04B Previous: 1.47B

1. Current Account decreased from being positive back to being negative from June.
2. Although this is a decrease for this quater it appears to just be a dip in the overall trend as when this year began their was a -4.78B deficit.
3. This quaters deficit was likely due to the low cost of dairy products.
4. As dairy products demand increases it will greatly help the increase of their current accounts.
5. Overall these numbers are still good in my opinion.

GPD q/q - Actual: 0.7% Forecast: 0.6% Previous: 1.0%

1. GPD has continued to grow quarter after to quarter since mar 2011.
2. Since GPD beat forecasted growth I expect NZD to be very strong this quarter.
3. Increase is said to be caused by services industry which makes of to ⅔ of the economy and all 11 service industries increased this last quarter.
4. Highest annual growth since september.

Weekly Fundamental Summary
Overall the NZD is growing and it appears that bulls are in the house. GPD has done nothing but to continue to increase and although the current account was a deficit this quarter, the trend is still up for the year and this dip seems to be caused by the price of dairy products. As the GDT price index increases so should the current account and the currency in general.

Overall Summary
Against the Dollar this thing is capped at .900 for sure. Against other low yielding currencies this thing could real run them up or down. The rates are likely to stay high and only get higher with time which will cause more investors into the carry trade. Will not likely see a rally against the USD until rates are hiked.
As fundamentals continue to improve so should the strength of this currency.

JPY(BEARISH)
Central Bank Rate: <0.10%

BOJ Summary

1. BOJ are in the middle of an easing program in order to teach their inflation target of 2%(this seems to be the sweet spot)
2. BOJ is currently happy with results but some thing more easing is to come in order to reach the 2% inflation target.
3. BOJ is looking for USDJPY to teach highs between 105. and 110. to help in their recovery,
4. Nikkei is still trading strong.(weak for currency)

Key indicators To Watch:
Inflation (target 2%)
Nikkei 225

Last Weeks Fundamental Releases
BOJ Gov Kuroda Speaka

1. BOJ’s Kuroda says Japanese economy on course to reach 2% inflation target.

1. BOJ has positive outlook for currency.

Trade Balance - Actual: 0.92T Forecast: -0.99T Previous: 1.02T

1. Although it beat forecasts the trade balance is still a deficit which will weaken currency.
2. Trade deficit has been bouncing around -1.82T to -0.84T all year and is currently at the lower end of the band.
3. Until Trade balance sets no deficit high I won’t really consider these numbers too good.

Weekly Fundamental Summary
BOJ has bullish outlook on inflation which should strengthen currency. Trade balance is still a deficit but it is getting better it appears short term. Again until the deficit reaches new lows I won't expect it to have much of an effect on the currency. nikkei 225 also increased last week which will negatively affect the currency

Summary
As of now every looks to be the same fundamentally for the JPY. they still looking for 2% inflation but not sure on how to get there yet. The Nikkei has been holding its highs lately which will further weaken the currency also and if the US recovery keeps up this could also push the USDJPY higher with a top around 110.00 or so.

USD(BULLISH)
Central Bank Rate: <0.25%

FED Summary

1. Fed is expected to end QE by October.
2. Once QE is done inflation and employment will be key factors driving rate decisions.
3. Recent data has been very good as US has been in moderate recovery.
4. S&P continues to push highs(weak for currency)

Key Indicators To Watch:
Inflation(Target 2%)
Employment Figures.
S&P 500

Last Week Fundamental Releases
PPI m/m - Actual: 0.0% Forecast: 0.1% Previous: 0.1%

1. Producer inflation has been increasing basically every month this year which is good for currency.
2. Although numbers were a miss they were not negative. so the PPI did not decrease this month, it just stayed the same.

CPI m/m - Actual: -0.2% Forecast: 0.1% Previous: 0.1%

1. CPI Decreased this month meaning consumer inflation decreased which is bad for currency.
2. Although the numbers were a miss, the CPI has continued to increase every month this year so this is only seen as a slight dip to the overall trend which is up.
3. Overall CPI m/m is still strong in my opinion.

Core CPI m/m - Actual: 0.0% Forecast: 0.2% Previous: 0.1%

1. Just like with the PPI the Core CPI m/m missed forecast this month but it did not decrease, it just remained the same.
2. Core CPI m/m has done nothing as increase so this miss is only seen as a breather.
3. Overall the Core CPI m/m trend is up which is good for currency.

