JohnKicklighter

JohnKicklighter

Though much of the attention in the FX market automatically goes to the majors, there are some remarkable technical pictures among the Dollar-based EM pairs. In particular, I am impressed by the pattern shaped by USDZAR through the past year. The post-pandemic recovery trendline resistance is still guiding the exchange rate lower, but we are starting to come upon...

JohnKicklighter

Top event risk for the week is tomorrow in the US CPI release. No guarantee that it can unseat the market's inertia, but inflation taps into one of the few themes that seems to strike a nerve with global investors: the beginning of the end of stimulus. There are a lot of very interesting markets exposed to this event risk like the S&P 500, US 10-Year Yield and...

JohnKicklighter

While there was heavy interest in the meme-stocks this past session, the emerging market FX space generated remarkable volatility on its own. Some of the most liquid BRICS member currencies were posting impressive rallies - like the Brazilian Real (USDBRL) and South African Rand (USDZAR). However not all EM was outpacing the Greenback. The Turkish Lira was one...

JohnKicklighter

Gold is working today on its 8th consecutive trading sessions' advance. If we close in the green, it would notch the longest series of gains for the commodity since July of last year. The pacing on the other hand is lackluster. Over an 8-day ROC, we are not even at the highs of the month. What does that mean? It will be difficult to keep progressing as significant...

JohnKicklighter

The Dollar is rallying across the board after the significant CPI beat. The 'market's favorite inflation reading' has accelerated to the fastest pace on the headline read since 2008 and fastest for the 'core' figure since Dec 1995. Going to be hard for the Fed deny the price pressures - but I wouldn't count out their commitment just yet. While there are a bunch...

JohnKicklighter

The Nasdaq 100 is a better concentration of tech companies and has been one of the driving forces of speculative appetite over the past five years - and particularly in the period post pandemic. Yet, that outperformance seems on the verge of capsizing when looking at the NDX relative to the Dow (the value index). This wouldn't necessarily suggest a full scale risk...

JohnKicklighter

The five-week rally for the SPX that we just concluded with a down week on Thursday's close was the largest since the climb that ended at the beginning of November. Looking back, it seems the duration of rallies are growing shorter - albeit modestly. I won't write off the possibility of a new record high over the next month; but I do believe that medium-term, we...

JohnKicklighter

There was considerable capitulation across 'risk' assets this past week. The question is how far the towel is thrown. Merely a pause for liquidity or the snap from reality that spurs full profit taking?

JohnKicklighter

...which makes it that much more interesting that we are testing a round psychological level like 1,200 as a channel top.

JohnKicklighter

We have been watching the volatility for the Yuan/Renminbi as a signal of the market pressure levied on Chinese officials. However, that is only one stress point for the financial-economic balance the government is trying to strike. Another FX outlet is the HKD which is the gateway for much of the capital flow into and out of China. And, where USDCNY may have...

JohnKicklighter

USDCAD was already driving to multi-year highs and as of this week running a remarkably consistent advance. Now, that run is 9 straight days. There are only two other climbs of this magnitude since the turn of the millennium. If Friday closes green (bumping it to 10 days), it will be the first such move since 1999.

JohnKicklighter

Like most Yen crosses, the GBPJPY has dove hard these past few weeks - though this is one of the more attractive technical pictures among the group. After marking a strong break of its bull trend, now facing the next major level of support around 169.50. This is a moderate tech floor. Meanwhile spot is the furthers from the 200-day MA since October 2011 - so...

JohnKicklighter

Like GBPNZD, NZDJPY is a pair that is meeting considerable Kiwi resistance. Here, the combination of a frequented pivot (played support and resistance), 200-day moving average and 50% Fib set a ceiling between 83.50 and 84. The RBNZ will have a big say in whether this upswing stalls or extends to a lasting break. I spoke about this setup and others in my...

JohnKicklighter

There is a strong mix of technical support near where GBPNZD closed out this pas week. A confluence of the 200-day SMA, a five-month trendline and two major Fib retracements all fall around 2.23. See my full run down of this and other FX trade setups in my weened trading video:...

JohnKicklighter

It was an unexpected reaction. Even if you believed the Short Euro and Long Dollar views were crowded due to the popularity of divergent monetary policy trades in the FX market, the extent of the EURUSD's rally after the ECB upgraded its QE program was exceptional. It was the biggest rally since 3/18/2009 and backed by the heaviest volume we have on FXCM record...

JohnKicklighter

Here we have US jobs figures versus the change in US nonfarm payrolls. At the extremes, the correlation is negative - dramatic job loss is usually indicative of economic and financial instability that revives the currency's safe haven status. For now, the robust figures look to be a bullish support.

JohnKicklighter

The SKEW Index is a measure of tail risk - volatility measured from unexpected moves that fall outside 2 standard deviations. It has been erratic as of late, and day-to-day changes are likely more a liquidity reaction. Much more important is the general trend of the indicator. The 20-day (1 month), 50-day, 100-day average for the risk metric is just off its...

JohnKicklighter

What are we to make of a drop from the USDollar on a day when the probability of a December rate hike moves even higher - from 68% to 72% according to the CME's Fedwatch measure from Fed Fund futures? Relative monetary policy has been a tremendous and consistent driver for much of the FX market for the past months, so it is unlikely that it is suddenly rendered...