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ridethepig | CHF Market Commentary 03.12.2020Another interesting play where buyers can win the flow. So, the idea to outguess a temporary floor in USDCHF is correct as we are approach very 'rich' levels for sellers. If buyers are going to have a late breakfast 0.890x is the level to load. Another few pips down and it would be difficult to defend because of the horizontal support. For those that remember the previous attempt we are tracking exactly the same attack. As we all know, the philosophy of a minor swing, is only for the evaluation of any possible situation with the major swing involved. And for this particularly we have the next leg higher in dollar cooking with some devaluation from SNB to put the icing on the cake: An interesting move, EURCHF ⬆️ and USDCHF ⬆️ up a lot more... The flow is worth considering, it is not a pitless market, very often we can close our eye to some dollar devaluation but we sellers are out of energy and we need to smooth things over. Thanks for keeping the feedback coming 👍 or 👎
Long
by ridethepig
5
ridethepig | NFP PlayNFP is threatening the breakdown in EURUSD and across G10 pairs. The flows, with centralisation focused on the dollar follow profit taking and an early advance. This can be exploited and is easy to understand what is in play (as with NZDUSD). We have our shelter at 1.215x which is our ceiling, the next step is to look for areas of value to the downside. In a classical price action style, support regions are suitable targets at 1.211x and 1.200x. This will be met with demand; macro position building. More an anyone else, you will all know how bullish we were on euro ahead of the crowd. We are back above those highs after the breakthrough and with claims ticking down we are in time for payrolls, it is harder to play the buy side this time as we are already extended and at rich levels. The idea is of course an attempt to ride a retracement on the NFP headline. Lets see how it goes.
Short
by ridethepig
15
ridethepig | NZD Chart of the WeekThis chart update comes after the conversation with @YIQI.... We are tracking how the following elegant defence can hold a breakup through, namely the main target in NZ 10Y Yields: For those who remember, the sweep and breakup was what we had our eye on. A move from 50bps to 100bps was very fancy! And now we have for ourselves a change of scenery! The previous flow must unwind, and in plan of their new attack we can ride the profit taking. Sharp sellers are itching to attack, 0.705x should be able to hold, I am in full sized positions. Thanks for keeping the feedback coming 👍or 👎
Short
by ridethepig
8
ridethepig | Dollar into December📍 Dollar into December ... Here we are dealing with a sensitive situation, which we have discussed previously at earlier opportunities. One should not overlook the underlying strength of the dollar given it is the centrepiece of the currency board. After clearing the vaccine and all is roses newsflow, the next chapter of covid and risk is here into December - I am expecting dollar to find some short-term support, investors will take cover under the table while risk rushes into the room for the coming weeks. The manoeuvre is intended to provide a retrace from the impulsive leg down, but not too far. We must defend skilfully as sellers are already 'quite in love' with the dollar devaluation story. However, markets do not move in straight lines and some legs are worthy of participation. I personally think a pullback towards 94/95 before we can continue with artificial devaluation towards 80/75 in 2021. Thanks as usual for keeping the feedback coming 👍 or 👎
TVC:DXYLong
by ridethepig
9
FX Update: Mind the gap if Powell fails to signal easingSummary: The price action yesterday smacked more than a bit of end-of-month rebalancing after an incredible month for global equity markets, but it could also be that USD traders are a bit nervous ahead of Fed Chair Powell testimony today and tomorrow, as much of the USD bear case is built on the anticipation in the nearest term that the Fed is ready to move aggressively at the December FOMC when the lame duck president Trump and Congress may not be. Today’s FX Trading focus: Fed Chair Powell testimony the next test for USD The price action yesterday – was it end-of-month volatility, or USD bears unwilling to take their case too far before getting a look at Powell testimony today and tomorrow before Senate- and House panels, respectively? Too early to tell, but the Powell testimony today is likely to help give us an answer if it sparks a round of volatility in either direction. And as noted in the summary for this article: from current USD bearish positioning, buoyant market action and even comments from other analysts, there appears to be considerable expectation that the Fed is ready to move at the December 16 FOMC meeting with new easing, something I am not entirely sure is justified, given the extremely generous financial conditions in place, recent record highs in equities, etc. Sure, Powell is likely set to plead strongly for more fiscal measures to bridge the gap between what is now a very ugly present for many Americans without income and with benefits set to expire, to a post-Covid-19 future that hopefully sees a rapid return in the direction of full employment. Of course, none of this necessarily matters if the market is happy for the Fed to merely signal – whether in Powell’s testimony and/or at the FOMC meeting, that it is simply well primed to respond with powerful easing to the least stumble in the economy or markets down the road. But the chief trouble in all of this is the structural