Current Account - Actual: -99B Forecast: -114B Previous: -102B

1. Current Account has been bouncing around this year from -81B to -111B.
2. This beat in forecast leads me to believe their will be stronger bullish sentiment for this quarter as current account deficit appears to be getting smaller.

Federal Fund Rate/Meetings - Actual: <0.25% Forecast: <0.25% Previous: <0.25%

1. 15 out fo 17 Fed members expect rate hike in 2015.
2. Janet has made it very clear that rate hike will depending on economic data.
3. Feds have downgraded economic growth for 2015 from 3.0% to 2.6%(still positive so just a slight decrease to overall bull strength)

FOMC Press Conference

1. Overall bias on USD is stronger than expected as Fed thinks they will maybe need to raise rates sooner than expected.

Unemployment Claims - Actual: 280K Forecast: 312K Previous: 316K

1. Unemployment claims beat expectations by coming in lower
2. They also decreased from last months claims meaning more people are claiming to be employed.
3. This year the claims have been bouncing around 350K-300K
4. This is lowest claims have been all year which is good for the currency.

Fed Chair Yellen Speaks

1. Yellen gave a speech about this importance of asset building for people of all economic class.
2. Overall this is not too important at all.

Weekly Fundamental Summary
We had a lot of releases this week. PPI and CPI growths have been up all year which is good for the currency have only seem to have taken a breather from this overall uptrend this month. Unemployment claims were the lowest they have ever been this year which should also strengthen the USD. Current Account Deficit appears to be getting smaller and is approaching the lower end of its band which is good for the currency. On top of the FOMC all are very bullish on the dollar and rate hikes which is very good for currency.


Overall Summary Summary
Fed has been pleased with economic recovery so far. NFP has been good lately and inflation has been alright, it is still a little low. In their last statement they made it clear they won't hike rates until reviewing employment and inflation data so these are very big ones to focus on. I will be trying to trade the data points looking for them to continue to be strong especially against lower yield currencies(EUR/CHF/JPY).

US data continues to improve last week and FED outlooks appears to be more bullish expecting to maybe have to hike rates sooner than expected. This is making the USD a clear buy especially against weaker currencies.

CAD(Bullish)
Central Bank Rate: 1.00%

BOC Summary

1. BOC has previously been dovish but lately they have began sounding more neutral.
2. Inflation data has been improving which has caused a sell off in the USDCAD from its fair price down to yearly lows but it has since returned back to its fair price.
3. BOC dismissed improvement in recent statements and claimed that figures will start to become more bearish from here prompting weakness in the CAD.
4. Markets will now watch employment figures closely as BOC mentioned these were big part in keep economy down. we need to see these improve before CAD will.

Key Indicators To Watch
CPI Inflation(Target 1-3%)
Fundamental Data

Last Week Fundamental Releases
Manufacturing Sales m/m - Actual: 2.5% Forecast: 1.1% Previous: 0.9%

1. Manufacturing Sales have continued to increase basically every month this year and just printed out its largest gain this month
2. This is strengthening the currency by quite a bit.

BOC Gov Poloz Speaks

1. Reiterates they are aiming to keep inflation at 2%, mid point of their 1-3% target.
2. They want to keep inflation low(basically currency down) but BOC says they will not try to do anything to step in as this could cause the market more harm than good.
3. Overall he saying to focus on the Data to understand where the cad is going.

Core CPI m/m - Actual: 0.5% Forecast: 0.2% Previous: -0.1%

1. Core CPI crushed forecast and previous months numbers showing inflation(which is good for currency)
2. Core CPI has continued to increase almost every month this year so this huge increase should greatly strengthen CAD

Wholesale Sales m/m - Actual: -0.3% Forecast: 0.8% Previous 0.8%

1. Overall wholesale sales have increased every month this year except for 3(including this month). This shows that the trend is up/growing.
2. This miss being the 3rd time it has decreased this year I am not too worried and look at it as a breather or a slight dip in the overall bullish trend.

CPI m/m - Actual: 0.0% Forecast: -0.1% Previous: -0.2%

1. CPI numbers were better than expected this month. That being said the CPI did not increase.
2. CPI has increased every month except for 2 this year so the overall trend is up.
3. Even though CPI did not increase this month it is still very bullish as it appears to just be taking a breather.

Weekly Fundamental Summary
All of the fundamental data coming from CAD this week was bullish and I expect it to be bullish. BOC is being more neutral than anything saying they want to maintain a low inflation rate of the CAD but will not necessarily step in to do so and instead will let the Data run its course. That being said as long as CAD data continues to be strong I expect it to continue to be strong as well.


