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  • #41
  • Apr 10, 2017 6:50pm Apr 10, 2017 6:50pm
Quoting vladutz112
{quote} thx i do read all i find about fundamental but i still don't get my head around them i guess i have to keep reading btw do u think that today CAD strength was because the housing starts beated expectations?
Hi vladutz112

concentrate on central bank policy statements and the speeches from the govenors.
Looking at the CAD - think that this was driven by oil (WTI rallied today), because Liyba's largest oilfield closed down
http://www.reuters.com/article/us-gl...-idUSKBN17C02S

Here is an example of how I would approach fundamentals for the CAD

View the latest statement

http://www.bankofcanada.ca/2017/03/f...se-2017-03-01/

Typically, I would look through this statement to see if these issues have been addressed.

Here is the recent employment stats

http://www.statcan.gc.ca/daily-quoti...70407a-eng.htm

Employment seems to be positive

Here are the latest CPI figures

http://www.statcan.gc.ca/daily-quoti...70324a-eng.htm

Exports had a huge drop

http://www.statcan.gc.ca/daily-quoti...70404a-eng.htm

So its a bit of a mixed picture and Poloz also gave a recent interview:

http://www.macleans.ca/economy/econo...erybody-loses/
http://www.macleans.ca/economy/econo...ut-the-band-2/

So looking at it - we can see that he thinks there is a lot of slack in the economy, he has concerns about housing indebtness and has issues with the economy

Will his position change over last month -can't see it.

Into this we have oil rallying due to Syria and Libya- when oil rallies it can go on for a while

Will price move 800+ pips - on the balance of probabilities I doubt it.

What we need is a change of bias - and that is not what we have now.

But overall I am slightly bearish on Wednesday
  • #42
  • Apr 12, 2017 11:04pm Apr 12, 2017 11:04pm
Quoting Fader123
{quote} ... If 8 currencies is too much just cut it down to a few.
In my case, I have it down to just one: New Zealand Dollar (NZD).

And I am basically using it as a test study at the moment.
  • #43
  • Apr 12, 2017 11:47pm Apr 12, 2017 11:47pm
Quoting Fader123
Thought I would put fingers to keyboard to describe how I day trade major economic releases...{image}
I don't mean to over-simplify this approach, however I am testing it out also with data releases/events on the weekly calendar.

As an example, early In this week I tried to trade GBP weakness into the CPI releases/Earnings data (probably not the best example)... I needed to try my hand at this.
  • #44
  • Edited 5:23am Apr 28, 2017 5:07am | Edited 5:23am
How do you trade the latest Eurozone CPI print?...

Underlying Core Flash CPI yoy has come out highest since 2013 from what I see. Step in the right direction if you ask me, and that's what the ECB wants going by their last policy statements. Maybe this is one more reason for mounting pressure on the ECB to begin rolling back its easing programme.


Sentiment (the past week) remains overall positive -French elections result and all... not to forget stream of encouraging data prints too.

Fundamentals remain overall bearish due to political uncertainties in the zone and current stimulus programme.

@Fader123, what would you do with this sort of information?
  • #45
  • Edited 9:02am Apr 28, 2017 8:18am | Edited 9:02am
Hi been really busy at the moment.

Looking that the Euro CPI figures

Trading the event-

Sentiment going into the event was bullish - market rallied- now coming off.

Would I trade this now- nope

On a longer term basis - we have to go back to the ECB meeting.

Remember it's a change in interest rate bias/expectations that will really drive the market.
And if I don't see a change- I am not going to trade

Looking at the latest meeting Draghi said

"The risks surrounding the euro area growth outlook, while moving towards a more balanced configuration, are still tilted to the downside

Underlying inflation pressures continue to remain subdued and have yet to show a convincing upward trend.

The ongoing volatility in headline inflation underlines the need to look through transient developments which have no implication for the medium-term outlook for price stability".

A very substantial degree of monetary accommodation is still needed for underlying inflation pressures to build up and support headline inflation in the medium-term. In terms of my criteria the assessment hasn't really changed."

How bearish/dovish is this. We need to ask ourselves why?

One thing I have noticed is that since the Fed backtracked on their 4 hikes this year position- Draghi too seems to have pulled back a bit (despite some decent prints).

It's really strange - Graeme Wheeler said that the one thing he hates is a strong Kiwi against the dollar. And the Swiss are always selling the Franc. Why would the Euro be any different.

A strong currency hurts exports. As the Euro has rallied recently- I can only think that this is playing on Draghi's mind (although he has not mentioned it) and will probably rally post election- the last thing Draghi wants to do is to add fuel to the fire.

Having said that I have seen that some of the banks have gone long in the expectation of a more hawkish ECB.

