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Get ready for NFP: our expectations and recommendationsThe Japanese yen steadily strengthened yesterday because of the results of the meeting of the Bank of Japan and news from China. When the Bank of Japan expectedly left the rate unchanged, the Chinese quite unexpectedly announced that they doubted the possibility of a long-term trade deal with President Donald Trump. That is, it is too early to stop worrying about the trade war. Therefore, safe-haven assets, the Japanese yen and gold yesterday were in high demand. Recall that in our review yesterday we recommended buying gold. So congratulations to those readers who follow our recommendations. It is worth noting data on the Eurozone GDP that came out on Thursday. On the one hand, it came out better than expected (+ 0.2% q / q for the forecast + 0.1% q / q), and on the other hand, the growth rate is still extremely close to zero. So there’s nothing much to rejoice about. Moreover, the unemployment rate was higher than expected, and inflation in the Eurozone continues to be rather weak. Not surprisingly, the euro travelled towards the 1.1160 resistance and hit that. The dollar was quoted quite mixed yesterday: against the yen, it fell, but against the euro and the pound - it strengthened. However, the most interesting movement will be today. Recall that data on the US labour market will be published today. Data on unemployment and average hourly wages this Friday will be much less significant. Our expectations for NFP are generally negative. If we compare the situation on the labour market now and a year ago, we can state its serious deterioration. One year ago, we were talking about the average value of the NFP 200K +, but recently it has been in the region of 150K, and the saddest thing for the US economy in all of this is that the indicator shows a clear downward trend. In general, expert forecasts confirm our expectations - the average forecast is 85K. This is more than half the average NFP over the past couple of years. However, the actual data may come out even worse. Over the past 5 months, 3 times the data on the NFP came out worse than forecasts, 1 time the analysts correctly predicted and only 1 time the actual data came out better than the forecast. So the chances are that the data will come out better than forecasts 1 to 5. We see two trading options: riskier and more profitable and less risky, but less profitable. The first option is about to start selling the dollar now in anticipation of weak data we have reasons for this. The US economy is slowing down. Which cannot but affect the state of the labour market. Accordingly, weak data will lead to sales of the dollar in the foreign exchange market. An excellent candidate for the sale is USDCAD. Also, gold purchases look very promising. As for the second option, which is less risky, we are talking about news trading. The bottom line is to work upon the release of the news. Obviously, the movement will be strong and unidirectional. That is, you do not have to guess whether the dollar goes up or down but just get into a position in the direction of movement after the data is released. To do this, we place orders like buy stop and sell stop at 2-3 minutes from the current price at that time 2-3 minutes before the news release. And we are waiting for the news to be published and one of the orders will work out. After that, you just need to be patient and wait. Risks are minimal, and earnings are limited only by your patience and the extent of the reaction of the foreign exchange market to data.
Short
by Trade24Fx
UK Per Capita GDP Using New Consumer Price Inflation (CPIH)This chart shows the GDP per capita for the UK as given by official government inflation rates (blue) and the newer CPIH which includes changes in rental cost (purple). As you can see, whereas the UK Tory government and rich landlords paint a rosy picture of life, the truth has again wandered from 'fact'. The share of GDP in real terms, which we can think of as a measure of social equality, has collapsed since 2008 and not recovered. The data has been normalised to 1 Jan 2008
F
by RealMcafee
What to expect from ECB and what to do with the euro, US inflatiAnnouncement of the ECB decision on monetary policy in the Eurozone is what everybody waiting for. Analysts are expecting lowering rates, a new quantitative easing program (an increase in bond buybacks) and all kinds of support signals from the ECB for the European economy. What are the chances? In our opinion, the chances are high enough. The fact is that the Eurozone economy is sending more and more signals about problems and the upcoming recession. Recall the German GDP growth rate in the second quarter (below zero), negative retail sales in the Eurozone and business activity indices below 50. Everything is decisively in favor of the need for ECB intervention. And although representatives of the Central Bank are supporting fiscal stimulus, it is obvious that the ECB is expected to act. What does the softening of an already ultra-soft monetary policy mean for the euro? It means that the euro will be under pressure and it needs to be sold. Against the yen, against the pound and even against the dollar. At least that is what we plan to do today and possibly in the foreseeable future (the final position will depend on the actual decisions of the ECB). Also, today it is worth paying attention to data on consumer inflation in the United States. Recall that next Wednesday the Fed should decide whether to reduce the rate or not. In this light, inflationary data can either sow doubts or remove them completely. Weak data (low inflation) will make it clear to the Fed that you can safely reduce the rate. In the end, the central bank’s main goal is to control inflation, and then help to ensure economic growth. Accordingly, weak data will be another reason for dollar sales in the foreign exchange market. Trump, meanwhile, continues to escalate, urging the Fed to lower rates to 0%. As for other trading ideas, we traditionally recommend buying gold and selling the Russian ruble. Pound purchases also remain a priority.
