(binned per thread starter's request) Beyond the Daily Chart -

Fundamental Driven Trade Opportunities Explained in Daily Candles

I did some searches on fundamental trading and carry trade on FF, and I did NOT find much. So I figured to put a new thread here for anyone who is also interested in above subject.

Pair(s) that has my attention would be listed below. Decision(s) is made mostly based on fundamental reasons and event.
Since its long term trading, I would probably update it once or twice a week with anything I found interesting.



Pool of Choice

1. USDJPY
2. AUDUSD
3. EURUSD
4. GBPNZD
5. GBPAUD
6. GBPJPY
7. GBPUSD

Please feel free to share your thoughts and any pair you are interested in. Any intelligent debate is welcomed as always.

Thread Disclaimer

1. The analysis is made in purpose of giving back to the FF FX community.
2. Please also note all analysis will be made in the future will be based on personal experience and interrupted market knowledge.
3. Any analysis is NOT made in purpose of my own gravitation or to proof that I am right, wrong, over any person, group or system.
4. Past history does NOT guarantee any future gain.
5. Any analysis is preferred to be used as your trading edge and reference ONLY to improve your probability, consistency and FX market fundamental reasoning.
6. Last but not least, trade at your own risk and GOOD LUCK!

_____________________
also on TradingView @FXSayWhat (https://www.tradingview.com/u/FXSayWhat/)

AUDUSD

12/17/14 Latest comment from USD Fed stated

1. that rate hike could come as early as April 2015
2. and a series of rate hikes will follow

12/7/14 Week AUD Steven stated

1. AUDUSD should be stay well under 0.800, 0.7000.

12/16/14 The latest AUD minutes also consistent with Steve and stated

1. AUD rate is currently above its fundamental value,
2. and a low AUD rate is good for the economy.

If the fundamental reasons above do not change , it is quite possible to see AUDUSD has room to have legs down below 0.800 while the bear trend is well sustained on 4h and daily chart.

Update on AUDUSD

AUDUSD decent to 0.8100 leave as USD GDP hit its highest point since Q1 2010 this morning.

In addition RBA shows frustration by the continuing strength of the AUD
http://www.bloomberg.com/news/2014-12-23/rba-frustrated-as-weaker-aussie-goal-thwarted-australia-credit.html

1. AUD is up 3.9% against the yen in 2014
2. Up 2.4% against the euro
3. An iron-ore glut has halved prices of this key export

AUDUSD downward pressure continues.

Update on USD/JPY

While Fed is heading into 2015 with the possibility of rate hike in early Q2 2015, I thought the 120.00 level was a too good of a deal to pass on. So I picked up two positions in this portfolio.
http://www.forexfactory.com/showthread.php?p=7959055#post7959055

12/23/14 Upon the GDP release this morning, UJ well pass beyond its 120.00 level.

However, as for the downside of USD economy, this morning also showed,

1. USD had both disappointing numbers BOTH new home sales and existing home sales.
2. Core Durable Good order has not increased for 5 months straight which would raise concerns for current and future growth.

AUDUSD Update

While holiday weekends are approaching, the 0.8100 support level surely is acting up on the 1hr chart.


Note the 0.8100 level was also the support level in 2010.


Thoughts:
0.8100 won't break easily given the fact there isn't much liquidation left for AUD and USD the next two weeks, unless there is massive profit taking kicks in during the Christmas and New Year (very low chance)

But two weeks are fairly long time, anything might happen, and world could end in a flash.

Merry Christmas and Happy New Year Everyone!

Attached Image (click to enlarge)

AUD/USD Update

Here is the latest prediction from GS on the Christmas day published on Forexcrunch.com
http://www.forexcrunch.com/5-factors-for-the-aud-collapse-whats-next-goldman-sachs/

GS points out the 5 key factors for AUD collapse in months to come.
GS: AUD/USD at 0.83 in 3 months, 0.81 in 6 month, and 0.79 in 12 months.


http://forexcrunch.wpengine.netdna-c...015-charts.png

1. The continued drop in commodity prices. Iron ore is now at USD68/tn, 50% lower than at the start of the year, with a 12% drop since the beginning of November.
2. Ongoing China growth concerns as the authorities continue to ease policy in order to achieve the 2014 growth target, indicating that underlying growth momentum remains fragile.
3. Dollar appreciation on a trade-weighted basis against the back drop of US economic outperformance and Fed rhetoric which points to rate hikes in mid-2015.
4. Weak Australian data which has prompted the market to discount at least one RBA cut over the next 12 months.
5. And more recently, the rise in risk aversion.

Many people may argue GS prediction isn't always on-point, but hey this is just a reference. I would agree with GS this time.

GBP/AUD Update
First day into 2015, price drops from 1.9100 to 1.9000 upon GBP Manufacturing PMI decline 2 months in a roll in London section.

No news on AUD till next week.

GBPAUD Update
GBPAUD heading down into its 1.89xx zone due to GBP weak data.
NY section too gave this pair additional liquidation to push the price down even further before London close for the week.