If the Fed changes its tune- I would not be surprised to see a more hawkish ECB.
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  • #46
  • Apr 28, 2017 9:22am Apr 28, 2017 9:22am
Quoting Fader123
Hi been really busy at the moment. Looking that the Euro CPI figures Trading the event- Sentiment going into the event was bullish - market rallied- now coming off. Would I trade this now- nope On a longer term basis - we have to go back to the ECB meeting. Remember it's a change in interest rate bias/expectations that will really drive the market. And if I don't see a change- I am not going to trade Looking at the latest meeting Draghi said "The risks surrounding the euro area growth outlook, while moving towards a more balanced configuration,...
hy Fader when u have time can u please post some charts showing when there was a change in bias?
  • #47
  • Edited 10:21am Apr 28, 2017 9:54am | Edited 10:21am
Here is the RBNZ in Feb

http://www.cnbc.com/2017/02/08/rbnz-...licy-bias.html

One thing it also depends on what the market has already expected or priced in
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  • #48
  • Apr 28, 2017 3:43pm Apr 28, 2017 3:43pm
Thanks @Fader for taking time out of your schedule to reply.

Quoting Fader123
...Remember it's a change in interest rate bias/expectations that will really drive the market. And if I don't see a change- I am not going to trade ...
If I understand the above point well -and applying it to the Euro in this case- this means you will not trade the Euro (exception being Geo-political event e.g French elections) until the next ECB speech or meeting, at which point you will be looking for a change in bias... right?

I'd love to know, how would you trade the upcoming French election?

Also, do you ever look to trade weekly data releases on the calendar, when you know they have the potential to drive the markets? Or are you solely focused on Central bank statements and speeches?

Pls don't mind my asking too many questions. Thanks.
  • #49
  • Apr 28, 2017 3:49pm Apr 28, 2017 3:49pm
Quoting Fader123
Here is the RBNZ in Feb http://www.cnbc.com/2017/02/08/rbnz-...licy-bias.html One thing it also depends on what the market has already expected or priced in {image}

So, in this case the market expected the RBNZ to adopt a more bullish bias, but it instead choose to remain cautious. Hence the disappointment and the drop that followed.

In this case, the bank did not change it's bias. Instead, it was the markets who was forced to change theirs. Am I correct?
  • #50
  • Apr 28, 2017 6:20pm Apr 28, 2017 6:20pm
Quoting 4rXal-ghul
Thanks @Fader for taking time out of your schedule to reply. {quote} If I understand the above point well -and applying it to the Euro in this case- this means you will not trade the Euro (exception being Geo-political event e.g French elections) until the next ECB speech or meeting, at which point you will be looking for a change in bias... right? I'd love to know, how would you trade the upcoming French election? Also, do you ever look to trade weekly data releases on the calendar, when you know they have the potential to drive the markets? Or...
A lot of questions; I used to trade the releases. To be honest I don't get the time. But they are quite reliable. There are various ways of trading them. Quite often you will get a number of releases being made at the same time- so this can cause some whipsaws. If the market is bullish going into a release and there are fairly positive figures - then you can fade the event, as we had today.
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  • #51
  • Apr 28, 2017 6:37pm Apr 28, 2017 6:37pm
Trading is ultimately betting. That is what we are doing. So the more we know the better we are going to be.
In respect of the French election - I will read what the banks are thinking and then research what price action is likely to take place before, during and after the event (based on previous elections)
If I am happy with everything - will map out the various scenario's, all the levels and will then act accordingly when the time comes.
That is the plan - whether I will get enough time to do all this is another matter.
  • #52
  • Edited 2:38pm May 1, 2017 12:55pm | Edited 2:38pm
Staring at fundamentals can mean that we miss what price is telling us.
Without price we are lost. Day trading, I use pivots, fixes and opening prices as points to really take note of.
Also having an understanding of Wycoff (supply and demand) helps- and what decent set ups look like - really helps
The screen shot is the GBPUSD.

Price moved in the following manner during the day;

Bullish going into London session. (there was a rejection off S1)
When London opened - it tested the Daily Pivot
Then pulled back to test the London open again
Failed re-test of the day's high/daily pivot, (NY open)
Pulled back to retest London open,
Rallied back up to retest NY
Then plunged down to test the low of the day
And on its way to ensuring that the 4pm fix was also the say price at the London open
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  • #53
  • May 1, 2017 2:00pm May 1, 2017 2:00pm
Quoting Fader123
Staring at fundamentals can mean that we miss what price is telling us. Without price we are lost. Day trading, I use pivots, fixes and opening prices as points to really take note of. Also having an understanding of Wycoff (supply and demand) helps- and what decent set ups look like - really helps The screen shot is the usdgbp. Price moved in the following manner during the day; Bullish going into London session. (there was a rejection off S1) When London opened - it tested the Daily Pivot Then pulled back to test the London open again Failed re-test...
The movement is truly more deliberate than random.. (if that makes any sense).

But it is refreshing to see how and why price moves in the way it moves..

