China cuts bank reserve requirement to counter slowdown | Forex Factory

  • China cuts bank reserve requirement to counter slowdown

    From reuters.com

    China's central bank cut the reserve requirement ratio for all banks by 100 basis points on Sunday, the second reduction in two months, as it steps up measures to boost bank lending and combat slowing growth. The country's largest banks will now be required to withhold 18.5 percent of cash reserves from lending. The People's Bank of China previously lowered the reserve requirement ratio for all commercial banks by 50 basis points on Feb. 4, the first industry-wide cut since May 2012.

Comment Options
PA is King
Apr 19, 2015 8:15am
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Quoting iumoren
The worst "forecasts" I have ever heard these days!

Check your charts very well for AUD and NZD trends:
I won't tell you on which charts/pairs to focus attention; you try to do a nice job.
Is it as bad as your.7900 Aussie forecast this past Friday? ;-)
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PA is King
Apr 19, 2015 9:10am
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Quoting iumoren
I clearly stated that Friday's CAD and USD news will bring some trend corrections later in the day for Aussie, and this is what happened on the background of comparatively better CAD and USD news.

Overall bullish trend remains STRONG for AUDUSD and 0.79000+ target is a reality. But "gamblers" can bet for the reverse.
This is your exact words from Friday...

"Aussie eyes 0.79000 target and above later today.

Chances are very high"
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PA is King
Apr 19, 2015 9:16am
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Now don't get me wrong, I don't control the market or price...it may go up, it may go down. But you shouldn't throw stones in a glass house....calling others wrong when in fact you were wrong is inappropriate.

Happy Trading!
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PA is King
Apr 19, 2015 12:14pm
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Quoting iumoren
All is OK: we are not quarreling here. We are exchanging views and trying to help one-another trade well. If our views can help someone make a "fortune" this new week, that means "GREAT JOY" for that person.
Pips for everyone is the goal!
Reply
PA is King
Apr 19, 2015 5:26pm
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Quoting buster48
interesting to see if it can drop and stay below .7800 now PA!
Yeah, should set the tone for the beginning of the week. Looks like the gap is filling. Normally that means go long...which may work. I'm more interested in tomorrow's Aussie news though. To early in the week for me to trade tonight.
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PA is King
Apr 20, 2015 5:52am
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Quoting Kushtiafx
Thank you for the reply. learning a lot form veterans
No problem. Just a quick update, I see a possible H&S forming on the 1hr chart...but that's is my least reliable chart pattern fwiw.

Cheers
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Matts Micro
Apr 19, 2015 1:27pm
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Imo up or down speculation on the news is irrelevant. Wait for clear signs from PA. AU is currently sitting in February's consolidation zone and though there maybe a spike or two, there appears to be no real direction. A new high from Friday however could be a BO from the daily H&S, though it's not pretty and could FO. Better pairs to trade imo.
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ZebraSquirl
Apr 19, 2015 9:08pm
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Quoting yunyoungro
how do you guys expect to move canada dollar ???
Just to show how two traders can view the market differently ... . My view: CAD will likely weaken in the coming days on oil price's retreat from current levels ... . At the very least, limited further upside in CAD.
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verv
Apr 19, 2015 10:41am
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Chinese figures are window dressing. I think that country is in the midst of one of the biggest bubbles of all time. Can't really see how this helps other than to inflate further and expose banks to greater risk of shock.
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Manudatinh
Apr 19, 2015 8:53am
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Quoting iumoren
The worst "forecasts" I have ever heard these days!