GBPAUD is slowing showing its hand of stepping into the bear territory.

This week is very news heavy on dollar plus two rate statements, USD and GBP.

My main concerns need to be answered this week:

1. What is the BOE gotta to say for GBP recent weakness? Any update on the rate hike?
2. Would Fed state dollar is raising too fast against all major currencies EUR, AUD and GBP?
3. Would wage finally show sign of increase?
4. Does business finally generate enough money to offer a better pay after months of increasing hiring?

This is no plans as far as the trading plan goes other than just listen to what the data and speech have to say.

GBPAUD Update
Quick Pre-FOMC Update

GBPAUD price has come down to its 1.8750 level from its 1.9200 level after two PMI weak numbers on top of the weak GDP number in December 2014.

The current price is at where its 38.2% is. This is also the 4H 200 SMA spot.

New risk within the Next 48 hours:

US

At GMT 1/7 7:00 AM

UK

At GMT 1/8 12:00 PM

I suspect price will not easily break loose from this level before the FOMC which is schedule in about 23 hours.

As far as i can tell, fundamental reason has not changed for this pair. I will continue hold my short, and the 1.8750 level is a good level to spot any sign of technically pullbacks.

GBPAUD Update - Pre NFP Update
I seemed to me the GBPAUD call (from the 1.9200) was made correctly.
GBPAUD drops a whopping 600 pips just within 8 days into the new year.

Initial Post with Fundamental and Technical Reasoning for the Fall.
12/28/14
http://www.forexfactory.com/showthread.php?p=7963913#post7963913
1/2/15
http://www.forexfactory.com/showthread.php?p=7970045#post7970045


The 38.2% Level
1/6/15 http://www.forexfactory.com/showthread.php?p=7975496#post7975496


The 500-Pip Mark
1/6/15 http://www.forexfactory.com/showthread.php?p=7975533#post7975533


Below the 4H 200 SMA
1/6/14 http://www.forexfactory.com/showthread.php?p=7976903#post7976903


At the 600-Pip Mark TODAY 1/8/15


Sure, I have been pocketing the profit along the way as well.


Not bad for 7 days at only 2% at risk.

Last night AUD posted a good housing number, and GBP remains weakened.
BOE has NOT confirmed or hinted any upcoming rate hike.
Bear is pretty much in full control right now.

If the NFP is NOT tomorrow, I would highly suspect the 1.8600 is very solid to stay before the week ends.

GBPAUD Update
Post NFP Update
After the NFP release, GBPAUD price has gone down another 130+ pips off its major support at 1.8600.
I have not spot any turnaround in either technical nor fundamental.
Moving my target down to the 1.8000 and stop right above the 1.8600.


Next week is a fairly flat on the news side for both AUD and GBP except Wednesday, and we should see how this pair play out.

GBPAUD Additional Note

12/28/14 Note
GBPAUD is currently at its 2014 major resistant. Given the fact UK economy growth slowed down in Q3 and expected further weakening, if price does come down from this level, it would be a good carry trade opportunity. It might be still too early to tell because both GBP and AUD are expected to be weakened.

1/10/15 Note
Rumors stated the BOE rate hike would be extended due to the latest round of very weak data. Don't forget tGBP posted a very weak Q3 GDP data in December, 2014 as well.

Last week didn't have much from BOE. Given the fact next week is fairly light on the news side, as far as I would say, I don't spot any meaningful potential turnaround in this pair next week.

USD Update
Fed Staffs Latest Comments & Post NFP Update

Below is a collection of the latest comments from the USD fed staffs including the former vice chairman Kohn on the rate hike soft zone.

1. 1/10/15 Lockhart
   -Sees hikes mid year or later
   -Calls the jobs report very healthy
   -Low wage growth suggests that job market slack remains
   -Prefers risk of being a little bit late on rates
   -The Fed needs to be prepared to respond promptly
   -Cannot tell when or how quick Fed will rise
   -FOMC should strive to look through transitory phenomenon
   -Consumer growth more solidly based
   -‘leaning toward’ higher-growth pickup in 2015
   -Sees inflation moving ‘tolerably close’ to 2% target

1. 1/10/15 Evans
   -In favor of being patient on raising US interest rates
   -Decline in wages is somewhat indicative of low inflation
   -Should not be raising rates before 2016, want to see more inflation progress toward 2%
   -Sustainable unemployment rate is 5.2%, or less
   -Doesn’t want US to be like Europe on inflation
   
   
2. 1/6/15 Former Fed vice-chair Kohn guesses FOMC to hike in June.

1. 1/5/15 Williams
   -Does not rule out tightening later in 2015
   -Fed to be data-dependent on pace after liftoff
   -Slack is disappearing from US economy
   -Divergent Fed, ECB, BOJ policies to cause turbulence
   -He’s not worried about disinflation
   -Expects tightening pace to be pretty gradual

So what's in common??
I guess it's safe to say that the rate hike would come in in Q3 and Q4 in 2015. A early rate hike would all depends on how the wage, inflation and oil price doing.

