Forex Space Ride

It was a hell of a roller-coaster ride last night after FED announced it's IRD (Interest Rate Decision) unchanged at 0.25%.

Two hours after that, the RBNZ released its own IRD that remains unchanged at 2.75%

EURUSD crashes to two-month low, amid hawkish comments from FOMC.  The FED sent strong indications that a rate hike will be on the table in mid-December when it meets next after a break next month. The hawkish stance sent the euro tumbling against the dollar, as it fell below 1.09 for the firt time since early August.  EURUSD traded in a broad range between 1.0897 and 1.1095, before settling at 1.0924, down by 120pips on the session.  The euro has now closed lower against the dollar in five of the last seven sessions.

USDJPY slingshot took a dip at 119.99 and hit high of 121.24, weaker by 125pips.  After the RBNZ it settled back to 120 level while closing at 121.07.  Today market opened at 121.07 and is currently playing at 120.68

Among the currencies  NZDUSD also took a drop from .6744 to .6620, changed by 124 pips and heading towards .6500.  Further, the New Zealand dollar fell in early Asia today as the central bank held steady on rates as expected, but called for a weaker kiwi, while the dollar firmed on expectations for a Federal Reserve rate hike at the end of the year.

Despite the Reserve Bank of New Zealand's decision to hold the rates steady it jawboned the currency lower by stating that lower interest rates would be required if the exchange rate remains high.

What Thursday may bring...

Today's major trades include the following currency pairs:

JPYUSD
AUDUSD
NZDUSD

I have always warned my Portfolio Managers to never trade on days where market expects data and seems like tomorrow we'll be playing safe again. In the US Market there's the FOMC Statment and FED Interest Rate Decision to make while another Interest Rate Decision for RBNZ.

Here's a cut of what to expect then:

From Kathy Lien:

New Zealand dollar traders, on the other hand, are positioned for optimism from the Reserve Bank. Taking a look at the table below, there’s been widespread improvement in New Zealand’s economy since the September monetary-policy meeting. 

Manufacturing- and service-sector activity increased, business confidence improved, dairy prices rebounded, housing activity remains strong and consumers turned positive on the economy in October. 

The RBNZ has many reasons to be encouraged by these recent developments but the slowdown in China and the rapid appreciation in the currency is a big problem that could threaten their recovery. In the past month, NZD/USD has risen from a low of 0.6250 to 69 cents while AUD/NZDhas fallen from a high of 1.1350 to a low of 1.0575. 

If the RBNZ only talked of the improvements in the economy, it risks sending NZD even higher. After lowering rates 3 meetings in a row in September, Governor Wheeler warned that, “some further easing in the official cash rate seems likely.” While there is no need to cut again in October, the rise in the New Zealand dollar should encourage the central bank to repeat this guidance.

Happy Trading!

China: the sleeping giant

Certainly, China is marked on the market list. It's been an extreme market mover and now it's creating ripples in the early Asian Market.

I wouldn't want to see a new pair among the major currencies but if it's worth my two cents, why not!

The dollar received an additional boost after China’s central bank unexpectedly cut interest rates on Friday. It was the sixth rate cut since last November, amid efforts by authorities to shore up slowing growth in the world’s second largest economy.

On Monday, in the euro zone, the Ifo Institute is to report on German business climate.

The U.S. is to release data on new home sales.

In the week ahead, investors will be focusing on Wednesday’s monetary policy announcement by the Federal Reserve for fresh indications on the timing of an initial rate hike.

10/23 Has been an extreme market

In the early European Market, most currency pairs including EURUSD, USDJPY, NZDUSD, AUDUSD among others gained strenght over the US Dollar.

But the fate of the currency pairs took a 360 degree turn around in the US Market when China moved:

 

Investing.com - The dollar strengthened broadly to two-month highs against the other major currencies on Friday, as a surprise rate cut in China dampened risk sentiment and the previous session's upbeat U.S. data continued to support the greenback.

