Fundamental Journal

AUD Update (post RBA statement):

- Was waiting for a few weeks a strong upside move on AUD based on Australian economic data improving over the last few months and not expecting any further rate cut from RBA.
- However I got caught in some bad trades AUD long trades with price of GOLD going lower and bad chinese economics data.
- Today got the RBA holding rate cut at 2.00 : "The biggest surprise in today's RBA policy statement was the removal of “further depreciation seems both likely and necessary”. As this has triggered short-term boost for AUD, market participants started to wonder if this might constitute a turning point for the currency."

That might be the confirmation for my previous AUD bullish bias:
Trade ideas: Long AUD/NZD + Short EUR/AUD



EUR/AUD: Got trapped at the area above 1.50 (in yellow), I was not expecting price to pierce this area with such strenght !!! Well that is life Gonna put a sell limit and trail it every 50 pips. EUR/AUD just going South 200pips without retrace..... Might have a small retrace in the pink Area...




AUD/NZD, I got a small loss few days ago while having a position on a "pre-breakout" trade that failed. Now I got two better entry price on this pair and expecting the 1.1440 to be broken on the upside... Got a pending buy limit that will also trail

Lots of traders getting killed today.... Here are some of the key Fundamentals:

- USD Last FOMC: We can read that there is still some incertainty due to the lower than expected inflation data, so the September rate hike is still unsure at that time, that can create a retracement on the USD
- China rate cut
- EUR unwind of carry trades
- Chinese stock tanking hard
- risk off coming back

Lots of weird stuff coming out which I can not completely make sense out of it..... My belief is today we have a STOP HUNT on EUR/USD pair unless 1.17 gets broken... so I added a short here and belive we might come back around 1.10 area by end of the year at least

EUR/USD Nice H4 Pinbar:


if the high of the Pin is taken out I might have to close all my positions for a loss...

EUR/AUD:


Really good trade management, I saw 1.50 holding as support and pink area also not being broken, as soon as I saw about china cutting rate I closed all positions as both Fundamentals and Technical and Price action were against this SHORT trade.

NZD shorts:
- this week we have inflation expectation that should be bad due to low milk price and china lower demand + weaker currency + lower commodity prices
- We also have trade balance which is always terrible during the NZ winter (see historical data)
--> So no concern about being short on the NZD

too bad I did not add another short at 1.16 on EUR/USD , now I have one sell limit at 1.15 and another at 1.14


CHF:
Inflation getting really really concerning, we have a mix of a strenghtening currency + with deflation + low interest rate, a bit similar to JAPAN,
its bigger trading partners EUROZONE is still in recovery with cheaper products than Switzerland.


--> Might have a surprise rate cut in september and heavy purchase of EURO (altough Jordan mention that further rate cut was not likely...)

Trading opportunities on the EUR/CAD, CHF/CAD, GBP/CAD at monthly resistance area:





On a fundamental point of view, I would be okay to short the EURO or the CHF against the CAD but I wouldnt short the GBP (even if the 3 days Pinbar looks prettier)

- All EUR/CAD/CHF have some bearish Fundamentals imo and its a bit hard to trade weak currency amongst each other.... CAD is most likely to have already priced in a lot and can be ready for a retracement (strenght) on a TA.

I will give myself another day to decide whether I buy a bit of CAD

Hey Chan.. I really like your analysis on currencies , more often than not it agrees with mho.. you always put a very logical point across which in the end will benefit your trading returns. I agree with your analysis on CHF but I will add - sometimes the safe haven takes president over all other factors, even macro with negative rates....

With the current market sentiment guessing whether the US - GBP will rise and if China is going to cut deeper may leave an air of uncertainty and the one thing Ive learn't is the markets don't like uncertainty... The next move is very interesting as it seems to me Macro man/woman is waiting for the next piece of news to define their bias..

The markets will show us..

I hope your Weekend is peaceful and congratulations on your journal, I really enjoy reading it... keep it up

Cheers... Ja

Glad to see you passing by j4d you are very welcome to post in here ! Out of this uncertainty, you have to be certain of your trade ideas, analysis and where it will prove you wrong to exit ^^

Still focusing on the commodity currencies ^^

AUD

This week have lots of AUD important Fundamentals factors:

- tomorrow is Building approvals which I expect to beat estimate as real estate is growing niceley out there --> BULL
- tomorrow is CASH Rate + Rba statements ---> Last 3-4 RBA annoucement created some AUD buying, not expecting any tone mentionning further rate cut -> BULL
- GDP Q/Q on wednesday
- Retail Sales on thursday
- Price of gold not decreasing anymore --> Bull
- Iron ore also stabilized

