Tag: Forex

On Friday, the House of Commons rejected Prime Minister Theresa May’s EU Withdrawal Agreement for a third.  Now the UK will receive from the EU an Article 50 extension until April 12.  At that point, PM May will have to choose between requesting a much longer extension that would require participation in the EU parliament elections or a so-called no deal Brexit.  As expected, the British Pound dropped due to further uncertainty.

As a result, the GBP/AUD dropped as well and right into my daily demand zone that I have been waiting for. But just to recap the trade set-up

When New Zealand released their December quarterly GDP report and revealed that domestic demand was strong, with inflation expectations holding just above 2%, Governor Orr stated the official cash rate would not change through through 2019 and 2020.

Thus, the Markets were looking for the RBNZ to hold the official cash rate (OCR) at 1.75% with a slightly dovish shift in their rate statement yesterday to confirm expectations of a rate cut in November or early 2020.

Well, yesterday the Reserve Bank of New Zealand (RBNZ) kept rates unchanged, but said the next rate move will likely be on the downside.  RBNZ

The main event for the New Zealand Dollar this week is the Reserve Bank of New Zealand (RBNZ) interest rate decision tomorrow.  Many analysts expect the RBNZ to leave rates unchanged at 1.75% tomorrow.

The New Zealand Dollar, like the Aussie is highly sensitive to developments in China.  U.S.-China trade talks are scheduled to start up again this Thursday. Any positive news will be bullish for the New Zealand dollar, but bearish if the talks stall again with no clear path forward.

Ahead of these two events, I put on a position trade this morning.

Monthly Chart (Curve Timeframe) – monthly supply is

Theresa May could be forced to quit as prime minister in the next few days with a number of her most senior ministers lining up a temporary replacement to the lead the country through Brexit.The Cabinet has turned against May and is urging her to stand down, Sunday’s editions of the Times and the Mail both report, after a week which saw the Brexit crisis worsen and her relationship with MPs hit rock bottom.The prime minister angered virtually all sides of her Conservative party and the House of Commons as a whole this week when she blamed MPs for the

The Bank of Canada was expecting after three years of raising interest rates, that a strong economy at the time would lead to inflation.  That didn’t happen and what exists today is a Canadian economy that is slowing.  All you have to do is look at the Canadian housing market.  What was once too hot to touch is starting to melt down.  Despite renewed interests in buying oil, many analysts think the Canadian dollar is headed lower.

The Canadian dollar may sink back to its record low of 62 U.S. cents as the country retrenches from a consumer-spending boom into the

The Canadian dollar is weak, the Swiss Franc is a safen haven if the Markets start to turn. Also the Canadian dollar isn’t correlated with oil right now. So based on fundamentals, I shouldn’t have taken the trade. Technically, I could say the same.

Monthly Chart (curve/range time frame) – monthly demand is 0.7175 and monthly supply is 0.7850.

Weekly Chart (trend time frame) – the trend is sideways and price is in the middle of the range.

Daily Chart (entry time frame) – price came down to the daily demand zone and is within a 4 hr demand zone. What

I wrote about the Brexit Delay two months ago,

Currency Analysis Report 1-16-19…Brexit Delayed Again

Today, U.K. Prime Minister Theresa May asked Parliament to approve the withdrawal agreement with the European Union. The withdrawal agreement was rejected by 432 votes to 202. The 230 vote defeat is thought to be the largest in U.K. political history. U.K. government now has just three working days to map out a new plan of action.

The more Brexit lingers, the probability decreases England will leave the EU. Many think leaving the EU will hurt England.

Daily Chart (Entry) – no entry at the moment,

10,000 Ft View – 4 Hr Chart

There are a couple of things I like about this trade set-up.

Price is within weekly and daily zones.  In addition, price formed a “M” pattern on the daily chart. 

NOTE: a “M” pattern is just a double top signaling a trend reversal pattern.

Thus, I was looking for a pull back before the continuation down. I wasn’t in love with the zone, even drilled down to a 1 hr chart to evaluate the zone. But I took the trade based on all the other factors discussed.

However, I was stopped out of the trade

I last spoke about the EUR/USD back in November,

Forex Analysis Report 11-11-18…More Pain In Store For The EUR/USD (Update)

On the daily chart, when price came down to the weekly pivot, it formed a demand zone, but price couldn’t close above the previous highs. Thus, the chart suggests, price will breached this daily supply and continue to fall.

This past Thursday, the European Central Bank (ECB) announced the issuance of a new round of long-term loans to eurozone banks.

NOTE: this is the third issuance
of cheap loans known as targeted long-term refinancing operations (TLTROs) to
eurozone banks.

and extending a pledge

This past Saturday, Trump spoke at the Conservative Political Action Conference in National Harbor, Maryland.  One of the topics of discussion was the US dollar.  Trump hinted at wanting a weaker US dollar.  I say hinted because he said he wants a strong dollar, but not at the sacrifice of US business being hurt when doing business abroad.

I recently read an article on FXStreet.com about the US dollar and one of their analysts had the following to say:

We view that the greenback is likely to stay strong due to stronger US treasury yields and weaker global yields. I.e. the dollar