Overall Summary
Overall the data coming from the country is mixed since the inflation numbers are good but BOC is focusing on employment numbers being bad. With the BOC saying they won't necessarily step in to keep the CAD lower it will likely increase as long as the data continues to be good.


"Yeah Science!"

Now that I know where each currency is fundamentally I will know which pairs are EZ money shorts and Longs and which pairs should expect to range because both currencies are either strong or weak.

Now it all depends on entry method. This is where people can be creative as there are 1000 ways to skin a cat. i personally like to use pending orders with 1hour & 4 hour supply and demand levels. This way there is less stress. i just set my order and walk away.

Please feel free to comment/discuss the currencies fundamentals as there is always something new to be learned!

Very useful mate, subscribe .

Been a tough start to the week. Was trading on 1 hour charts Monday and Tuesday and was getting chopped up quite a bit. moved back out to 4 hour and started to come back. Finally snagged some nice entries that should pay nice till Friday at least. All trades are backed by fundamental analysis posted Sunday. the trick is to finding technical that work for you so you can time your entries. I fine 4 hour time frame is nice. As i said i was playing with one hour TF earlier in the week and it was not working well, moved to 4 hour and got the entries i was looking for.

these trades are done on a live account with a starting balance of $550.00 USD.

Great work H. However Cad is very much linked to commodities and crude is falling......so bullishi don't think so.

ty for your input kraven. i need to pay closer attention to the indexes that are correlated with each currency. i still am not 100% sure on all of them. And when I mean bullish I just mean against other weaker currencies. i wouldnt go buying cad vs GBP or USD by any means. i am short AUDCAD which can be a bit risky but for EURCAD short and CADJPY and CHFJPY longs i think the fundamentals are on my side.

Please share any other inputs you may have. I would like for this to have more people putting in their input on here but i dont think too many people are interested haha

Not sure happened but my NZD trades just all got stopped (NZDJPY long and AUDNZD short)

ahh i see why

http://www.rbnz.govt.nz/news/2014/5881817.html

NZD is now a prime short against the stronger currencies

GBPAUD is looking pretty good for a long here. expect NZD to pull down AUD across the board with it as it sells off.

Positions are still doing good for the most part. Closed some more ECAD and CADCHF. EURJPY unfortunately hit stop, still searching for bottom. GBPAUD looking good, once it breaks out it will be nice.

closed some more ECAD short and CADCHF long. Have a tiny position in each till and will re enter if/when they are looking to make another leg up.

opened another positions in EJ after last one got stopped out and also a small position in CHFJPY as well as i am anticipating they have found their bottoms. we will see if bulls can rally.

Both trades are on the basis on JPY weakenss. Both EUR and CHF are weak in my opinion but they are both stronger than JPY in my eyes.

i tend to find economic fundamentals need to mount in severity, one rarely seems enough to make a huge change. also apply it to a change in the medium term trend and trade breakouts in trend direction. This is my journal, http://www.forexfactory.com/showthre...01#post7748301

Take the resent scotish referendum, many so called experts said if it went to the 'yes' vote the GBP could drop 4-7% and the 'No' could see it steadily rise 2%....what actually happen was a surge in Asia and when London opened it pulled back to where it had started.

​Instead of pairing so many up and trying to diversify so much why not just bet on what you see are the strongest 2/3 and the 2/3 weakest

So buy UJ and GJ and GChf
Sell EU and EG and NU

enter at breakouts and look for fake outs. good luck

I tend to agree that usually the fundamentals dont ever do to price what the "experts say" but i dont ever listen to analyst, most articles that do quote what CB's said or provide the actual data should be taken as what CNBC is, entertainment. i just look at the data and listen to the CB's. They know what is really going on in the market.

And I usually only like to trade the pairs that match my fundamentals. like if I see CHF & JPY weak and GBP Strong i watch GBPCHF & GBPJPY for longs and so on.

CHFJPY and EURJPY look like they may have found some bottoms, GBPJPY also looking ready to gear up for a move north. currently have a little bit of all 3. GBPAUD trade is working nicely, currently up 100 pips and AUDCAD short is working like a charm aswell. Off to bed now.

Ended the week just under break even by .5%. Was a tougher week than it should have been and that is my fault because I was tinkering with technical entries the first 2 days of the week and it gave me some draw down. Thankfully I was able to make it back.


Here are all of my trades for this week. Looking for to next week.