--> I think this week might be good for AUD, and my AUD/NZD long should do nicely

CAD:
really important to Watch this chart:



Those last three bars stick out from the rest, so we might have some buying on the ol. --> BULL CAD

Thursday --> Trade balance, very likely to be bad... --> BEAR
Friday --> unemployment, previous 6.8, expected 6.8, very likely to get to 6.9 --> BEAR
--> Trade plan would be to buy some CAD, if price of OIL continue to gets higher... Certainly wait for Trade balance result and unemployment date before adding any CAD

USD/RUB:

Good shorting opportunity here for the courageous one ^^, Unfortunately 0.01 is too high lots with my risk management so cannot short this currency unfortunately

AUD

Well I am getting crushed for the second time being long the AUD....
My reasonning to be Long for Q3/2015 on this currency was that econmic dats improved nicely on the second Quarter 2015 + Central bank were to hold rate according to my analysis

--> Unfortunately ecomic data have been bad this week, GDP, Retail Sales (Bearish)
--> Slowdown from China (Bearish)
--> Commodity prices in downtrend and still no strong reversal signs (Bearish)
--> Seem to have Rates on hold at 2% (bullish)
--> Housing prices on the uptrend (bullish)

So now I am not as bullish as I used to and it rate it as a Weak currency again... Waiting for Commodity prices to pickup

NZD

Milk Price starting to pick up, we got two nice increase over the last milk auction (Bullish)
Business Sentiment has been extremly bad (Bearish) --> Might certainly improve over the next few months
Rate cut expected for September meeting (Bearish)
very low inflation about 0.3-0.4% y/y (Bearish)

Now its just look like two very weak currency and its hard to trade on against the other...

Price Action:
About 4-5 try to break the resistance at 1.13 but it failed... Now it looks like price will certainly break the support at 1.0917 and go lower
--> 1.00 should hold and seem to be a strong bottom but I am not ready to risk that much, so I will try to get out at a good price 1.10, 1.11 if price does a small retrace,
--> If no rate cut on NZD next week I will definetely close this trade at a loss

Hi what is the best way to get the last bank report?

Hello xiangyuzhao,

Id say the best way if you have friends or money:
1) Get a friend working there sharing with you the information
2) Open a Good Sized account at a bank to receive their bank reports
3) http://ransquawk.com/ its a really good news feed with some banks information

If you are low on money like most of us here ^^:
1) efxnews.com
2) http://www.forex-central.net/
3) Google search for some banks to see if you can find their PDFS leaked somewhere

Well what I belive is that those reports are written by the analysts and researcher and their main purpose is "Advertising" and Attracting customers and are not really what the banks will do; separated from investment department.... So I do not follow their advices blindly ^^

I find that the researchers team at Morgan Stanley, Credit Suisse, Goldman Sachs, Credit Agricole are quite impressive!!
The one at Dankse Bank, Barclays and not really good ^^

from EFXNEWS MorganStanley team:
http://www.efxnews.com/story/30287/u...morgan-stanley


GBP: Waiting for Opportunities to Sell. Bearish.
We maintain our bearish GBP view, but are cautious that current levels may not be the most attractive to enter short positions. Markets have pushed the timing of the first hike in the UK back to August 2016, well beyond our economists’ expectation of a February hike. However, risk appetite remains weak and concerns in China are high. GBP tends to underperform in periods of heightened volatility, and this could continue.


AUD: Domestic Story Deteriorating. Bearish.
Despite the sell-off already seen in AUD, we believe there is scope for further weakness. It’s notable that AUD has sold off even as iron ore prices rose recently, suggesting that it is more than simply a reflection of external factors. Indeed, domestic data continue to deteriorate and themarket is now pricing in nearly a full cut by the end of the year. Still, with our economists expecting a cut in November, we believe the market will move to our more dovish view, pressuring AUD."

