The Gross underpricing of ECB and FOMC Monetary Policy Changes - A fully-priced medium-term equilibrium Lower coming? EURUSD: *Short EURUSD 3m-12m Duration: 1/2lots @1.11 - 1.07TP1; 1.04-5TP2 1.01TP3 1. On Decemeber 2nd the ECB cut their rate by 10bps to 0.05%, paradoxically this actually caused EURUSD to rally higher. Thus this is a mispricing as...
End of Week Summary: 1. On the week we saw risk outperform safe havens for the first time since the brexit vote and the SPX and DJ30 set new all time highs by 2% and 1.2% respectively - somewhat encouraging given this was the longest period post-crisis that equity indexes have had since new highs, with a total time of apprx 1 year. 2. Given the articles...
Bullard is the lone Fed official forecasting just one additional rate increase, and expects modest growth over the next two and a half years. But he reiterated Tuesday he's not expecting the economy to head south. However, did go out of his way to mention a relatively dovish point "We Have Some Ammunition if We Need it During Next Recession". Nonetheless he...
Post Brexit SPX vs USDJPY 1. One had expected risk to sell off post brexit as global uncertainty increases, given the amount of volatility in the FX markets in the lead up, this was the rational expectation (whilst VIX traded subdued). However, instead, SPX recovered 6% whilst Yen also rallied 7% higher in the days following the vote. 2. This risk-on risk-off...
At the start of 2016 the PBOC began aggressively devaluing the off-shore Yuan against the USD, imo in an attempt to start the year with a competitive export:import advantage - with the aim of making 2016 a headline "come back" year for China amid the growing GDP growth and Credit bubble worries. As a result Equities across the board sold-off (-8.5% in a few...
Also as additional technicals to support the short NZD$ view: 1. On the daily, weekly and H1 NU currently Trades (and at 0.73) close/ at to its +2 standard deviation lines, these are highly resistive. - Assuming NU trades mean reverting +2SD means there is a 95% chance of a price reversal/ 95% of all prices should be below the +2SD channel lines (e.g. NU...
Short NZDUSD is in my top 2 FX Trades for several reasons: 1. NZD is considered the riskiest G10 currency cross, so NZD trades weaker in risk-off markets, or when equities/ SPX trade lower (you can see the high correlation with SPX at the bottom of the graph). - With Brexit occurring last week, global risk has increased, this is especially the case for NZD due...
Short AUDUSD is in my top 3 FX Trades for several reasons: 1. AUD is considered a riskier G10 currency cross, so AUD trades weaker in risk-off markets, or when equities/ SPX trade lower (you can see the high correlation with SPX at the bottom of the graph). - With Brexit concurring last week, global risk has increased, this is especially the case for AUD due to...
Simple and straight forward.... No "QE" = Chop City See other charts for more detailed lines
GBPUSD - At the end of last week GU traded to lows of 1.32 on the brexit vote, before retracing substantially to 1.39 by the end of the day. - GU retraced 600-700pips after the brexit event IMO solely as investors took profit from their shorts (which causes buying) - thus there was no structural reason for GU recovering e.g. it was that 1.32 had mispriced GU...
If AU news is good, there is a chance that price action will break through the top trendline and then retracement to the line and then continue upwards. Need to wait for the Reserve Bank's sentiment on easing.
Conservatively in my opinion Gold should be as high as US$3000 / ounce right now, it could even overshoot to as high as U.S$10,000 an ounce given mass speculation and bubble. Look beyond the current artificial or secular bear market of gold you call it, and lay down the price of Gold relative to the M1 money supply of the United States. Since the start of the...
I spent a long time analyzing this pair, contrasting views with my colleague Nick Coulby, who specializes in Elliott Wave analysis, and working on my own time at mode analysis of this pair, as well as adding the result of insightful discussions held at Tim West's 'Key Hidden Levels' chatroom, regarding this topping pattern, as well as the patterns in the gold...
Similar to CADJPY. Could the postponed japanese stimulus leaves margin to an appreciation of the yen?
We have a new participant of the global wave of monetary easing policy after Japan, Europe, & other ASEAN nation. Keep your shorts on SGD opened at least from now until June - September 2015 :) 1.4 USDSGD is the near term target. www.bloomberg.com www.bloomberg.com
Very good risk reward trade, to capitalize on future earnings and volatility that it can cause. Also all old world problems that causes a to of volatility in February - April of 2014 are still there. The volatility can mainly increase due to crisis in Ukraine/Russia, Iraq, Iran, financial troubles of EU, slow down in China. And don't forget all upcoming talks...