The dollar was higher against the yen, with USD/JPY up 0.33% at one-month highs of 121.10.

The greenback strengthened broadly after China's central bank cut interest rates for the sixth time since November in another attempt to boost the economy.

The dollar was also boosted after data on Thursday showed that the number of individuals filing for initial jobless benefits in the week ending October 17 increased by 3,000 to 259,000. Analysts had expected jobless claims to rise by 9,000 to 265,000.

A separate report showed that U.S. existing home sales increased by 4.7% to 5.55 million units last month from 5.30 million in August, compared to expectations for a 1.4% rise.

The euro erased earlier gains and EUR/USDwas down 0.74% at two-month lows of 1.1022.

The single currency remained under pressure after European Central Bank President Mario Draghi said on Thursday that the central bank will "reexamine" its monetary policy in December, hinting at the possibility for further easing measures.

Earlier Friday, research group Markit said that Germany's preliminary manufacturing purchasing managers' index ticked down to 51.6 this month from 52.3 in September, while the services PMI rose to 55.2 from 54.1.

In France, the preliminary manufacturing PMI came in at 50.7 in October, Market reported, up from 50.6 the previous month, while the services PMI ticked up to 52.3 from 51.9.

For the entire euro zone, Markit said the composite PMI, which includes both manufacturing and service sector activity, rose to 54.0 in October from 53.6 the previous month.

Elsewhere, the dollar was higher against the pound and the Swiss franc, with GBP/USDshedding 0.36% to 1.5337 and with USD/CHF advancing 0.40% to 0.9770.

The Australian dollar was higher, with AUD/USD up 0.18% at 0.7220, while NZD/USD dropped 0.65% to 0.6750.

USD/CAD gained 0.51% to trade at three-week highs of 1.3159.

Data earlier showed that Canada's consumer price index fell 0.2% in September, compared to expectations for a 0.1% downtick. Year-on-year, consumer prices rose 1.0% last month, disappointing expectations for a 1.1% increase.

Core CPI, which excludes the eight most volatile items, ticked up 0.2% last month, compared to expectations for a 0.3% gain.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.68% at 97.07, the highest level since August 19.

 

  



 

10/21 USDJPY

Yen continues to hover above 118.39 yet trying 120.00 level.

Will the rise of USD over YEN continue to today's trade? What do you think?

Oh well, as long as the MACD continues to head south i'd still prefer selling the pair.  

Since 38.20% retracement at 119.57 has been broken, I would love to keep my selling limit at 120.65 for a possible retest at 50% retracement.

It may continue to range like longer than we can think but we all know that weekly is possibly heading for another dip back to 116.00 lever to complete the formation.

There you go, I hope you had another worthy input to today's trading.

Happy trading ya'all!

Yellen speaks

So the market is anticipating the speech of Yellen. It was during the European Market when most of the currencies including AUD, NZD and YEN started to move in the Northern direction but quickly took U-turns in the US Market.

Although, these currencies are seen to appreciate in this week's trade it may take a halt until thursdays data. Existing Home Sales and Jobless Claims are just few of what we are waiting to be released.

Here is our morning technical analysis as provided for by investing.com

Connecting live to a broker is easier with technology

So many are still fond of trading forex in the country on a dealing desks. I'd say, gone are the days of manual trading, long waiting for dealings and thicker spreads on big figures. Right now is the advent of modern technology and that means trading on an NDD (no dealing desks).

Thanks to Metatrader4 for allowing possibilities to happen.

Forex Cebu goes blogging!

I've long been away from blogging and I must admit I missed it badly.  So today, I gave a special thought and decided I'll put all my forex inputs back to blogging.

It would be great to hear from you all and it will be my pleasure to share more to you.

Please do not hesitate to follow me or share your precious ideas too.

Cheers to all forex traders and happy reading!

i_am_mayb