Still holding a couple trades. My CAD longs are doing good, they both look ready to make another leg in my favor. EURJPY and CHFJPY looked like they found there bottom but now they are not sure and are drawing me down a bit. GBPJPY as well.



for any one wondering why I dont use Trade Explorer its because as of now Trade Explorer can only display the current months stats with FXCM accounts. once it is able to provide my full account history I will connect to TE

Time to start preparing for next week. Will have fundamental outlook done hopefully tomorrow night but definitely before the market opens.

Weekly Fundamental Outlook(Week 2)

EUR(Bearish)
Central Bank Rate: 0.05%

ECB Summary

1. The ECB is mainly focused on inflation rates because it is below their 2% mark. the main way a central bank increases inflation is by cutting interest rates. ECB have cut interest rates again for the second time this year.
2. A Strong Euro, stagnant growth and the missed inflation has caused the EU economy to struggle in its recovery and it is now obvious that they are lagging behind the rest of the world in this manner with negative interest rates.
3. ECB is focused on increasing inflation and growing the economy. That being said there outlook is still bearish at the moment.

Key Indicators To Watch:
Inflation(Target 2%)

Last Weeks Fundamental Releases
ECB President Draghi Speech

1. Draghi said “The economic recovery in the euro area is losing momentum.” and “The early information on economic conditions which we received over the summer has been somewhat weaker than expected.” He also said recent indicators have given no hint of this decline stopping.
2. He also states, “unacceptably high unemployment and continued weak credit growth are likely to curb the strength of the recovery.” This is a heads up to watch these two indicators as when they start to improve so will EUR, and if they continue to fall EUR will aswell.
3. Also noted persistently weak inflation and slow growth. Another big one to be watching.
4. Says they are using the TLTRO’s as a channel to hopefully get the economy growing and inflation rising.
5. Ends by saying they will use unconventional policies if needed to help the crisis but the only thing that will really improve it is economic growth and confidence.

French Flash Manufacturing PMI - Actual: 48.8 Forecast: 47.1 Previous 46.9

1. Anything under 50 indicates industry contraction so even though the numbers beat forecast they are still bad.
2. Numbers have been under 50 nearly every month this year besides April and March
3. Industry is continue its trend of contraction which is bearish for the EUR.

French Flash Services PMI - Actual: 49.4 Forecast: 50.2 Previous: 50.3

1. Missed expectations and came in under 50 showing industry contraction.
2. For the year Flash Service PMI has been bouncing back and forth above and below 50.
3. 5/9 months this year they have shown contraction.
4. Basically industry is stagnant which is also bearish.

German Flash Manufacturing PMI - Actual: 50.3 Forecast: 51.3 Previous: 51.4

1. Although the numbers missed they still did not show contraction.
2. That being said this indicator has done nothing but decrease from January this print being its lowest of the year.
3. This shows german manufacturing has been contracting all year and is bearish for the EUR

German Flash Services PMI - Actual: 55.4 Forecast: 54.6 Previous: 54.9

1. Numbers beat expectations this time which is good showing service industry expansion.
2. Unlike the manufacturing PMI the service industry has actually been expanding slowly since january.
3. That being said this is not enough to really give the EUR strength. I would like to see both industry PMI with the same trend. When they are mixed like this it leads to beleive overall economy is stagnant.

Flash Manufacturing PMI - Actual: 50.5 Forecast: 50.6 Previous 50.7

1. Euro Flash Manufacturing PMI has been contracting since january as well and printed its lowest numbers this month.
2. Shows industry is contracting and growth is slowing down overall in europe. this is very bearish.

Flash Services PMI - Actual: 52.8 Forecast: 53.2 Previous: 53.1

1. Like in germany and france overall in Europe the service industry has been expanding since january.
2. but just like I stated above as long as manufacturing and service PMI’s are conflicting it leads me to beleive economy is stagnant or neutral overall.

German Ifo Business Climate - Actual: 106.3 Forecast: 105.9 Previous: 106.3

1. Missed forecast for the 5 month in a row now. Very bearish.
2. This shows that business sentiment has began decreasing since may and doesn't look like it will stop soon.
3. This is bearish for EUR as draghi said the economy is what will raise the EUR and if business sentiment turning south the economy will likely follow.

ECB President Draghi Speech

1. Press conference about lithuania joining eurozone
2. Summary: The euro area benefits from Lithuania’s accession in at least two ways: first, Lithuania has shown that adjustment is not only necessary, but also possible – even without currency devaluation; second, Lithuania’s decision to join the euro area demonstrates that our common currency is attractive.
3. Ended with “The way in which Lithuania has striven to become part of the euro area shows that our common currency is attractive – despite the difficulties experienced in some member countries. But joining the euro area does not only follow from economic considerations: it is a binding commitment to European values. I am happy to see that Lithuania is ready to make this commitment – welcome Lithuania!”
4. Overall I am not looking into this as really effecting the price of the EUR too much.

