Fundamental/News Thread

I am setting up this thread mainly because there is no thread here where people can post there views on fundamental analysis.
The aim here is to combine it with research and some tech analysis (pivots)

Fundamental analysis is a lot simpler than people make out

The things to look out for are:

a) Central bank statements- particularly the tone is really important and what are they looking at to influence interest rates (CPI,employment)
b) Geopolitical news- this can be heads of state speeches- these really influence the market

Some people think that the market will only move 50 pips following a statement/speech - this is not the case- it can take 4 or 5 days to play out and the market will move 300- 1000 pips.

However, by researching we can uncover what a central banker or politician is likley to say - set limit order before the speech/statement and wait for them to get filled.

Quite often the market will be oblivious to this. This can result in very fast moves.

The good thing is that I don't trade that often- and never ever look at charts except when placing the trade

Its so easy to press buy or sell this is not the way institutional traders trade

I only trade when there is news or strong sentiment

Over the next few weeks I will populate this thread with some ideas

If you are a fundamental trader - you are more than welcome to join

Please - No trolls, swearing, or abuse- this will not be tolerated at all

I'm interested in this thread and good on you for creating it.

Let's chat about Brexit. Do you believe there are more countries to exit the EU? if so which ones? Would this cause the EUR/USD to go up or down?

Blend with fundamental and technical analysis

When i see the news of today, i am decide to stay against the JPY and USD. Thanks for this thread it's handy.

Thought I would start off with a run down on the various currencies - this is going to take a while

a) New Zealand- Cash Rate due tomorrow - so might as well start here

Here is the latest statement:
http://www.rbnz.govt.nz/news/2016/11...o-1-75-percent

First of all Graham Wheeler is going to retire in September.
However, the one thing he hates is a high Kiwi in relation to the US dollar. He mentioned this a previous conference and even spoke about it in December
Spencer has talked about it was well

https://www.bloomberg.com/news/artic..._medium=social

Well due to Donald Trump's behaviour his wish has come true
Also New Zealand has the highest interest rate out of the 8 major currencies

Figures

GDT seem is be going up and forecasts look good
CPI - is slowly improving but is still low
Unemployment increased last time - but there seemed to be an excuse (more entrants to the workforce)
http://www.stuff.co.nz/business/8896...to-52-per-cent

New Zealand main exports are to Aus, China then the US
The figures are improving- exports have improved in the last three consecutive months

Decision

Wheeler tells it like it is and I like that
Well he has never cut consecutively before.
On balance I don't think he will cut.
However, I am sure we will be getting a big lecture during the conference about future cuts
There is another meeting in March- think that's where things will get interesting- if exports start to suffer due to a high Kiwi

Trade
Assuming he does not cut- the best trade will be during the news conference.
If this is your first time - just demo trade
I will check efxnews for further details but this is where I stand on this

Hi-

Basically - if any country leaves the EU - especially France or Germany the Euro will really suffer

Obviously everyone is looking at France at the moment - and a great trade would have been EJ
Filon is in trouble and Le Penn started her campaign a few days ago
sadly I missed this
To be honest I cant see any country leaving the Euro at the moment- but things can change

Hi dreamerbd - you are welcome!

So fundamental point of view Euro and NZD bearish...

Ok remember we are trading the news and sentiment here
So obviously timming is everything.
As regards the NZD it wil depend on what Wheeler says during the conference
In respect of the the EuroJpy its already about 300 pips south over the last few days. Any further positive stories in bloomberg or reuters on Le Penn would encourage further selling.
At the moment I will be waiting for further news before getting in.

True that! Euro is extending its decline on political woes as anti populist candidates in French and German elections are posing threats of EU disintegration. Euro is testing its major support level of 1.0620, followed by 1.0600. If this level is broken, we could see a sustainable decline in euro.

One thing these thoughts are just my opinions. Whether you trade them or not is up to you.

Ok looking at the Kiwi not the easiest of trades
Mainly because I like crystal clear sentiment

If Wheeler get s a bit hawkish- what happens- the Kiwi rallies
This is the one thing he doesnt want. CPI is still low remember.

So he will either do a wait and see and talk about his retirement.

Or say this recovery has just started is fragile and that there are risks with China and internationally (Trump). And could well cut in the future.

If he goes for it i will be selling.

One thing i would say if you are not sure don't trade.
There are plenty of other opportunities

I used to think the same myself but have started to think the opposite for several reasons.

1. Everyone trader I hear online is singing from the same hymn sheet, meaning that there is a strong likelihood that the opposite will happen. This will be similar to everyone getting caught with there pants down, following trumps election win and the inevitable rally which obliterated traders who were short stock indexes.

2. Depending on which country leaves, the market could see this as a positive. A similar kind of effect can be seen when a company spins off a non performing asset which the parent company has been having to support. Recently Xerox(NYSE:XRX) spun its business services assets into a new company called Conduent(NYSE:CNDT) leading to a rise in Xerox shares of almost 20% on the day verses -7% for Conduent stock.

As Michael Steinhardt said, any time you have a view which is in the minority, and your view turns out to be correct, you are pretty much guaranteed to make money. If you are wrong, odds are you won't lose much. Michael Steinhardt used the term "variant perception" for this concept - i.e. your profit potential is at its greatest when your thematic view is totally opposed to the prevailing wisdom, and you turn out to be right.

That is a very good point RedBaron and one which I had not considered.
Think I should have thought through my reply in more depth before typing

The real reason for the dive on the Kiwi following Wheeler's mixed statement.
This is gold

Right - picked up some pips off the NZDUSD - last night and today

Also went short on GBPUSD for a few reasons - perhaps I should have posted here but not sure who would be interested

a) Kisten Forbes (hawk) is leaving
b) Carney is dovish and is due to speak shortly
c) Trump has this new tax scheme
d) The market had been up for the past 2 days and with my wycoff hat on (bears were taking over and demand was finished)
e) We were at R1 on the daily pivot and unable to break it

Could not get much easier than that really

Also currently at 1.2500 so could expect some slight bounce back
Also near a congestion area (so market profile) and all that.

Collected 58 pips on Cable - sold at R1 and bought it at S1
Tomorrow is a Friday-no real pound news
Unless there is clear sentiment can't trade
Might trade UJ with Trump and Abe meeting up
If commentators think Trump is going to get a good deal- got to be worth it
Not sure if I have missed a fair bit of the move.
Need to have a think/read

Thought I would write a piece on when to trade the news
It might help some traders.
To tell you the truth I'm a bit bored waiting for my wife so thought I would tap this out on the phone. Im fed up playing Suduko.

Anyway in a nutshell we are looking for positive news on one currency and neutral or negative news on the other in an oversold (or overbought market).
But we still need to confirm with technical analysis

For example looking at the post on Thursday;
There was negative news on the pound and positive news on the dollar.
Plus Cable had been up for the previous 2 days.

Technically it could not break R1, demand was running out. Supply was building. And we knew that traders would not want to be long going into a speech by Carney.

In the trade we had minimal drawdown and bought almost at the low of the day and got in at the right time

The thing I like about news trading is there is no ambiguity. And you are nearly always right.

I love what's happening on here! Keep the fire burning @Fader123. I'm subscribed.

Hi there
Its just getting the time to post things
I might trade into the CAD on Friday CPI figures. Will have a check
There is a fundamental thread in systems which is pretty good.
GL
Fader

There was a potential day trade on Cable today- GJ would have been better as pound was down against the Yen for the 3 previous days

Reason:

http://www.express.co.uk/news/uk/769...barnier-munich

Missed it as I have too much to do (need to out source)

I'm learning this time from you. You can outsource the work to me when I would become pro.