Check your charts very well for AUD and NZD trends:
I won't tell you on which charts/pairs to focus attention; you try to do a nice job.
I think you're the one who should check your charts iumoron!
Happy trading!
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dghent
Apr 19, 2015 11:29pm
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Quoting Guest
Although we have good news for aud last week, but market still worry about the next rate decision. It could be up but limited before next rate decision. Watch the daily 100sma and for nzd watch the daily 200sma.
I doubt it will be up, in fact I will call a 25bpts cut next meeting on the 5th May which is 2 weeks tomorrow, unless the a/u can move down 200pts which I cannot see it happening.
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FXSayWhat
Apr 20, 2015 1:54am — Edited
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Note improve will come ONLY when lending picks up in the next a few months.
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PA is King
Apr 19, 2015 5:17am
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So now the question is, will the Aussie like this news and gap up or will the market see China's slowdown as risk off and we see a gap down? TBD...
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PA is King
Apr 19, 2015 9:11am
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http://www.forexfactory.com/news.php?do=news&id=535859#post8209039
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PA is King
Apr 19, 2015 4:09pm
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Looks like the market likes the stimulus( as usual)...50pip gap up on Aussie. .7830
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PA is King
Apr 19, 2015 7:33pm
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Gap filled and already back up 30pips. Hopefully someone took the trade and is enjoying the profits.
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PA is King
Apr 19, 2015 11:13pm
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I don't use the 30min chart, sorry. Still too early for me to have a clear direction.
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PA is King
Apr 20, 2015 9:13am
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Quoting Kushtiafx
Thank s for the update, you are right, if we think about tomorrows move, it just can not be reliable.

Looks like the 1hr H&S played out just fine.
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fxx360
Apr 19, 2015 12:52pm
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The sheep traders will run ahead with this news when the market open...only to get run over by the oncoming train.
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buster48
Apr 19, 2015 4:16pm
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Quoting PA is King
Looks like the market likes the stimulus( as usual)...50pip gap up on Aussie. .7830
interesting to see if it can drop and stay below .7800 now PA!
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Manudatinh
Apr 19, 2015 8:49am
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Quoting PA is King
Is it as bad as your.7900 Aussie forecast this past Friday? ;-)
Nice one PA. Hahaha😎😎
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samaa
Apr 20, 2015 9:13am
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Quoting iumoren
The worst "forecasts" I have ever heard these days!

Check your charts very well for AUD and NZD trends:
I won't tell you on which charts/pairs to focus attention; you try to do a nice job.
look at the chart very well .i try to do nice jooooooob
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Vorex
Apr 19, 2015 8:32am
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This is bad for the Aussie in the long term
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jnetfx
Apr 19, 2015 5:54am
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the reaction for AUD will initially be up. but, as it confirms fundamental weakness in the china's economy the trend will remain down longer term for the aussie.
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almonleng
Apr 19, 2015 4:42pm
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China must be in big trouble ....
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Kushtiafx
Apr 19, 2015 8:56am
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confused with difference between senior traders... iumoren & PA is King...please shed some light about impact tomorrow morning...it sounds bearish for Aussie.if bullish then it will be selling opportunity..isn't it??thanks
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Kushtiafx
Apr 19, 2015 5:29pm
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Quoting Guest
When the market re-open the price will down first but the bullish is still strong and the price where you can buy is 0.7730. If it's break through 0.7711 the bearish trend is continue, trade carefully guys!

Thank you buddy
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Kushtiafx
Apr 19, 2015 9:54pm
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Quoting PA is King
Gap filled and already back up 30pips. Hopefully someone took the trade and is enjoying the profits.


Thanks Mate

in 30 mins chart AUDUSD chart there is a potential head and shoulder though its consolidating, any significance ? or better to ignore ? Thanks again.
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Kushtiafx
Apr 20, 2015 6:10am
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Quoting PA is King
No problem. Just a quick update, I see a possible H&S forming on the 1hr chart...but that's is my least reliable chart pattern fwiw.

Cheers
Thank s for the update, you are right, if we think about tomorrows move, it just can not be reliable.
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ZTquek
Apr 19, 2015 9:51am
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My advise will be to buy CAD/JPY or sell NZD/CAD. NZD have a CPI data release tomorrow and I expect it to be NZD negative. CAD should be performing relatively better tomorrow if the China stock market rise given that oil price have recently beached a resistance level. However, do keep a look out moving into the Europe trading hour. greece issue might return to haunt.
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sERDAr
Apr 19, 2015 5:32am
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USD up ...
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iumoren
Apr 19, 2015 5:27am
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Quoting PA is King
So now the question is, will the Aussie like this news and gap up or will the market see China's slowdown as risk off and we see a gap down? TBD...
Lack of liquidity is practically what forced China to cuts bank reserve requirement to counter slowdown.