Short
by Trade24Fx
UK, oil news and gold forecastsWhen leading economies stably show statistics worse than analysts' forecasts and signal a slowdown in economic development, Britain continues to surprise with industrial production and GDP outcome on Monday, then on Tuesday, the statistics on the labor market turned out to be better than forecasts. In particular, the unemployment rate went below the forecast, and the average salary, on the contrary, exceeded experts' expectations. As the British Parliament temporary is not working, Johnson is in charge. After a series of humiliating defeats in the Parliament, the Prime Minister is seriously preparing for negotiations with the EU and a new deal. Although nothing has been decided yet, we continue to recommend buying British pound with stops. At least for now when the fundamental background is that favourable. The dollar strengthening in the foreign exchange market this week, in our opinion, is an excellent opportunity for selling the dollar when the price is high. The reason - the Fed will lower the rate next Wednesday, and this will be a powerful signal for dollar sales. Citigroup analysts, meanwhile, are predicting a bright future for gold, + $ 2,000 an ounce. The argumentation of the new historical lows: the growing risks of the global recession, the easing of the monetary policy of the Fed and the zero interest rates of other central banks, geopolitical instability, as well as overheating of leading stock markets. In this light, we want to recall our basic recommendation to buy gold on the intraday basis. However, bears have temporarily are in charge, we do not see any serious changes in the fundamental background, which means that gold purchases remain relevant. Another favourite position is that oil sales are becoming more and more relevant every day. But this week we want to wait for the OPEC meeting outcome before offering to open short positions. The fact is that a change in the Minister of Oil of Saudi Arabia could lead to a temporary artificial increase in market prices. This will be due to the need to provide better conditions for the initial public offering of Aramco.
FX:XAUUSDLong
by Trade24Fx
Pound & easing global monetary policyYesterday, quite unexpectedly, a block of economic data on GDP and industrial production, instead of already traditional disappointment, provided an occasion for optimism. In July UK GDP grew by 0.3% (expected to grow at 0.1%), while industrial production instead of a decline by 0.3% (expert forecasts) went to the positive zone ( + 0.1% ). Monday following Johnson’s next parliamentary defeat in a few days. His next attempt to initiate an early election failed. come into effect Law against "no-deal" Brexit came into effect. Not surprisingly, the pound continued to grow against such a background. Our position on the pound is unchanged: we are looking for points for purchases. But with small stops, because the situation with Brexit can develop quite dynamically. Meanwhile, the markets are preparing for a wave of rate cuts by leading central banks of the world. On Friday, the Bank of China lowered the rate by 0.5% to the lowest level since 2007. In this light, the decision of the ECB on Thursday is becoming more significant and significant. Recall next week the Fed, the Bank of Japan and the Bank of Switzerland will announce their decisions. So the upcoming two weeks promise to be full of news. Strengthening of the Russian ruble in the foreign exchange market is a good opportunity to begin the formation of a medium-term purchase cycle with USDRUB. Current prices are the starting point of the cycle. The next one is 63.60 and the final one is about 62.50. And finally, buying gold from current prices seems to be a very good trading opportunity. Recall it is worth buying with stops.