Although Dec posted a good job number, all the early gain was eaten away by the worse than expected wage number.
As I previously mentioned in the beginning of this week, wage increase would be one of the key factors to push through for a new high in dollar.
http://www.forexfactory.com/showthread.php?p=7972844#post7972844

Failing in wage increase not only proof the fact companies have still not make enough profit after massive hiring in 2014, but also help to boost the inflation above the 2% which would lead to a healthy rate hike.

In addition, As far as I can see, USD is taking a hit across the board after a weak than expected wage number.

Is the dollar bull strength starting to run out???

EUR Update
QE Update

2015 QE Summary
One immediate way that QE may aid the eurozone’s economic revival is by pushing the euro lower against other major currencies, or at least ensuring its depreciation since May isn’t reversed. That could help exporters and increase output, while it could also help raise inflation by making imported goods and services more expensive in euro terms.

1. ECB will by €60bn per month of assets from March 2015 to the end of September 2016, 1.2 Trillion total.
2. Will keep buying till inflation raises below, but close to 2%.
3. No Greek debt will be bought.
4. ECB will buy bonds even if they have a negative yield.
5. What's bought?
   The purchases of securities issued by euro area governments and agencies will be based on the Euro system NCBs’ shares in the ECB’s capital key.
6. As for the economy, the risks surrounding the economic outlook for the euro area remain on the downside, but should have diminished after today’s monetary policy decisions and the continued fall in oil prices over recent weeks.

Office ECB Conferences Note on 1/22/15

1. Purchases to compliment previous programs
2. ECB will by €60bn per month of assets until end of September 2016
3. Will buy government bonds in secondary market in March
4. Will buy until ECB sees sustained inflation im
5. Changes TLTRO pricing to equal MRO rate
6. Removes 10bp spread on TLTRO for future
7. Council regains control over program features
8. Agency debt will be subject to loss sharing
9. Will coordinate purchases and will implement program decentrally
10. Agency debt will be 12% of additional purchases
11. Rest of purchases won’t be risk shared, ECB will hold 8% of additional asset purchases
12. ECB decision reflects adverse developments
13. Potential for second round effects have increased
14. Market based inflation expectation measures worsened
15. Economic slack still sizable
16. Money and credit to remain subdued
17. Action needed to achieve inflation target
18. Action will underpin inflation expectations
19. Measures will ease policy stance further
20. Sees increasing differences in policy cycles globally
21. Decisions should help push inflation higher
22. Oil prices have strengthened economic potential
23. Downside risks should have diminished now
24. Inflation seen very low and negative in coming months and is unavoidable
25. Sees inflation gradually rising later in 2015 & 2016
26. Council will monitor price risks closely
27. Will watch impact of FX developments on prices
28. Decisive action needed from other policy areas
29. Calls for decisive productivity and labor market reforms
30. Fiscal policies should support economic recovery
31. Lending to companies remains weak

Given the fact Fed would possibly rate hikes starting in Q3, EU could be pushing towards its 2003 low at 1.0750 by the end of 2015.

After 25 points rate cute last week, RBA again stated,

1. AUD is still above fundamental value.
2. Low AUD would help balancing the economy.

On the other hand, US has

1. Better than expected NFP
2. Improved wage number.
3. Huge confident boost in rate hike in mid year or early.
4. Several Fed staffs also stated and confirmed the positive momentum in dollar.

Seeing AUDUSD open below its key level 0.7800 might take us to a start of the next leg down as 0.7700 would be the last bull deference.

AUDUSD Update
After the previous post on the AUDUSD
http://www.forexfactory.com/showthread.php?p=8054244#post8054244

AUDUSD is now making new lows as the week goes on.

GBPNZD Update

As GBP rate hike talk rumor continues, pennant is forming on the GBPNZD daily chart.
Interestingly, the target lands on the 38.2% on the monthly chart.

I am just putting this chart out there although I still feel the pennant could still need some time for a further development. I feel the take off still needs some fundamental support which I only see a consistency in the UK job sector.


UK's unemployment rate is currently at its lowest point since mid 2009, and wage is slowly picking up consistently for the past 5, 6 months or so. All other sectors are expected to get better as job becomes more and more stable.

As you may already notice this thread of mine has not been updated for over 4 months. The reason is I have retired from trading long terms ( beyond the daily chart) due to change of my trading schedule. I am more focus on short term trades now as I see short term offers me greater growth potential and suits me main setup better.

For those who enjoyed trading long term beyond daily chart, I would continue update this thread for any potential opportunity for the upcoming week. Any intelligent debt is welcomed.

AUDUSD Update
Turned out USD NFP was better than expected last Friday, and it seemed like chance raised Fed might gives a rate raise in October.This latest job release sent USDJPY off it's 125.00 level which was the highest in 12 years; on the other hand AUDUSD is now back at its feet, 0.7600.

Depends on how dollar does next week, 0.7600 would be the level to watch.

GBPNZD Update
After 8 weeks rally, GBPNZD finally went beyond its 2.1500 level after about 16 days battling the level.
Long term bull trend is well intact, so far there isn't any reverse signal completed yet.