backdrop in which we have seen a shift to fiscal primacy and the risk that monetary policy is not the medicine the economy is looking for to make up for the risk of a shortfall in demand. That being said, even if Congress can only agree on a relatively modest fiscal package, there is a considerable “wall of savings” that can be injected into the economy from this spring’s covid-19 emergency response, which was so overwhelming that personal income in aggregate grew massively, even as spending collapsed and savings rose. With incomes rapidly normalizing for many workers in recent months, an outlook for further normalization on hopes that the vaccine roll-out can see Covid-19 restrictions lifting rapidly within a few months could shift consumers into a more optimistic stance on putting their savings to work. Personal balance sheets in aggregate in the US are in pretty solid shape, and the 2008-09 financial crisis response was so generous to banks that they could be happy to lend on the margin as well. For the nearest term, however, if current market pricing is in expectation of a significant upgrade of Fed caution and even a strong easing move now rather than later, then we have the risk of a disappointment for risk sentiment in the nearest term that fiscal cliff worries could exacerbate. As well, if either of the Georgia run-off elections for the final two Senate spots are seen likely going to a Republican, investors could fret the risk of political gridlock and the lack of any notable fiscal impulse next year. This could then spoil the normally strong season and lead to some bout of consolidation in risk sentiment and a solid boost to the US dollar into year-end rather than a new down-wave. Either way, it is difficult to get a feel for a market in which so much of the price action is driven by rank speculation, fundamentals be damned. And really, November saw the greatest rally in global equities for a single month in history, and the USD ended the month only down about 2% relative to the mid-point of the previous month’s price range. Not very impressive. Hoping we get a day or two with some information value from this market, but not convinced that we will. Chart: EURUSD Yesterday’s price action, in which, for example, EURUSD just managed to kiss the big 1.2000 pivot level and AUDUSD tried at the 0.7400+ highs before the air suddenly came out of the move, created a tempting reversal pattern in places for would be USD bulls, but the move came on the last day of a stunning month for global equity markets which might have driven end-of-month flows and we have the event risk of two days of Fed Chair Powell testimony to consider – perhaps best to wait and test how sensitive the market is to Mr. Powell’s message if any hints are offered on what the December FOMC meeting will bring. In the meantime, a close above 1.2000 theoretically opens up for the next resistance zone into 1.2500+, while any steep fresh sell-off back below 1.1900 would suggest the risk of the pair remaining in the rangebound doldrums. John Hardy Head of FX Strategy Disclaimer The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. 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by Saxo
1
'Risk-off' knocking at the moonlit door; Long Gold📌 After completing a second test of 1.20xx, profit taking entered into play with the fix yesterday. Dollar is clearly restrained by Fed and WH prevention and then by a later of risk hedge clearings . Before I present the usual schematic representation, we should look at just how difficult the environment is to play correctly with timing these reversals. As soon as a divergence is formed, we have the choice of a shallow or deep retrace in EURUSD towards 1.16xx/1.17xx or a sharp leg higher in Gold towards $1,970 and $2,100. Gold bears must also bear in mind risk-off flows are once again knocking at the door via Iran after clearing the vaccine newsflow. I have been fielding questions around stimulus for a while, it is easy to lean on CB's but the correlation is breaking and exactly on time when this transfer should happen. Hard to understand; a better way to put this is look for a large correction in Gold after clearing the board to set about some painstaking defence for the next round of risk-off flows cooking. Thanks as usual for keeping the support coming 👍 or 👎
by ridethepig
8
Restraint at the highs📌 SPX has had its advance cut off; an attempt to cap it from the reckless advance allows the possibility of a panic blow which is decisive and impulsive in such situations, namely the invasion towards the pivot. This idea illustrates the stratagem of a major high against a 'positive' news flow. Since the Vol expansion is necessary for the defence of the highs, an exchange at 21/22 is the way we defend. You should memorise this move of forcing our opponent to make up their mind, after clearing the positivity newsflow around vaccine and etc we are going to have 'diversion' introduced. This should be considered playing against, contested elections and uncomfortable positioning from stimulus expectations leaves the entire board looking vulnerable. Thanks as usual for keeping the feedback coming 👍 or 👎
OANDA:SPX500USDShort
by ridethepig
13