Long
by Trade24Fx
AFTER the fact trade : GBPCHF 8 Sept 2019Refering to this trade (also linked below the post) I exited the trade when the GDP number came out. The probability was against me when that number came out so I cut my loss immediately. I risked 0.8% for this trade and ended losing approx 0.4%. The takeaways that I would like my readers to get from this post are as follows : 1) Trading isn't about being right, it is about managing risk when you are wrong 2) Don't over-leverage 3) Apply discretion around a very well thought out trading plan/strategy (i.e the GDP number came out and I did not see the value to stay in the trade as the probability was severely against me) 4) It is okay to take a loss 5) Be wary of risk-events even if you don't include fundamental analysis in your trading methodolgies
Short
by sufiansaid
Arrangements, collapse in Germany and data from the USAThe China-United States Trade War is an ongoing economic conflict between the world's two largest economies. Two countries cannot even agree if they are talking. According to Trump, he got a call from Chinese officials, however, China did not confirm that yet. Well, quite possible that there was no call. this means that we are in a situation where the parties are in the active phase of the confrontation. In the light, we will continue to look for points to buy for safe-haven assets (the Japanese yen in the foreign exchange market and gold in the commodity market). Yesterday extremely weak data on the business climate in the largest economy of the Eurozone came out, today German GDP in the second quarter fell by 0.1%. Another quarter with a minus mark and the recession will be announced officially. Recall recession is a period of general economic decline, defined usually as a contraction in the GDP for six months (two consecutive quarters) or longer. An extremely alarming signal was the decline in German GDP mainly due to a sharp drop in the country's exports (it took 0.5% of GDP growth, actually leading it into the negative zone). This is an example of how the trade war could hurt. This news confirmed our recommendation to avoid buying euros. Instead, we suggest selling the euro against the Japanese yen and the British pound. This trading idea this week works just great. As for the dollar, not everything is that simple. Yesterday's data on orders for durable goods, consumer confidence and business activity in the US came out better than expected, which suggests that the US economy is getting better. But, our position on the dollar is unchanged - we are looking for points for its sales. First of all, against the pound and the Japanese yen. Also, on Thursday, revised data on US GDP for the second quarter will be published. Weak data may trigger a short dollar.
Short
by Trade24Fx
Pause in trade war shifts market focus on another dataA temporary truce in the trade war was announced. Well, of course, a “truce” is not the right word we prefer a “pause”. The appreciation of the renminbi, as well as the decline in the VIX Index, are further evidence of tensions easing in the financial markets. Against this background, we again pay attention to the sale of gold. But we note that sales with the random points may turn out to be unprofitable, so we select the entry points carefully, taking into account at least an hour overbought and along daily maximum. Recall that the dollar is still very strong, which is bothers Trump. And in itself, it is an opportunity for its sales in the foreign exchange market. But the markets are more interested in the Fed’s further actions - will the Central Bank cut the rate again&? What could spur the Fed on easing monetary policy? First of all, weak macroeconomic data. So today's retail sales data may well give rise to dollar sales. Retail sales report is a monthly measurement of the retail industry. Monthly retail sales data is a chain indicator. That is, The report shows the total sales for the prior month. This specificity leads to the fact that chain indicators tend to fluctuate around the zero and after a strong growth period a decline period follows, and vice versa. So, over the last two months, US retail sales have been growing. To show better results this time too, the indicator must rise quite significantly concerning the three months periods. The US economy has been weak recently, there is a reason to expect weak data on retail sales. Since markets react not to the essence, but to the gossips, the outcome of the indicator in the negative zone (although this may be an increase relative the period of two months ) can trigger dollar sales. In this regard, today we will sell the dollar. First of all, against the pound. Eurozone GDP grew by 0.2 %, however, industrial production decreased, and quite significantly (-1.6% m / m), which is the worst result over the last 3 years. China also showed weak industrial production data: plus 4.8% expected plus 5.8% (the minimum growth rate since 2002). Retail sales in Sino are also worse than expected.