News To Watch For Next Week

German Prelim CPI m/m(Monday All Day)
Spanish Flash CPI y/y(Monday 1:00 AM)
German Retail Sales m/m(Tuesday 12:00AM)
German Unemployment Change(Tuesday 1:55AM)
Italian Monthly Unemployment Rate(Tuesday 2:00AM)
CPI Flash Estimate y/y(Tuesday 3:00AM)
Core CPI Flash Estimate y/y(Tuesday 3:00AM)
Unemployment Rate(Tuesday 3:00AM)
Italian Prelim CPI m/m(Tuesday 3:00AM)
Spanish Manufacturing PMI(Wednesday 1:15AM)
Italian Manufacturing PMI(Wednesday 1:45AM)
Final Manufacturing PMI(Wednesday 2:00AM
Spanish Unemployment Change(Thursday 1:00AM)
PPI m/m(Thursday 3:00AM)
Minimum Bid Rate(Thursday 5:45 AM)
Spanish Services PMI(Friday 1:15AM)
Italian Services PMI(Friday 1:45AM)
Final Services PMI(Friday 2:00AM)
Retail Sales m/m(Friday 3:00AM)

Weekly Fundamental Summary
With all of the PMI trends either being down or stagnant and the numbers continuing in that direction last week the EUR should continue to weaken. On top of that Draghi’s speech had a very bearish tone to it in my opinion which will likely weaken the euro quite a bit as well.

Overall Summary
Central Bank is still trying to get the economy to improve by trying to get money back into the economy via deposit rates and TLTRO’s. Recovery is not doing as well as they would like and they continue to have a bearish outlook on the whole thing. After last weeks news events I wont be surprised to see the EUR’s down trend continue right on track. This should be an easy sell this week against stronger currencies.

GBP(Bullish)
Central Bank Rate: 0.50%

BOE Summary

1. BOE have began to put out a positive sentiment in the market.
2. BOE is looking to “normalize” interest rates in the coming months.

Key Indicators To Watch:
Inflation (Target 2%)
Employment Data

Last Weeks Fundamental Releases
BOE Gov Carney Speaks

1. Overall there were no major GBP releases this week except carneys speech.
2. States “the economic outlook is much improved. The UK has experienced the strongest growth in the G7 over the past year.” Always good to have CB giving positive outlook. this will strengthen GBP.
3. Also stated, “The point at which interest rates also begin to normalise is getting closer. In recent months the judgement about precisely when to raise Bank Rate has become more balanced.” This could be hints that rate hike might come sooner than expected.
4. Talked about ideas on how to “reform” the role of insurance in the financial system.
5. Also States, “These ideas – tailored capital standards that promote a level playing field; a framework to hold the right people to account; and global standards for globally systemic insurers – are needed now in practice.
6. Overall this speech left sort of a bullish taste in my mouth so I think it will add some positive sentiment to the Pound.

News To Watch For Next Week

Current Account(Tuesday 2:30AM)
Final GDP q/q(Tuesday 2:30AM)
MPC Member Miles Speaks(Tuesday 11:30AM)
Manufacturing PMI(Wednesday 2:30AM)
MPC Member Forbes Speaks(Wednesday 11:30AM)
Construction PMI(Thursday 2:30AM)
Services PMI(Friday 2:30AM)


Weekly Fundamental Summary
There was no new news really for the cable last week except for a speech by BOE Gov Carney. The main point of the speech was to bring up 3 “ideas” on how to reform the role of insurance in the financial system. Before he got into these 3 ideas though he did make some statements about UK that seem bullish in my opinion.

Overall Summary
Central Bank is now starting to acknowledge the economy is actually doing really well and has the strongest growth in the G7 over the last year. On top of the scottish vote being no the Pound should really start to strengthen up.

AUD(BEARISH)
Central Bank Rate: 2.50%

 

1. RBA began talking down the AUD stating their could be a big fall and the market is not prepared.
2. With Inflation now at 2.9% the RBA need to either try to lower this with rate hikes(good for currency) or by spurring economic growth away from mining(Gold & Silver Holding it Down)
3. RBA is continuing to put negative sentiment into the market by mentioning areas of concern for the economy.