ridethepig | USDCHF Market Commentary 2020.11.26📌 ridethepig | USDCHF Market Commentary 2020.11.26 This is one of the classic simultaneous 'worm in the apple' plays. It is an instructive illustration of the link between bids and offers in the short-term and diversionary support on the lows. The dependence of buyers position appears clearly on USD strength. The correct play here is to bid the 0.907x lows. A fresh train of thought should unlock a test of 0.912x and 0.914x. And sellers will then have to overcome their problems once more. According to the 'dollar', we are all the way at the bottom of the range for Thanksgiving and this low must be blockaded: It is with reluctance and after great thought that I decided on this diversion out on the lows. It seems somewhat daring, because conditions do not seem to be quite safe in the US. One of my main principles states that a fading attack is only correct when we see that others are willing to play too, as with Europe this morning on the open.... For the flows, entry 0.907x with targets clearly defined above at 0.912x and 0.914x while invalidation below 0.905x. As usual thanks for keeping the feedback coming 👍 or 👎
Long
by ridethepig
6
The birth of fresh weakness📌 Here we go for the main event... To illustrate the spillover effects between US and the rest of the board, we are going to use AUDJPY. This is absolutely going to be a long night, and of course, I wish it was over with already. Trump should, as has been emphasised several times, come out on top. What would be the significance of this move? Well, it renders the risk-off crowd totally mobile as it will be contested. To the other side, a Biden victory has somehow been taken as positive, let me point out the tax hikes that shall come back and will be really damaging. SELL AUDJPY @ 75.00 | TP1 73.9x | SL 75.6x Using JPY as 'defence against the dark arts' of politics tonight for multiple protection angles, in fact it puts the dark arts in the spotlight; protecting AUD outflows and JPY inflows are going to get in each other's way!
Short
by ridethepig
3
ridethepig | ECB Market Commentary 2020.10.29📌 EURUSD Market Commentary 2020.10.29 At a time when Lagarde ought to play the “leading” role, something similar to the pacemaker in the Tour de France, and not kick the can with PEPP while reading newspapers about what has happened from her home. I am personally expecting nothingness from the ECB and instead to tee up more QE in December which will be continuation of the bearish euro story. Whether we like it or not the expectations were already stacked towards one side for a muted ECB today kicking the can till December. My sense is that with lockdowns, U.S elections and Brexit hurdles still to clear, waves of supply will keep coming and the pending test of 1.153x is still the most likely outcome. Short-term looking to take the rest of my shorts off at 1.160x, while Medium-term I prefer to be long the single currency and will look to load from cheaper levels in the 1.15/1.14 range. Thanks as usual for keeping the feedback coming 👍 or 👎
Short
by ridethepig
7
ridethepig | Dollar UpdatesThe threat of a pullback has been set up, the unpleasant rally in USD as investors rush to park capital in the greenback. Just at the right moment, because of lockdowns, covid chapter II and things of this nature the highs can be burst open. Although we are in LONG TERM structural decline in the dollar, it does not mean we will not have to rush and take cover under the table when the storm hits shore. Buyers thus have a fortunate swing in play this week towards 95.4x. The job is only half finished, governments are aiming to default on the debt and covid / lockdowns provide the perfect cover. Capitalism is taking a sabbatical, it's being undermined and globalisation is collapsing like a house of cards. Thanks as usual for keeping the feedback coming 👍or 👎
TVC:DXYLong
by ridethepig
11
ridethepig | Dollar into the elections📌 This will act as the start of the next 'novel' on dollar: the first of course will serve as our map into the next 13 days. We must review the Medium and Long term charts to understand the art of what we are tracking, and the contact between Dollar and safe-haven flows as we enter into another expansion of volatility. The follow diagram portrays the position from earlier in the year, momentum arose with Covid and to such an extent that a rise in USD is no longer possible without venom for EM FX in particular. We have also been able to construct examples of the flows in main course dishes like EURUSD: In a nutshell, what we are tracking here is the C leg in a retrace wave, inside a more structural, longer term decline in the USD. A complex multi dimension environment, my short-term models are indicating of USD inflows as a protection for election risk and as an example of the ultimate safe haven with lockdowns & covid chapter II. The key question which we will answer as we move along will be if this is infact a retrace inside a sustained decline, or the start of a brand new uptrend in USD. In this scenario, a test of 97.5x would be enough to build confidence in the view. Recommend layering these in G10 and EM FX as we go for all those following the live calls. Thanks as usual for keeping the feedback coming 👍 or 👎
TVC:DXYLong
by ridethepig
27
ridethepig | USDCAD Market Commentary 2020.10.28📍 I am trying something out here with some faster flow charts. This is of similar nature to the preparations and strategy notes we made in EURUSD: In order to liberate the highs in USDCAD, buyers must take out the Tokyo defence. They are hoping to prevent the breakup for as long as possible, the annoying notion for sellers is Canada cases accelerating quickly and lockdowns chapter II entering into play. We also have managed to provoke the bull into attack from the Oil side. The supply side outweighs the demand side and will only continue to widen as national lockdowns enter back into play. The moves lower in Oil are also playable of course. Thanks as usual for keeping the feedback coming and if these shorter-term flow charts are becoming more useful for those trading the faster flows.