FX:XAUUSDShort
by Trade24Fx
Markets recovering, and we sell almost everythingThis summer can not be called calm. Nonetheless, increased volatility and uncertainty are advantages. There are excellent trading opportunities every day, of course, if you understand what happens in the financial markets. Recall China lowered the value of the Yuan below its 7 to 1 peg against the dollar in response to a new series of U.S. tariffs. China Halts U.S. Agriculture Purchases. China has chosen the most painful points for Trump. The result was a sharp increase in demand for safe-haven assets, so those of our readers who heed our recommendations should have made good money buying gold and the Japanese yen. However, the value of gold and the Japanese yen, in our opinion, is too high. Yes, and the VIX Fear index dynamics. (decreased by more than 20% of the maximum marks achieved after Trump's decision to raise tariffs) suggests that the worst is over so far. So this week we will sell both gold and the Japanese yen. Since such a decision runs counter to the current the market will, we fix each position with hard stops. Friday appeared extremely “bad day” for the pound. Last week, the pound was consolidating in the region of 1.21-1.22 ( GBPUSD), gradually “compressing the spring”. As a result, UK GDP growth for the second quarter decreased (expected zero growth), as industrial production in June. The UK GDP growth rate has not crossed the negative zone since 2012. So when the GBPUSD is lower than 1.21 is a trend. Our trading position on the pound has not changed much - we continue to keep its medium-term purchases, but on the intraday basis go against the market and take extra minutes is not worth it. So for now, GBPUSD is below 1.21 so its short-term purchases you should probably wait with. A return above 1.21 will be a signal for its purchases. As for the upcoming week, on Tuesday, we pay attention to statistics on the UK labor market and consumer inflation in the United States, on Wednesday to the Eurozone GDP and inflation in the UK, on Thursday we monitor data on retail sales in the US and the UK, and on Friday we fix profit. So it won’t be boring. We continue to work and earn. Our trading activity for today will be exclusively bearish: we sell gold and the Japanese yen; We sell the Russian ruble and oil.
FOREXCOM:XAUUSDShort
by Trade24Fx
Getting ready for a pound move and earning with USDCADThis week is not that much eventful for the financial market however there is an exception - Friday. A block of statistics from the UK, including data on GDP and industrial production. The general slowdown in the global economy, not positive expectations of experts may well come true. The current forecast for UK GDP growth in the second quarter is 0%. That is, too close to the negative zone. The decline in GDP will be a significant and negative signal for the pound. So, we are not sure about its purchase today. Especially when you consider the extremely aggressive rhetoric from the current British authorities regarding Brexit. The thesis "Brexit at any cost" continues to dominate. In general, today for the pound may well be the day of the start of a big move. The fact is that the consolidation at the bottom is clearly delayed. For more than a week, GBPUSD has been fluctuating in a range of 100 pips. This is extremely atypical for a quite volatile couple and, as a rule, is a sign of big movement. The spring is compressed to its limit, and today's data could straighten it, causing a sharp increase in the pound. Today we see the following plan for working with GBPUSD. Weak data and sinking below 1.21 mark is a signal to sell the GBPUSD with minimum targets at a low of 1.20. But if the data turns out to be better than forecasts, the “spring” may straighten in the opposite direction. In this case, a full correction in GBPUSD is inevitable. Therefore, we consider the good data, along with the rising above 1.22, as a strong signal to buy with targets 1.2420. As for other statistics, a large block of data on the Canadian labor market will be published. Our recommendation is to trade on the news. 2-3 minutes before its release, we place pending orders “buy stop” and “sell stop” at 15-20 points from the current price. We are waiting for the data and earn. It is worth noting a certain yuan stabilization - China is trying to show that it was just a demonstration of power and not a currency war. Rising tensions and concerns in global financial markets, demand has grown not only for gold and the Japanese yen but also for US Treasury bonds, traditionally the main object of interest from institutional investors and central banks from around the world. As a result of the growing demand for US treasury bonds, demand for the dollar naturally grows (inverters need dollars to buy bonds). So it seems Trump has outplayed himself. And instead of provoking the dollar devaluation, and increased demand for it and exacerbated the already unpleasant situation for the United States. Nevertheless, we do not plan to change our position yet and recommend selling the dollar on the mid-term and intraday basis. As for our other recommendations, we are still interested in selling the Russian ruble and oil, as well as buying the Japanese yen.