Key Indicators To Watch:
Australian Inflation(Target 2-3%)
RBA Comments & Speeches(Looking for Less Neutral Comments)
Commodity Prices

Last Weeks Fundamental Releases
RBA Gov Stevens Speaks

1. Stevens gave a speech stating an “area of concern” for the economy. This is basically him putting out bearish sentiment.
2. He says one area of concern is investor housing finance growth. He also said he was open to using macroprudential tools – and that’s the kind of thing we have in mind right now
3. Overall not much is said in this speech but it is bearish because he voicing concerns about outlook and putting negative sentiment in the market.

News To Watch For Next Week

Retail Sales m/m(Tuesday 7:30PM)
Commodity Prices y/y(Wednesday 12:30AM)
Trade Balance(Wednesday 7:30PM)
Building Approvals m/m(Wednesday 7:30PM)
AIG Services Index(Thursday 5:30pm)
HSBC Final Manufacturing PMI(CNY)(Monday 7:45PM)
Manufacturing PMI(CNY)(Tuesday 7:00PM)
Non-Manufacturing PMI(CNY)(Thursday 7:00PM)

Weekly Fundamental Summary
There wasn’t really any news except for a speech given by Stevens. In this speech he voiced his area of concern for the economy putting a bearish sentiment in the market. Overall I see this weakening the currency until they begin to get more a positive outlook.

Overall Summary
As stated above they need to battle their current inflation by either hiking rates or increasing economic growth in non mining business and after this latest meeting it appears that they are going to take the economic growth route and leaves rates the same for the conceivable future. They are continueing to have a negative sentiment out look on the market so overall the currency has began to sell off.

CHF(BEARISH)
Central Bank Rate: <0.25%


SNB Summary

1. SNB has continued to enforce the 1.20 floor they put on the EURCHF pair.
2. CHF is usually a safe haven investment and trades tend to buy it as a reserve since it tends to be strong during volatile times. SNB is actively discourage investors from buying and have spent billions to keep the price of the currency lower.
3. The SNB is trying to mainly sell the CHF against strong yield currency pairs in order to help keep the price now.

Key Indicators To Watch:
Exchange rate of EURCHF(1.200 bottom)
Fundamental Data

Last Weeks Fundamental Releases

1. No real news this week. Keep outlook from last week that overall this currency is bearish

News To Watch For Next Week

KOF Economic Barometer(Tuesday 1:00AM)
SVME PMI(Wednesday 1:30AM)

Weekly Fundamental Summary
There was no real news this week in the CHF. 1.200 floor on EURCHF is still in play.

Overall Summary
Since the CHF is a safe haven currency the SNB rarely ever change rates so it is likely they will be continue to try and keep the CHF down for the foreseeable future. the EURCHF literally can not go any lower than 1.20 so anything near this low is a good time to buy. Only thing really keeping the EURCHF from taking off in my opinion is the strength of EU. With the fundamentals getting worse and SNB continueing to be bearish this currency is definitely a sell.

NZD(BEARISH)
Central Bank Rate: 3.50%

RBNZ Summary

1. RBNZ have hiked rates 4 times in 2014 and are now taking a break.
2. RBNZ have become extremely Bearish on the pair coming out with a statement last week on why the exchange is unjustified.
3. They have made it very clear they will not tolerate a higher NZD and will intervene if required to lower it.
4. Until the RBNZ has a more positive outlook on the exchange this is a definite short.

Key Indicators To Watch:
Inflation(target 2-3%)
Exchange Rate(Will not let it breach .900 levels)
Diary Prices(GDT Price Index)

Last Weeks Fundamental Releases
Why The NZ Exchange rate is unjustified.

1. Now this was not schedule on the calendar but the Bank did release a statement that has caused the Kiwi to become very bearish.
2. Stated, “when assessing the implications of current strength or weakness in the New Zealand dollar, the Bank focuses on two broad concepts – whether the exchange rate is unjustified, and whether it is unsustainable.”
3. Says exchange rate is overvalued because it is not matching up to what fundamental factors that are tied to it.
4. He stated, ““The real exchange rate has not adjusted materially to the recent downward movement in commodity prices. For example, global dairy prices have fallen by 45 percent since February 2014. Despite this, in August, New Zealand’s real effective exchange rate was 1 percent higher than its February 2014 level.”
5. Basically saying there is no reason the Kiwi should have raised at all and instead should have been dropping significantly.
6. With Central Bank coming out like this saying the exchange rate is unjustified it has caused the NZD to become extremely bearish until the Central bank says otherwise and is going to be an easy sell against stronger currencies.