Obviously, US, Euro Zone and Chinese economies face same problem: lack of liquidity.

In this situation, traders will only hunt for promising trends:
Aussie occupies a favorable position and its bullish trend is imminent.
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iumoren
Apr 19, 2015 7:39am
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Quoting samaa
aud and nzd down
The worst "forecasts" I have ever heard these days!

Check your charts very well for AUD and NZD trends:
I won't tell you on which charts/pairs to focus attention; you try to do a nice job.
Reply
iumoren
Apr 19, 2015 9:02am
Permalink
Quoting PA is King
Is it as bad as your.7900 Aussie forecast this past Friday? ;-)
I clearly stated that Friday's CAD and USD news will bring some trend corrections later in the day for Aussie, and this is what happened on the background of comparatively better CAD and USD news.

Overall bullish trend remains STRONG for AUDUSD and 0.79000+ target is a reality. But "gamblers" can bet for the reverse.
Reply
iumoren
Apr 19, 2015 9:06am
Permalink
Quoting Kushtiafx
confused with difference between senior traders... iumoren & PA is King...please shed some light about impact tomorrow morning...it sounds bearish for Aussie.if bullish then it will be selling opportunity..isn't it??thanks
Quoting Kushtiafx
confused with difference between senior traders... iumoren & PA is King...please shed some light about impact tomorrow morning...it sounds bearish for Aussie.if bullish then it will be selling opportunity..isn't it??thanks
Don't look only at low time frames which have minor impact on long-term trends. Focus more on higher time frames on which market movers (big banks, etc) make their stakes.
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iumoren
Apr 19, 2015 9:17am
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Quoting PA is King
This is your exact words from Friday...

"Aussie eyes 0.79000 target and above later today.

Chances are very high"
Yes, quite correct. Am not deviating from my words. But I clearly pin-pointed probabilities by saying:

"Chances are very high".

My forecast target of 0.79000 was not reached last Friday on the background of comparatively better CAD and USD news, but target remains accessible.
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iumoren
Apr 19, 2015 9:25am
Permalink
Quoting PA is King
Now don't get me wrong, I don't control the market or price...it may go up, it may go down. But you shouldn't throw stones in a glass house....calling others wrong when in fact you were wrong is inappropriate.

Happy Trading!
All is OK: we are not quarreling here. We are exchanging views and trying to help one-another trade well. If our views can help someone make a "fortune" this new week, that means "GREAT JOY" for that person.
Reply
iumoren
Apr 19, 2015 9:33am
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Quoting yunyoungro
how do you guys expect to move canada dollar ???
Currently very STRONG bearish trend for USDCAD:

Sell USDCAD this week, don't try to take quick profits on low time frames.
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peacourt
Apr 19, 2015 1:37pm
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if true, china markets will now be slowing growth , and knock on effect will be for aussie producers who supply rich iron ore and metals to it ,to slow down prodution, which in turn will undoubtedly affect the ausd currency as this commmodity is one of there best markets
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iumoren
Apr 19, 2015 1:55pm
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Quoting peacourt
if true, china markets will now be slowing growth , and knock on effect will be for aussie producers who supply rich iron ore and metals to it ,to slow down prodution, which in turn will undoubtedly affect the ausd currency as this commmodity is one of there best markets
Why should "now increased liquidity in China" lead to slow growth? And why should "increased purchasing power in China" reduce import of iron ore from Australia...with accompanying proportionate demand for Australian Dollar? I believe the maths are simple enough.
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mrlfx
Apr 19, 2015 8:54pm
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Quoting Guest
weird bunch the PBOC are. first they had to cool off the property bubble, then two days ago (Friday) they took steps to cool off the stock exchange bubble. now they are stimulating the economy.