by Trade24Fx
GBP/USD Long - Return to the Point of ControlGBP is currently a hot topic, with Boris Johnson just in and the uncertainty of Brexit fear is running high. Are there parallels to Trump? The general narrative then (beware the seduction of narratives), was that if he got in the USD would tank, but it did the opposite. Will we see the same here? Let's have a look at the charts. Timeframes Monthly Weekly Daily ------------------------------------------------------------------------------ DISCLAIMER: this is not financial advice, trade at your own risk. ------------------------------------------------------------------------------
Long
by Jicka
FOMC decision and dollar reaction, BoE and other newsThe main event of yesterday was undoubtedly the announcement of the outcome of the meeting of the Federal Open Market Operations Committee. The 0.25% cut has "symbolic importance" as one analyst puts it. data from the Fed funds futures market has suggested that for weeks 100% of investors already expected at least that much. We still do believe that we have to sell the dollar. The reason is the same. We prefer to make decisions based on facts, rather than rumours and expectations. After the Federal Reserve's announcement that it would lower its basic interest rate that is a bearish signal for the dollar. Plus, the Fed announces a plan to end balance sheet runoff well ahead of schedule. Another fact and another signal in favor of dollar sales. As well as market sentiment has not changed fundamentally even despite the rapid growth of the dollar. More than 80% of traders expect at least the second reduction in the Fed rate in 2019. Data on GDP and consumer inflation in the Eurozone, which came out in line with our expectations. Note that Eurozone GDP Growth Confirmed at 0.2% So the Eurozone economy continues its unconvincing series of economic data. In this light, we find a very prospective position on the foreign exchange market - sales of EURGBP. Also yesterday, data on employment in the US from ADP were published. Private payrolls rose 156,000 in July, better than economist estimates of 150,000. On Friday the NFP outlook will be published, so Friday will be an interesting day. Bank of England meeting results that is what we are waiting for today. Markets do not expect any surprises, which is generally logical. Despite the fact that today the Bank of England will give support the pound, we continue to recommend its purchasing. The motivation is the same - the markets incorrectly assess Brexit situation and its outcome. Also, pay attention to the data on business activity in the United States. We sell Russian ruble and oil and buy the Japanese yen.
by Trade24Fx
The Fed, the Banks of Japan and EnglandAt the last meeting, the Governing Council of the European Central Bank (ECB) decided that the interest rate remain unchanged. Also, Mario Draghi said that officials had not discussed the rate cut. Accordingly, the euro has a good chance this week to rebound from the medium-term range lowest level. In this regard, our position on the euro - we buy primarily against the dollar. Boris Johnson Became U.K. Prime Minister, Replacing Theresa May. Markets are frankly afraid of Johnson because of his aggressive position on Brexit. As a result, the pound is under strong downward pressure. But again, it is so far underwater right now given that there are no real reasons for this - market expectations are based on fears and rumours, not facts. We believe that common sense will eventually win and bet on the pound growth. Therefore, we recommend its purchase. The data on the US GDP for the second quarter will be published today. GDP probably expanded 1.8% in the second quarter, down from 3.1%. If the growth is 2.2-2.5%, then the dollar, perhaps, is not in danger until Wednesday. But if 1.8%, it cannot avoid sales. This will be the main event not only of the week but of the summer. Wednesday may well lay the foundation for a dollar downtrend in upcoming months or even years. We are still waiting for the Central Banks of Japan and England meetings, as well as the Eurozone GDP outcome and the US labor market data to come out. In general, it will not be boring. Our trading recommendations for the week are as follows. We will continue to look for opportunities for selling the dollar across the entire spectrum of the foreign exchange market, buying the pound against the dollar as well as against the euro, selling oil and the Russian ruble, and also buying the Japanese yen against the dollar. As for gold, in the oversold we buy and in the overbought area we sell gold.