News To Watch For Next Week

ANZ Business Confidence(Monday 6:00PM)
GDT Price Index(Wednesday Tentative)
ANZ Commodity Prices m/m(Wednesday 6:00PM)


Weekly Fundamental Summary
This week the RBNZ came out saying why the exchange rate is unjustified. They mentioned how dairy prices have fallen 45 percent since February and the Kiwi has not followed at all like it should have. This has caused the kiwi to begin selling off very aggressively.

Overall Summary
Against the Dollar this thing is capped at .900 for sure. As long as RBNZ thinks the exchange is unjustified this thing will only go down. So until the RBNZ comes out saying they are seeing the exchange rate being justified and then as fundamentals improve it will become bullish again but until that point this is a definite sell.

JPY(BEARISH)
Central Bank Rate: <0.10%

BOJ Summary

1. BOJ are in the middle of an easing program in order to teach their inflation target of 2%(this seems to be the sweet spot)
2. BOJ is currently happy with results but something more easing is to come in order to reach the 2% inflation target.
3. BOJ is looking for USDJPY to teach highs between 105. and 110. to help in their recovery.

Key indicators To Watch:
Inflation (target 2%)
Nikkei 225

Last Weeks Fundamental Releases
Tokyo Core CPI y/y - Actual: 2.6% Forecast: 2.7% Previous: 2.7%

1. CPI was very low during the first part of the year but then say a significant increase in April and it has yet to contract below that mark since then until now with these numbers being a miss.
2. This could be a sign that the CPI is heading back down to where it was in january. That being said this wont be confirmed until the next couple of months CPI’s come out.
3. Overall shows CPI growth slowing down the past 2 months.
4. Could also be signaling Inflation could be slowing as well.
5. Overall this is good for the JPY as it they are slowing down inflation to try and reach that 2% mark.

National Core CPI y/y - Actual: 3.1% Forecast: 3.2% Previous: 3.3%

1. Just like the tokyo CPI the national Core CPI was stagnant at the beginning of the year and then it jumped up to 3.2% all the way to 3.4% and then fell back to 3.3% holding above 3.2% until now.
2. With the national core CPI decreasing as well this could be showing that inflation is starting to slow or become stagnant.
3. Just as stated above this could be signs of inflation slowing bringing BOJ closer to 2% mark.

News To Watch For Next Week

Unemployment Rate(Monday 5:30PM)
Retail Sales y/y(Monday 5:50PM)
Final Manufacturing PMI(Tuesday 7:35PM)
Monetary Base y/y(Wednesday 5:50PM)

Weekly Fundamental Summary
CPI’s were increasingly strong the 2nd quarter of the year but both are looking as if they are beginning to slide. Now this downturn is not confirmed yet and I don't think it will be until we get more data. That being said this has added a little bit of bull strength to the currency as it could be a sign of inflation slowing getting the BOJ closer to 2% market.

Summary
BOJ is still looking for 2% inflation but not sure on how to get there yet. CPI’s appear to be beginning to slide showing that inflation could be slowing down. which will bring them closer to their target. That being said I am still bearish the JPY against stronger currencies until the get much closer to that 2% mark.

USD(BULLISH)
Central Bank Rate: <0.25%

 

1. Fed is expected to end QE by October.
2. Once QE is done inflation and employment will be key factors driving rate decisions.
3. Recent data has been very good as US has been in moderate recovery.
4. Fed has been saying they would like to raise interest rates if the data permits.

Key Indicators To Watch:
Inflation(Target 2%)
Employment Figures.


Last Week Fundamental Releases
FOMC Member Dudley Speaks

1. Stated, “he would like to see the Fed move off the zero lower bound of interest rates as soon as appropriate” but just like yellen he said this will be determined by the progress of the economy.
2. Restated that they are trying to target 2% inflation rate for economic stability and are currency short of this goal.
3. Again stated that he would like to raise interest rates but won't do it on a dime.
4. Mentioned recent dot plot chart and says that it should not be “over weighted”
5. Also mentioned that since 2008 crisis fed is now trying to spot out and fix bubbles ahead of time and use the tools it has to combat these asset bubbles.
6. Said if dollar continues to appreciate a lot it would dampen inflation and exports which would make it harder for fed to achieve its goals.
7. Overall i think this speech had more of a bullish sentiment to it because he kept mentioning how they would like to raise interest rates etc. That being said as dollar continues to rise I would be on close look out for signs of it becoming over extended.