they don't seem to know what they want, cooling off or stimulus. previously they wavered between whether to peg or unpeg the renminbi. must be the most confused central bank in the world, and that's saying a lot. seems like anything can happen at Monday open. probably best to assume nothing until London opens.
I thnk PBOC wants the equity market which is pretty hot at present to discover its right price by allowing the funds to lend its stock for short selling. It does not mean PBOC is trying to cool off the market. Shanghai composite is just about 50% of its GDP compare to 80%-180% for many develop markets. NYSE and Nasdaq is about $27 trillion market capitalisation for its $20 trillion GDP whereas Shanghai Composite index capitalisation is about $5 trillion for its $10 trillion economy.
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JeffZhou
Apr 20, 2015 9:07am
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The cut was indeed deeper than expected and is said to release over 1.37 trillion CNY. But 18.5% reserve ratio is still at historical high subject to more cuts to even 10%. With the help of Deposit Insurance Act which will be implemented soon. What's next? More interest cuts to lower corporate borrowing cost.

Renmin Bank on a row.
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yunyoungro
Apr 19, 2015 9:31am
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how do you guys expect to move canada dollar ???
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pippiphooray
Apr 19, 2015 10:25am
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This should shake things up on the open
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pippiphooray
Apr 19, 2015 6:41pm
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Quoting pippiphooray
This should shake things up on the open
Yawn
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samaa
Apr 19, 2015 7:22am
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aud and nzd down
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Kushtiafx
Apr 19, 2015 9:21am
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iumoren & PA is King..thank you both of you very much. expecting happy trading for both of you and my as well
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Kushtiafx
Apr 19, 2015 11:21pm
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Quoting PA is King
I don't use the 30min chart, sorry. Still too early for me to have a clear direction.

Thank you for the reply. learning a lot form veterans
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iumoren
Apr 19, 2015 4:46am
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Excellent way of Quantitative Easing (QE) or Emergency-Liquidity Assistance (ELA).
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Trader#6295
Apr 19, 2015 7:23am
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weird bunch the PBOC are. first they had to cool off the property bubble, then two days ago (Friday) they took steps to cool off the stock exchange bubble. now they are stimulating the economy.

they don't seem to know what they want, cooling off or stimulus. previously they wavered between whether to peg or unpeg the renminbi. must be the most confused central bank in the world, and that's saying a lot. seems like anything can happen at Monday open. probably best to assume nothing until London opens.
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Anurag2800
Apr 19, 2015 8:06am
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aud/jpy down for sure.................................
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iumoren
Apr 19, 2015 9:20am
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Quoting PA is King
http://www.forexfactory.com/news.php...59#post8209039
Absolutely correct.
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iumoren
Apr 19, 2015 9:31am
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Quoting Kushtiafx
iumoren & PA is King..thank you both of you very much. expecting happy trading for both of you and my as well
Thanks. Wishing you very profitable trading week!
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bassd
Apr 19, 2015 9:33am
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Big slap in the face for Abenomics! i think all JPY-pairs down
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myTraderider
Apr 19, 2015 9:33am
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Thank you all for consider
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FortuneRider
Apr 19, 2015 9:38am
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There is no absolute in forex. The cutting of reserve ratio from China may temporary boost Aussie and eventually fade off. Greece is on target board this week.
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ashrafsaber
Apr 19, 2015 10:00am
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How will this effect EUR/USD ?
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Trader#6456
Apr 19, 2015 1:24pm
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When the market re-open the price will down first but the bullish is still strong and the price where you can buy is 0.7730. If it's break through 0.7711 the bearish trend is continue, trade carefully guys!
Reply
Trader#548B
Apr 19, 2015 3:56pm
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so wait for following stock prices: BHP.AX for iron ore demand and 70O HK (tencent internet crap) before trading. these will give clues. Chinese got enough iron/steel and internet social media so market will be flat to dead at open. guaranteed.
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donaldkeram
Apr 19, 2015 6:23pm
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with pin bar at AUD & NZD on friday candle, i'm not sure to buy this pair. Gap up/down opening can be form engulfing
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Trader#1A12
Apr 19, 2015 9:36pm
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Although we have good news for aud last week, but market still worry about the next rate decision. It could be up but limited before next rate decision. Watch the daily 100sma and for nzd watch the daily 200sma.
Reply
Trader#CBE9
Apr 19, 2015 4:56am
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last one was 50bp...it is accelerating...
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Trader#1A71
Apr 19, 2015 5:26am
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China always surprise us on weekend.
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