NZD OCR:

"A reduction in the OCR is warranted by the softening in the economy and the need to keep future average CPI inflation near the 2 percent target midpoint. At this stage, some further easing in the OCR seems likely. This will depend on the emerging flow of economic data"

Can go to bed now, still confident about my short NZD, no much news on the NZD for september...
5october --> business confidence
6october--> CPI Q/Q

Currency Strenght for Q1 2016:

Strong: USD
Mid-Strong: JPY, NZD
Medium: GBP, AUD
Mid-Weak EUR, CAD
Weak CHF


USD Comment:
- Wait strong retracement to buy USD, no point in buying a breakout on this currency.
- the FEd finally delivered what the market was expecting in December 2015 with its rate hike which is a good sign, but we are still in cautious mode and the goal of rising interest rate was to avoid that the inflation rate overshoot the FED's target forcing them to increase their interest rate in an urgent manner
- Certainly no further rate hike in first and second quarter 2016

PLAN: Long on retrace (USD/EUR; USD/CHF, USD/AUD, USD/CAD

JPY comment:
- Last monetary statement "disapointed the market" and the JPY got stronger
- Not expecting further increased monetary easing. Japan will now lower taxation rate to stimulate its economy. (switching from monetary policies to fiscal policies)
- Economic Data getting slightly better over the last quarters (excepted for inflation remaining low)
- JPY is highly inversely-correlated with stock market. as stock market rises, JPY decreases (good to monitor stock market to trade JPY)

PLAN: LONG (JPY/AUD, JPY/CHF, JPY/EUR)

NZD comment:
- Raising Unemployment rate and lowered inflation rate over the year 2015 which made me shorts this currency, however over the last three rate cut I've noticed that he NZD always rallied and gained strenght thereafter... Looks like the bearish components are already fully priced into the currency
- Milk Price stabilized
- Still lots of tourism and and immigration which is good for the economy
- Not Worth getting short anymore as the SWAPS would kill me, especially in ranging markets...
- I would still consider a difficult currency to trade

PLAN: wait patiently for ranging market to get some long SWAPS such as NZD/CAD NZD/EUR

GBP comment:
- Ive noticed an accumulation of short orders in Q4/2015 which kept me away from BUYING the currency
- Not willing to SHORT at those low levels, and still not enough clues to go LONG
- Plan is to wait a sort of accumulation/shake off of buy orders and go LONG, otherwise stay on the sideline

PLAN: wait for a good retrace to SHORT higher, or ranging markets/accumulation/shake'off at the lows to LONG

AUD comment:
- tough pair for me to trade, got crushed in 2015....
- highly correlated with commodities (more than NZD) imo, most important indicator for this currency at the moment

PLAN: wait for commodities IRON CORE, GOLD to bottom/ranging markets/accumulation/shake'off at the lows to go LONG or good retrace HIGHER to short the PAIR

EUR comment:
- have to monitor inflation as this is the biggest trigger on the pair
- it starts to become dangerous to short this currency at thoses levels
- Still expecting another strong leg down on the EUR crosses

PLAN: I have already quite a lot of shorts on the EUR currency, so ADD if I have opportunity to short HIGHER or HEDGE (BUY) prior to European CPI data as this could create a strong retrace on the currency.

CAD comment:
- trigger is petrol prices
- Might be a good LONG for Q3 2016 if ol prices stabilize, otherwise LONG is FORBIDDEN on this currency

CHF comment:
- dont really know about this currency but I'd rather short it than long it...

- IC Markets DEMO accounts: unfortunately my Demo explorers are not running anymore. They were replicating my trades on my live account which I cannot link here as it is not MT4...

Few Levels that I am looking at:

AUD/JPY:
86.00 AREA to short


USD/CHF:
1.00 AREA to long


XAG/USD
15.80 AREA to short
XAG/USD has still space to go lower until 10.00-8.00 to come back to its original value before the bubble


XAG/XAU
Short

Stocks:
I am not trading stocks at all but still looking it with an interested eye:

SHORT APPLE ?
- Apple Watches not meeting expectations
- Paying Dividends (signs that it does not know where to invest anymore with its mountain of cash...)
- in the maturity stage

Hello, there seem to be lots of emotions and hype on the OIL and Natural gas recently. So I will write a small article on my research this afternoon (it is a vast subject and am nowhere from being a specialist just took a few hours this afternoon on this). I also focused on the US//CANADIAN//Norway//European economies.