Long
by ridethepig
ridethepig | JPY beyond the elections🔸 USDJPY - into the elections Sellers have the move and already played the exchange towards 100 on the initial covid chapter I. They are aiming for the ideal Yearly closing position (the frontal attack against any laggards). I managed to carry out the deeply laid plan (a serious contender for chart of the year) at the beginning and by not being as familiar as I was with the well-known rules on Tradingview. Moreover, I know no other ending in which this precise striving of inflation is more clearly illustrated than in the diagram that follows: Inflation expectations proceed as follows: as dismal Covid data floods the wires => stimulus then becomes a big part of that story 📍 There is no amount of printing that can counter deflation. As globalisation contracts, it creates a deflationary tsunami on the underlying capital formation. We then have to factor in bottlenecks on the supply side from lockdowns, agricultural shortages and etc which create inflationary pressures. The key idea is that they can simply clear the way for the Suganomics/Abenomics with a different pair of Calvin Kleins and prevent the breakdown of 100 is truly the only way to save Japan, because the MT and LT outlooks look awful there. In the more immediate term, the second covid chapter and election protection may keep JPY in demand and lower-time frame rallies will still attract selling interest. Here tracking 105.8x as resistance for another attempt of 104.1x and 100.0x before the king starts its journey. How keenly the speculators are at outguessing the demise of Japan. Thanks as usual for keeping the feedback coming 👍or 👎
Long
by ridethepig
9
ridethepig | EURUSD Strategy Notes 📌 EURUSD Market Commentary 2020.10.22 A possible reversal between sellers and buyers taking profits After Eurobonds Positional Play , buyers might consider the exchanging manoeuvre from 1.20xx a good level to take profits since these levels are dangerous waters for those wanting to add longs. However, the recapture of 1.18xx is apparent, and noteworthy of how RM accounts have driven the entire leg higher from 1.16xx. Sellers simply play a protection of resistance here at 1.185/1.186 and have a chance to win control as there will be unaware buyers still loading here at these levels thinking a blue wave is positive for markets. To the downside, a test of the 1.153x is still pending and clearly visible that it is worthy of mention. Remember, whenever retail sees that a position is not working initially, they will aim to liquidate and put the remaining capital into a better swing. Unfortunately, all too often, tactics are used to trigger the liquidation and can become very unpleasant. I mea the sort of situation we are seeing around U.S. elections is threatening for another sharp increase in volatility and we have covid to put the cherry on top.