Unemployment Claims - Actual: 293K Forecast: 294K Previous: 281K

1. Although these numbers were higher than last times, overall the trend for the year as shown these claims decreasing so this is seen just a retrace or breathe in the trend.
2. Overall I still think these numbers are bullish in general and for the year the trend has been unemployment claims decreasing.

Final GDP q/q - Actual: 4.6% Forecast: 4.6% Previous: 4.2%

1. Numbers are higher than previous quarters including last showing the GPD increasing.
2. This means the country is producing more and growing.
3. Overall this is seen as bullish for the dollar as it shows economy is growing.

Revised UoM Consumer Sentiment - Actual: 84.6 Forecast: 85.1 Previous 82.6

1. Consumer Sentiment higher than its ever been as positive outlook on economy increases.
2. This could be signaling growth in consumer price index which shows growth in inflation which overall is bullish for the dollar as this is what the FED was saying they wanted to see in order to hike rates.

News To Watch For Next Week

Chicago PMI(Tuesday 7:45AM)
CB Consumer Confidence(Tuesday 8:00AM)
ADP Non-Farm Employment Change(Wednesday 6:15AM)
Final Manufacturing PMI(Wednesday 7:45AM)
ISM Manufacturing PMI(Wednesday 8:00AM)
Unemployment Claims(Thursday 6:30AM)
Non-Farm Employment Change(Friday 6:30AM)
Trade Balance(Friday 6:30AM)
Unemployment Rate(Friday 6:30AM)
ISM Non-Manufacturing PMI(Friday 8:00AM)

Weekly Fundamental Summary
The GPD is growing, Unemployment still appears to be in its downtrend and Michigan consumer sentiment is higher than its been all year. On top of Dudley restating how the FED would like to raise interest rates sooner than expected if the data continues to be good I think the Dollar will strengthen due to all this positive sentiment being put out into the market.

Overall Summary Summary
Fed has been pleased with economic recovery so far. NFP has been good lately and inflation has been alright, it is still a little low. Fed is continueing to remind investors how they would like to hike rates if the data continues to improve and with the data improving and consumer sentiment improving along side the feds positive outlook, the dollar should begin to really strengthen especially against weaker currencies.

CAD(BEARISH)
Central Bank Rate: 1.00%

BOC Summary

1. BOC has previously been dovish but lately they have began sounding more neutral.
2. BOC dismissed improvement in recent statements and claimed that figures will start to become more bearish from here prompting weakness in the CAD.
3. Markets will now watch employment figures closely as BOC mentioned these were big part in keep economy down. we need to see these improve before CAD will.

Key Indicators To Watch
CPI Inflation(Target 1-3%)
Fundamental Data

Last Week Fundamental Releases
Core Retail Sales m/m - Actual: -0.6% Forecast: -0.1% Previous: 1.5%

1. Lowest Retail sales have printed since February.
2. Expectations were for it to be lower than lost month but I think with it being lower than expected could start to weigh down CAD a bit.
3. This shows the retail sector of economy is struggling to grow and may be contracting.
4. That being said I will not confirm complete bearish outlook on CAD until i see more numbers come out showing downside.
5. For now this is neutral/bearish for the CAD

News To Watch For Next Week

GDP m/m(Tuesday 6:30AM)
Trade Balance(Friday 6:30AM)


Weekly Fundamental Summary
There wasn’t much happening fundamentally this week for the CAD except that Core Retail sales m/m came out. These were lower than expected and the lowest they have printed since February. This could be signalling the economy is struggling to grow and could be contracting.

Overall Summary
As long as the COB continues to be dovish on the CAD and the fundamentals continue to weaken this currency will likely sell off against stronger currencies.

To Put it short, Buy Cables & Greenbacks & sell everything else.

Have a good rest of the weekend every one!

not much has happened monday. Closed EURCAD and CADCHF positions and got stopped out on a GBPCAD position as well. Holding GBPJPY GBPCHF EURJPY CHFJPY Long

today has been a little "faster" than yesterday. Managed to bag some nice pips on EURGBP and GBPCHF. Closed our GBPJPY for now as it is major stagnant. Currently holding a little GBPCAD long and am looking to long GBPAUD here in the next few hours.

Closed GBJCAD for about 15 pips or so, major peanuts since lot size was so small, was really expecting more volatility out of this one but looks like double top could be forming so i abandoned ship!


currently sitting in cash right now waiting for the market to set up to my liking. GBPNZD and GBPAUD and GBPJPY all looking to be setting up nicely.