So lets start by identifying the key players and key figures:

 

1. Historical biggest player: USA, first in the industry and developed huge multinational companies
2. To preserve their common interests and certainly against the USA, some small countries have decided to create a cartel to align their common strategy with each other(profit maximization and social program) : OPEC
   1. IRAN, IRAQ, KUWAIT, SAUDI ARABIA, VENEZUELA, QATAR, INDONESIA, LYBYA, UAE, ALGERIA, NIGERIA, ECADUOR, ANGOLA

   
   

TOP 5 countries by PROVEN OIL RESERVES (Wikipedia):
https://en.wikipedia.org/wiki/List_of_countries_by_proven_oil_reserves
in millions barrels

1. VENEZUELA 298000
2. SAUDIA ARABIA 268000
3. CANADA 174000
4. IRAN 158000
5. IRAQ 140000

1. Most of the reserve are in Arabic countries//North America

TOP 5 countries by oil production (Wikipedia)
https://en.wikipedia.org/wiki/List_of_countries_by_oil_production
in bbl/day

1. USA 14000000 (mostly internal consumption, export to CANADA 33b/year, Mexico 24b year, Brazil 7b year)
2. Saudi Arabia 11600000
3. Russia 10800000 (internal consumption + export to Europe 150b year and China 30b year)
4. China 4572000 (mostly for internal consumption)
5. Canada 4383000 (internal consumption + 121b export to USA/year, about 99% of its oil exports)

1. Most of the production by Arabic countries//North America//China//Russia
2. Big exporters are OPEC members (export to ASIA-PACIFIC, EU mainly), RUSSIA (export to EU & China mainly) & CANADA (export 99% to US)

TOP 5 countries by consumption (Wikipedia)
https://en.wikipedia.org/wiki/List_of_countries_by_oil_consumption
in bbl/day

1. EU ?? (purchase about 33% from RUSSIA, 40% from OPEC, 10% Norway)
2. USA 19800000 (purchase mostly from CANADA//MEXICO OPEC 1-1) https://www.eia.gov/dnav/pet/pet_mov...0_mbblpd_a.htm
3. China 9800000 (purchase mostly from OPEC//RUSSIA)
4. Japan 4500000
5. India 3500000
6. Russia 3200000

1. All the US production is consumed by local market//Canada and Mexico, they buy the rest from CANADA and SAUDIA ARABIA mostly

Attached Image (click to enlarge)

European import per country

Attached Image (click to enlarge)

Cost to produce one barrel of oil:
http://money.cnn.com/interactive/economy/the-cost-to-produce-a-barrel-of-oil/index.html?iid=EL
We have the price to produce one barrel of oil:

Attached Image (click to enlarge)

--> We can see that Arabic oil is much cheaper with an average of about 9$barrel while North American oil cost about 40$barrel


So I tried to understand why oil prices have decreased over the last year . However there are many possibilities and different agendas/geopolitical issues that I still do not have enough knowledge to risk a conclusion .

--> Could be a move from OPEC to gain market share from RUSSIA/US/CANADA.
--> Could be a move from OPEC allied with US/CANADA against RUSSIA

Amateur Guess to some economical/geopolitcal reason for low ol prices:

So I tried to understand why oil prices have decreased over the last year with the following theories I found on internet:

1. ECONOMICS 101; SUPPLY AND DEMAND

Demand

1. for oil is still intact imo but world growth is decreasing so we somewhat have lower than expected demand CHECK

Supply:

1. at 100$ Barrel I believe that new supply came to the market as new technology allowed to exploit some more expensive field. (Especially from north America)
2. Opening negotiations with IRAN for oil transaction (increased supply),
3. and increased supply from the OPEC as a whole: (note that this is against some OPEC member such as VENEZUELA that heavily depends on OIL) CHECK

http://www.aljazeera.com/programmes/...090410559.html

2. OPEC MEMBERS INCREASING SUPPLY TO INCREASE MARKET SHARE, GET COMPETITORS OUT OF THE MARKET:
For me it would be a direct attack to North American countries with higher production costs it is important to note that to date, North American countries are almost self sufficient.

https://www.eia.gov/dnav/pet/pet_mov...0_mbblpd_a.htm


Well at that price, it means that American companies would sell product at 30$ that costs them 40$ to produce which would make sense to buy Arabic oil instead But by doing so, it would have huge social costs by laying off tons of employees so IMO Government could intervene to support oil companies and local consumption Therefore It will be hard for OPEC members to take market share in NORTH AMERICA due to PROTECTIONISM However it will discourage North America from exploiting expensive oil field and exporting to EUROPE, SOUTH AMERICA

OPEC can easily take market share from RUSSIA which is at the moment quite weak with higher oil costs as they are in strong economic recession. They certainly can increase their shares in EUROPEAN markets, Chinese markets, and secures their shares in AFRICA/ASIA-PACIFIC region where they already have the monopoly.