Short
by ridethepig
11
ridethepig | AUD Market Commentary 2020.10.21🔸 AUDUSD - Market Commentary 2020.10.21 The following play is aiming for a test of 70c; after a very dovish RBA earlier in the week opening the window for negative rates, we have some more downside to play. Wellll done all those selling AUDCAD , AUDUSD and AUDCNH . Volatility is going to continue to expand as we enter into the elections which will weigh heavily on AUD and NZD to a lesser extent. The play towards 70c can be opened by a fresh zig-zag from sellers. Such a move should never be played without being aware where we are wrong and measuring with certain effectiveness the bang for our buck. The downside is made possible via USD finding a temporary bid for ultimate safe-haven flows. We must recognise the dollar as the reserve currency and give it credit where credit is due. For the technical flows, looking for an eventual test of 0.700x/0.699x while invalidation above comes with a closing basis through 0.711x. Thanks as usual for keeping the feedback coming 👍 or 👎
Short
by ridethepig
2
EURUSD - Election Map📅 October 18th EURUSD - Election Map Eurobonds positional play The manoeuvre chosen by Europe to consolidate the debt cannot be criticised. It was inevitable since the Maastricht Treaty that in order to keep the currency alive they would eventually need to obtain with it 'federalised debt' in order to compete in the Premier league with US and China. Once Covid forced Merkel et al to 'bend the knee', euro buyers obtained control on the break of 1.09x and played an impulsive move towards 1.20x. Of course this move was not without venom and pressed against the ECB. An impulsive move, but one with a deeper meaning. Markets and bookies have completely miss-priced (i) the odds of a dem clean sweep being +ve for risk assets and (ii) spillovers associated with further lockdowns from covid chapter II. In many ways Covid has revealed how far the West has fallen behind in some places. However, no matter how healthy or greener the grass may look on the other side to some right now, a Biden victory will still face THE SAME CHALLENGES . Dems are throwing everything into winning and forgetting that even if they inherit the office they have done so at the cost of huge promises to public sector unions and etc which is a real problem for them. Expecting EURUSD to come under a lot of stress in order to protect from increased election risk, lockdowns and contractions in globalisation / capital formations in the immediate term. For those only interested in adding longs, this 1.15/1.14 area is where we should be hell-bent on loading full sized positions. To the topside invalidation of the 'B' in this ABC corrective swing will come from a break above 1.183x. Thanks as usual for keeping the feedback coming 👍 or 👎
Short
by ridethepig
8
ridethepig | USDCNH Long Term Macro Playbook📍 USDCNH An interesting few days for those in Chinese rates, a 100bp move in the front end, what an express train move!! Never seen anything like this before and shows the power from vol in repo fixing. PBOC will want to keep the pressure off equities, as they have been doing for some time now and hence we can see some recycling of those longs come out and make their way into bonds. This will be their only way to defend and help keep the moves to the downside contained and measured in USDCNH. In spite of the wide consolidation in Chinese Equities lately, China will be a major winner in particular from the oil crash as they were loading on the lows. The cheaper Chinese energy bill will help offset the next 12-18 month crisis. A smart move with the Oil CNY contracts as it essentially creates another mattress on the balance sheet. Later this will be described as the 'only move' that made sense and rightly so. Of course, aggressive dollar devaluation for the medium and long term is the new and decisive playbook. Sellers are happy to have held the highs, but their remaining ammunition must now make a significant impression. Those following the details of this 3rd impulsive wave may need to pull a trick or two after such a difficult battle. In any case, a test of 6.46 will be quite heart rendering, much better a deep retracement than a shallow breakup at this point .
Short
by ridethepig
1
USD/CHF - Swiss - **GREAT OPPORTUNITY THIS WEEK**USD/CHF - Most of the majors are brewing to further movement! Technical aspects: At this current moment of time we are within the range of - Support: 0.89970 & Resistance: 0.92000 (You could play the range play until it breaks) If we break below: 0.89970 we could even formed a bear flag. However, For further development regarding CHF Pair - An Inverse H&S appears, for this current moment of time it looks like it is creating the right shoulder but we must keep in mind the 50 EMA. For further bullish momentum and confirmation, above 50 EMA and above 0.92550 area whilst measuring the length of inverse H&S - we read the target of next resistance area which matches perfectly with a Fib retracement area + trendline down = 0.93300 area. (Keep in mind - this will be a counter trend move - risk management is key). Fundamental aspects regarding Dollar: The FX markets has been guided by rallying equities and precious metals but now the equity market lacks the bullish momentum (I've posted my analysis regarding SPX - Please go look for further information regarding equities) and weeks ago as the Fed has lowered expectations for now. For that reason I could see SHORT TERM bullish USD. Now, I don't think we will see any stimulus until near elections and key questions is - Has the Feds created a Bubble and has it lost its bullets...YET?! Fundamentals Calendar this week 21st Sept - 25th: Fed Powell will be speaking and testifying Monday to Thursday. Be careful whilst trading. Remember: Just a trade idea, not a recommendation. Have an excellent week ahead. All the best, Trade Journal
by Trade_Journal
ridethepig | USDCAD Market Commentary 2020.09.28Flows are starting to become more mixed as we reach the final few sessions in the Quarter. The structural decline of the dollar remains but we have some room for tactical longs in USDCAD. This is emphasised by the fact that the DXY still has a final manoeuvre to make before we step down one more time: In the short term it is buyers move to make, they have put their cards face up and with enormous effect a squeeze of the highs will make things a lot easier to play in the MT and LT decline: In a nutshell.... Continue to look for longs in USDCAD over the coming days for a test of 1.350x. Before positioning for a swing down for later in the year.
Long
by ridethepig
2