Range trading Euro US

Asian markets are holding back with no significant developments in Europe. A sense of euphoria was around the Spanish bailout. But the PM's comment at a press conference doesnt imply that the bailout is coming this weekend. So the good news is fading out. Euro US is range trading. If the Euro breaks the 1.3 mark, expect positive movement, but lets wait and watch

Short the Aussie dollar

Did you catch the Reserve bank of Australia's announcements today? Well if you havent seen it have look here. I quote from the news release at the RBA website" Key commodity prices for Australia remain significantly lower than earlier in the year, even though some have regained some ground in recent weeks. The terms of trade have declined by over 10 per cent since the peak last year and will probably decline further, though they are likely to remain historically high.

Financial markets have responded positively over the past few months to signs of progress in addressing Europe's financial problems, but expectations for further progress remain high. Low appetite for risk has seen long-term interest rates faced by highly rated sovereigns, including Australia, remain at exceptionally low levels. Nonetheless, capital markets remain open to corporations and well-rated banks, and Australian banks have had no difficulty accessing funding, including on an unsecured basis. Share markets have generally risen over recent months.

In Australia, most indicators available for this meeting suggest that growth has been running close to trend, led by very large increases in capital spending in the resources sector. Consumption growth was quite firm in the first half of 2012, though some of that strength was temporary. Investment in dwellings has remained subdued, though there have been some tentative signs of improvement, while non-residential building investment has also remained weak. Looking ahead, the peak in resource investment is likely to occur next year, and may be at a lower level than earlier expected. As this peak approaches it will be important that the forecast strengthening in some other components of demand starts to occur.

 

The news release further added: 

Interest rates for borrowers have for some months been a little below their medium-term averages. There are tentative signs of this starting to have some of the expected effects, though the impact of monetary policy changes takes some time to work through the economy. However, credit growth has softened of late and the exchange rate has remained higher than might have been expected, given the observed decline in export prices and the weaker global outlook.

At today's meeting, the Board judged that, on the back of international developments, the growth outlook for next year looked a little weaker, while inflation was expected to be consistent with the target. The Board therefore decided that it was appropriate for the stance of monetary policy to be a little more accommodative.

Here is another newsreport that supports the AUD short trade (Sourde: FXstreet): J.Foley, Senior Currency Strategist at Rabobank, comments that Aussie fundamentals have been worsening as of late, along with disconcerting results in the Asian giant. And if we add that market chat still expects the RBA to ease further before year ends, the panorama for the AUD does not look precisely rosy. “On top of that, the sharp drop in Australian bond yields over the past year or so means that the AUD has lost another prop. That said, while we will continue to look for opportunities to short the AUD, we would warn that AUD/USD may not offer the greatest scope for movement”.

If you look at the support and resistance levels for the Aussie dollar according to FX street here is what they are saying:

S3	S2	S1	R1	R2	R3
1.0249	1.0275	1.0300	1.0385	1.0411	1.0437

Ok, so whats the trade im going to be running-Short the Aussie dollar, watch the trade as you go there is a lot of scope for the Aussie dollar to fall! if you ook at the charts, last year the Aussie dollar was trading at 0.96617 level. Not saying it will go that low, but the RBA wants the dollar to soften to boost exports, and this rate cut is a step in that direction.

Happy shorting of the AUD!

Trade idea around US dollar Non Farm payroll

So, I have been so busy that I have had time to do Forex trading. Need to get back, ASAP. Anyways, had some time today so looked up the Non Farm payroll today and got a trading idea/tip, try it out and let me know how it goes ( please follow my blog).

BTW the US NFP is going to be announced in 2.5 hours or 2030 hours Singapore time.

Ok so here is my  trade idea is: USD NFP If Actual NFP is greater than 160K, then go Long USDJPY

SL=30 pips TP=30 pips.**

I did some quick reading before we arrived at the above (btw, the article has nothing to d with the trading idea)

Some reading on the NFP-source: bkassetmanagement.com)

FX: Now Onto Payrolls….

With the European Central Bank’s monetary policy meeting now behind us, it is time to focus on the U.S. non-farm payrolls report. In some ways, investors are already thinking about payrolls because today’s strong rally in equities and currencies can be largely attributed to better than expected reports on the labor market. Economists initially anticipated a sharp pullback in job growth after seeing non-farm payrolls rise 163k in July but after the latest reports, a number of banks have upgraded their NFP forecasts. More specifically, job cuts eased in the month of August according to Challenger Grey & Christmas while companies added more workers to their payrolls according to ADP. While the ADP report has had a poor record of tracking payrolls, it has been more accurate forecasting the direction of payroll growth. Economists had only been looking for a 140k rise and instead, ADP reported a 201k increase in workers last month. Jobless claims also fell to its lowest level in 4 weeks and most importantly the employment component of ISM non-manufacturing rose to its highest level since April.

According to these leading indicators for non-farm payrolls, job growth could surprise to the upside but not so fast! The main argument for weaker payroll growth is the uptick in jobless claims, which is worrisome. Also, while the employment component of ISM non-manufacturing has a strong correlation with non-farm payrolls, it failed to accurately forecast the uptick in July. The index actually fell from 52.3 to 49.3 that month which means that the rebound seen today to 53.8 could be snapback from prior levels. Consumer confidence has also been mixed with the Conference Board reporting the largest decline in sentiment since October, which contrasts with the increase in the University of Michigan report. Currently economists are looking for payroll growth to slow to 130k, down from 163k the prior month. Based on the other labor market reports, there’s reason to believe that job growth could surprise to the upside but fall short of exceeding the 163k rise reported for the month of July.

Non-farm payrolls is one of those economic reports that can cause tremendous volatility for the forex markets and this month’s number is particularly important because it can determine whether or not the Federal Reserve eases next week. When the Fed Chairman last spoke in Jackson Hole, he did not commit to any changes in monetary policy but made a strong case for more stimulus. At the time, many people believed that he wanted to wait for another non-farm payrolls report before making a decision to ease. If payrolls grow by more than 130k, the central bank could opt to postpone easing but if it rises less than 100k, then QE3 or changes to the extended period language in the FOMC statement could be in play.

See the article here

Happy trading!

(**disclaimer: this is my personal thought, and I am not responsible for any outcome, please use your own discretion as any outcome from this trade is not my responsibility)

Forex and Intra day trading

Happy new year folks. I was doing some research today and came across a good blog : http://forexintradaytrading.blogspot.com/2011/08/forex-brokers-spread-comparison.html One of the other intresting things I discovered is live spread comparason for various brokerages and market makers: http://www.fxintel.com/ This lets you compare the spreads while trading and lets you take a call.

Another interesting tool is on good old Oanda:
Study a chart of the latest market activity to identify forex trends. This chart is a consolidated view of economic news, blog commentary, forex rates, OANDA spreads, and technical indicators. Use the filter field to search for specific news items.:http://fxtrade.oanda.com/analysis/forex-market-tracker


Explains all complicated PMI and other market data in a nice way to make sense http://fxtrade.oanda.com/analysis/infographics/


BTW my calls for today for intra day trading only ( maximum of 20 pips):

 USDCAD short
Euro USD long
AUD USD long

Happy trading