Long
by Trade24Fx
Prepare for US GDP, ECB results and Fear IndexAt yesterdays' meeting, the Governing Council of the European Central Bank (ECB) decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively. Nevertheless, the comments from the Central Bank turned out to be very dovish, opening the way to further monetary easing in September. For the euro, of course, this is not a positive sign. However, we do not throw the euro under a bus yet, because next week’s meeting of the Federal Reserve will likely mark the beginning of a prolonged period of lower interest rates, in our opinion, this event is more important than words about future easing (in the battle of facts with expectations, we will give preference to facts). Also, the euro is supported by the head of the European Central Bank, Mario Draghi, who said that officials had not discussed the rate cut. Our position is unchanged - we buy EURUSD with current price with stops lower than 1.11. The data on the US GDP for the second quarter will be published today. GDP probably expanded 1.8% in the second quarter, down from 3.1%. If the growth is 2.2-2.5%, then the dollar, perhaps, is not in danger until Wednesday. But if 1.8%, it cannot avoid sales. So, dollar current price seems to us extremely attractive for its sales. Meanwhile, the VIX Index ( it is also known by other names like "Fear Gauge" or "Fear Index) dropped to Multi-Year Lows. That is, traders and investors have calmed down. That calls into the question the safe-haven assets growth demand and explains yesterday's weakness of the yen and gold. Given then the level of volatility in gold has increased, we prefer to trade with the Japanese yen. Its purchase against the dollar is still relevant for us. Our trading recommendations for today: We will continue to look for opportunities for selling the dollar across the foreign exchange market entire spectrum, buying the pound against the dollar as well as against the euro, selling oil and the Russian ruble, and also buying the Japanese yen against the dollar. As for gold, in the oversold we buy and in the overbought area we sell gold.
Long
by Trade24Fx
Preparing for ECB and UK Prime MinisterTrump said Thursday that a U.S. Navy ship had destroyed an Iranian drone in a “defensive action,” escalating already high tensions in the Gulf region. On the next day, Iran dismissed the report. So, investors’ reaction was expressed by rescuing in safe heaven assets and it is understandable. Later, the gold price was correlated with a decrease in the gold price. By the way, on Friday we recommended to sell gold, so those of our readers who followed our recommendation had to earn good money. We have already recommended selling the oil (see our previous reviews) so, those of our readers had a chance to earn good money by selling oil (one of our main trading recommendation). So this week we continue to look for the opportunity to sell the asset, but be careful it is all about the unstable situation. There was a lot of talk about a possible dollar intervention last week. It hadn't got to that part yet but the risk should be disregarded. The easiest and risk-free option to trade in such case is a short dollar. Moreover, at the end of the week, we are waiting for the outcome on US GDP. So this week we will continue to look for points to open short positions on the dollar. Primarily against the Japanese yen and the British pound. This week (on July 24th ) a new prime minister should appear in the UK. Odds are about 100% that Boris Johnson is going to be. In this regard, attention to Brexit among participants of the foreign exchange market is increased sharply, which means pound volatility will increase significantly. Our midterm position - short-pound. But let us warn you, some days it is quite possible the pound could be sold out quite tough. Nevertheless, we do not doubt the final outlook for its growth. We will buy a pound not only against the dollar but also against the euro. And against the euro, this can be done in double volumes. EURGBP has climbed very high, and its decline seems to us the most likely scenario. The reason for its sales may be the outcome of the ECB meeting, which will be announced this week on Thursday. If the Central Bank gives us a hint to easing monetary policy, sales in EURGBP cannot be avoided. So we took a medium-term short position in EURGBP and look forward to a jackpot.
Short
by Trade24Fx