Also I appreciate how you tell the story with clear, visually appealing charts anytime you explain a point. Thanks Fader.

I am about to do some real work on improving my market sentiment analysis skills the next few days. There are going to be a lot of questions. I hope you'd have the time to entertain some of them.

For a start: What is "Wycoff"?
  • #54
  • May 1, 2017 2:49pm May 1, 2017 2:49pm
Sorry I meant Wyckoff. It's to do with supply and demand. Will pm you some information on it
  • #55
  • May 1, 2017 3:01pm May 1, 2017 3:01pm
Here is an example of Wyckoff in action from about 17.00- following the re-test of the (4pm) fix/London open.
Basically demand was finished and was swamped by supply
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  • #56
  • May 2, 2017 6:03am May 2, 2017 6:03am
Quoting Fader123
Here is an example of Wyckoff in action from about 17.00- following the re-test of the (4pm) fix/London open. Basically demand was finished and was swamped by supply {image}
Thanks Fader123.

Exits are the most important, but a good entry is as important.

From what I can deduce, this has a lot to do with market timing.. price and time? It is as if you are closely tracking the movement of institutional money/activity.

I know a thing a or two about supply and demand trading... the other "Supply and Demand" trading. And I've found it helps me pick low risk entries. I'm reading up on this Wyckoff methodology.
  • #57
  • Edited 5:49pm May 6, 2017 11:40am | Edited 5:49pm
Thought I would do some analysis on the Aussie

A) Iron ore prices are on the drift - mainly because in China iron production has started in earnest
https://www.businessinsider.com.au/i...y-falls-2017-5
b) Also the indicators see a slow down in China
c) In Aus CPI missed - but is expected to slowly increase.
d) Unemployment is expected to decrease over time. (job adverts were up)
e) Lowe really wants to see a pick up in non-mining activity.
h) Here is his latest speach which really goes into his concerns and the things he would like to see
https://www.rba.gov.au/speeches/2017...017-05-04.html
*) An increase in income against debt- due to housing issues
i) He also talked about increasing interest rates at some point in the future.
j) Here is the latest statement
http://www.rba.gov.au/media-releases/2017/mr-17-09.html

GDP has been increasing recently- albeit mainly due to iron ore and coal
https://www.markiteconomics.com/Surv...69abdb6acb75f1

Citi have advised that house prices are likely to drop over the next couple of years

http://www.news.com.au/finance/econo...22e7d9ef45dba8


Bit of a mixed picture:

Following Lowe's recent speech - he appears to be almost bullish in the longer term- obviously there are an awful lot of issues in the meantime.
This could provide some up movement in the Aussie.
The statement seemed to have a slight improvement on the previous one.
Employment figures will provide a good pointer over the next couple of weeks
In the intermediate term looking at GDP I think it will drift down further due to lower iron ore prices. If China changes its tune - then we could see some strength returning on iron ore prices- but at the moment I cannot see that happening
Think inflation will pick up later on- mainly due to the cheap Aussie
Ultimately non mining business must pick up and there has been news on stimulus (tax cuts) to get that moving, although it may need to be extended
A potential drop in the price of housing would help reduce the debt-income issue (although we are a long way from being there yet)

So my initial thoughts are bearish (all the banks are) - mainly due to iron ore
But Lowe talking up the Aussie and if the tax cuts come through- will definitely help, any beat on CPI will also give it some extra impetus.
If we get some decent employment figures - this will really help as well as providing the market with some confidence in Lowe's views.
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  • #58
  • May 8, 2017 3:26am May 8, 2017 3:26am
Some decent job adverts out in Aus

http://www.sbs.com.au/news/article/2...s-strength-anz

Retail sales and the budget are due next.

If we get some movement (taxes) - this could really improve things

http://www.sbs.com.au/news/article/2...udget-tax-cuts

Shorted eurusd yesterday - but should have been euraud
(euro- as in sell the news and the aussie due to the decent figures overnight)

Need to keep on eye on iron ore prices
  • #59
  • May 8, 2017 4:49am May 8, 2017 4:49am
Hmmmmm..

Let me take sometime to digest this.

... and lest I forget, thank you @fader123 for this!
  • #60
  • May 8, 2017 5:10am May 8, 2017 5:10am
Quoting Fader123
..... Shorted eurusd yesterday - but should have been euraud (euro- as in sell the news and the aussie due to the decent figures overnight) ...
Fading in practice!

I somehow found myself in a short EurNzd trade going into the weekend (it wasn't in the plan to leave it open over the weekend), but then buy-the-rumor-sell-fact ensured my position closed out for profit this morning. I did buy the EUR last week leading up to election weekend.

With the French election gone by.. that's one less cloud (a major one indeed) hanging over the future of the Euro. Fundamentals looks promising...

Is the Euro likely to resume it's bullish trend? Is this selloff just a correction?
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