3. GLOBAL COMMODITY PRICES DECREASE:
Well its not only oil prices that are decreasing but most of the commodities prices are getting depressed. Which can be explained by lower growth perspectives and maybe from my crazy mind we could have some big buys deciding that for the better good they would decrease commodity and boost global growth ??? (just a thought ^^)

Conclusion:
1st scenario: 40%
OPEC depressing the price for a short period of time to show the world that they exist and get some negotiation power, maybe increase some market share in EUROPE. Then discuss with RUSSIA and US/CANADA behind the curtain for oil market share repartition and futures prices or any other agreement
OPEC MEMBERS: so now you feel our power right ?
US/CANADA/RUSSIA: yes we apologize for trying to increase our production and take some market shares in EUROPE, but price is so low that it really hurts our economy, just leave us a piece of the cake and the rest is yours
OPEC MEMBERS: ok, just sign the paper and do not dare stepping on our garden


2nd scenario: 20%
OPEC has a long-term plan with price below 30 for an extended time. Forcing Canada, US, Russia to purchase from them and abandon their oil production. Those big guys would not like it and definitely show their teeth as it would harm their economy a lot more than the advantage of purchasing cheaper oil

3rd scenario: 10%
OPEC realizes that it is not sustainable (VENEZUELA ???) and are fighting with budget deficit. So they decide to decrease supply in order to increase oil price. Basically we come back to 50-80$ barrel

4rd scenario 30%
Dont know


Well in all the scenario the big Winners are EUROPE and CHINA, that is the only thing I know !!!!!

Well let’s relate it to FOREX and the CAD now:

The current trigger point on the CAD is oil prices where USD/CAD is strongly correlated with. We also have to bear in mind that at the price of 30$ barrel, Canadian(US) companies are certainly exploiting OIL at a loss.

On the negative note:
Unemployment, trade balance etc.. have been really bad recently, + expected rate cut this week.

On the positive note:

1. However, I am sure that the big oil companies should have enough reserve to survive for 1-2 tough year + subsidiary from government to operate, USA big brother is still in expansion and will still try to help Canada’s economy by purchasing its oil.
2. Total natural resources represents only 5% of GDP !!! (unless some other countries which is between 30-50% for OPEC members), so yeah,, Canadian economy is not ONLY oil !!!

http://data.worldbank.org/indicator/NY.GDP.PETR.RT.ZS
http://wdi.worldbank.org/table/3.15
http://www.indexmundi.com/facts/indi...GDP.PETR.RT.ZS
https://www.ic.gc.ca/app/scr/sbms/sb...11-91&lang=eng


Chart interesting event:
I could feel lot of emotion on the 15 January 2016 on the OIL // CAD crosses with a suspicions Breakout (100 pip move in seconds). Let’s see how this unfold next week with BOC expected rate cut from 0.50 to 0.25.

EUR/GBP:

Beautiful Monthly level to short:


Still have to be careful with Brexit

XAU/USD interesting level: 1200$/ounce

100SMA on the Weekly chart


--> Could have some sellers coming back around that area
--> If we have a clear break, we could come back in Bullish mode !! (looks like enough momentum to take this level out !)

My last year of trading performance:

July 2015 to March 2016 (9 months):
Real live Account of CHF 15'000 @ DUKASCOPY



Lowest Equity: 14'650 (-2%)
Highest Equity: 15'700 (+4%)
Ending Equity: 15'200 (+1%)
Max Run-Up: +6%
Max Run-Down: -4%

--> about 1%return for 9 months trading



--> The reason I closed my position at the end of march was that I invested quite heavily EUR/USD short (positions opened for more than 6 months), but as per the chart above there was a change in the Fundamentals... 3 up move on EUR/USD in blue during Draghi's speech witth the following tone:
- No more further monetary policies to boost European Economy. So I was in a situation where I hold some short EUR/USD for a long-time and suddenly the tone of hte ECB changed. After waiting for so long, it was really painful to close those positions for a such small gain ...

My conclusion:
Effort: I have invested lot of time into this project and the expense of my carrier, and I can say that I tried my best at trading and have no excuses for my failure
Return: It is not Worth it... risking 4% to gain 1% which is only CHF 200 !!!, I'd better put it at the bank and get better full-time job... What I gained in Forex trading for 9 months is what I can earn working in a corporation for a few hours...

--> If I want to make a nice living from trading, I would need a capital of 500KCHF- 1000KCHF and I could live the dream. But I do not have this amount and the performance I have is not good enough to manage funds...

--> So I will focus on my career until I can fund a trading account of about 100-200KCHF in 5-10 years. It is too risky to pursue trading now with a low capital and more importantly, there are better opportunies for me elsewhere... However, I will still keep a look on the calendar ^^

Goodbye !