Wednesday, November 15, 2017

Gold prices have posted small losses

Gold prices have posted small losses in the Wednesday session. In the North American session, the spot price for an ounce of gold is $1278.34, down 0.14% on the day. On the release front, the focus was on consumer indicators. CPI and Core CPI matched the forecasts, with gains of 0.1% and 0.2%, respectively. Consumer spending reports were a mix – retail sales gained 0.1%, below the estimate of 0.2%. Core Retail Sales came in at 0.2%, beating the forecast of 0.0%. As well, the Empire State Manufacturing Index slowed to 19.4 points, well short of the estimate of 25.3 points. This reading marked a 4-month low.
Gold is showing volatility on Wednesday. The metal pushed to a high of $1289.50, its highest level since October 20. However, the metal has given up these gains in the North American session, after the release of retail sales and CPI. We could continue to see movement from gold, as investors keep a close eye on the tax overhaul bill which is on its way to Congress. If the bill gains steam, we are likely to see the dollar move higher, which could weigh on gold prices.
Although consumer price index numbers remain weak, there was better news from producer price index reports on Wednesday. Core PPI and PPI remained unchanged at 0.4%, beating their estimates. PPI increased at an annualized rate of 2.8%, its fastest gain since February 2012. Inflation levels are being closely monitored by the Federal Reserve, as stronger inflation levels would likely result in a rate hike in early 2018. The markets are very bullish on higher rates, with a December hike priced in at 93% and a January raise priced in at 89%.

Tuesday, November 7, 2017

EUR/CHF up to 1.18

 Strong eurozone fundamentals and Swiss National Bank's ongoing aim to keep the Swiss franc away from investors' safe haven appetite will push EUR/CHF up to 1.18 in six months and to 1.20 at the end of 2018, says Rabobank. EUR/CHF is last down 0.1% at 1.1574. "The combination of strong growth, low rates and relatively stable politics in the eurozone means that from an investors' perspective this could be as good as it gets." This provides support for the euro and at the same time takes away some investor appetite for the Swiss franc. Moreover, low inflation in Switzerland means the SNB will likely continue its loose monetary policy, says Rabobank.

Tuesday, October 31, 2017

Canadian dollar

The Canadian dollar continues to show a lack of movement this week. In the Tuesday session, USD/CAD is trading at 1.2903, up 0.51% on the day. In economic news, Canadian GDP declined 0.1%, short of the estimate of +0.1%.  On the inflation front, the Raw Materials Price Index dropped 0.1%, missing the forecast of 0.4%. Later in the day, BoC Governor Stephen Poloz testifies before the House of Commons Standing Committee on Finance in Ottawa. In the US, today’s key event is CB Consumer Confidence, which is expected to climb to 121.1 points. Wednesday is a busy day, with the US releasing two key events – ADP Nonfarm Payrolls and ISM Manufacturing PMI. As well, the FOMC will release its monthly rate statement.
Canada’s economy contracted in August, surprising the markets, which had expected a small gain. The decline of 0.1% was the first drop since October 2016. The soft reading has pushed USD/CAD above the 1.29 line at the start of the North American session. The Canadian dollar is on the verge of dropping to a 10-week low,and has endured a miserable October, slipping some 3.5 percent.

Thursday, October 19, 2017

Risks for USD/JPY are growing, Societe Generale says

Risks for USD/JPY are growing, Societe Generale says, given that Japanese economy is improving steadily and "the U.S. dollar is on a secular downtrend." Japan would rather have a weaker currency to improve its economy and drive inflation up, but since the economy is getting slightly better, SocGen sees potential for the yen. Prime Minister Shinzo Abe is likely to win the Sunday elections, but "Abenomics [which targets a weak yen] is losing its impact on the yen." USD/JPY is down 0.4% at 112.50. "USD/JPY has become a hostage to U.S. bond yields and Fed expectations," SocGen adds.

Tuesday, October 10, 2017

EUR/CHF rises 0.1% to a two-week high


EUR/CHF rises 0.1% to a two-week high of 1.1526 on Tuesday, according to Factset, as investors shrug off risks relating to the possibility of Catalan independence while concerns about the German election result diminish, Morgan Stanley says. It notes that German Chancellor Angela Merkel's CDU and CSU sister party have agreed on immigration policies and talks on forming a coalition with the FDP and the Greens are due to start next week. Morgan Stanley adds that EUR/CHF "should break higher with Spanish-Catalan tension de-escalating." Catalan President Carles Puigdemont is due to speak later on Tuesday and is expected to reveal his position on Catalonia's independence. EUR/CHF last up 0.1% at 1.1517

Thursday, October 5, 2017

The Labor Department

The number of claims drawn by workers longer than a week rose 2,000 to 1.938 million in the week ended Sept. 23. Data on continuing claims are released with a one-week lag.
The Labor Department on Friday will release its September jobs report, which could also show hurricane-related distortions. Economists have predicted a modest 80,000 new nonfarm jobs and an unemployment rate steady at 4.4%. Puerto Rico and the Virgin Islands aren't counted in national employment data, though the storm-battered territories were included in Thursday's jobless-claims figures.

Wednesday, October 4, 2017

EUR/USD to rise to 1.1820

EUR/USD to rise to 1.1820 in the next 24 hours, potentially boosted by the European Central Bank minutes, which are due for release on Thursday. "ECB-watchers will be waiting for the minutes of the ECB Sep 7th meeting ... for signs as to what the ECB tapering plans may be on October 26th," it says, adding: "We slightly favour EUR/USD climbing back to the 1.1820 area over the next 24 hours." The ECB is expected to reduce the EUR60billion monthly total of bond purchases, but the question is by how much and when. The market is also looking at whether the central bank will set a deadline for its quantitative easing program. EUR/USD last up 0.2% at 1.1766.

Tuesday, October 3, 2017

Federal Reserve governor

Federal Reserve governor Jerome Powell and Commodity Futures Trading Commission Chairman J. Christopher Giancarlo, say they are confident regulators can come to an agreement on changing the Volcker rule ban on certain types of bank trading in the coming months. "We are going to be able to get to a five-agency rule on Volcker that is significantly less burdensome, that is faithful to the intent of Congress," Powell says. "But I'm not going to tell you that its going to be quick or easy."

Monday, October 2, 2017

The British pound has recorded considerable losses

The British pound has recorded considerable losses in the Monday session. In North American trade, GBP/USD is trading at 1.3267, down 0.97% on the day. On the release front, British Manufacturing PMI slowed to 55.9, but still fell short of the forecast of 56.3 points. There was better news in the US, as ISM Manufacturing PMI accelerated to 60.8, beating the forecast of 57.9. This was the indicator’s highest level since April 2011. On Tuesday, the UK releases Construction PMI, which is expected at 51.2 points. As well, the BoE will release the minutes of the quarterly Financial Policy Committee meeting.
With investors keeping a nervous glance on the slow pace of the Brexit negotiations, any key British indicators which fall short of expectations could send the pound sharply lower. This was the case on Monday, as British Manufacturing PMI softened and missed the forecast. Although the reading of 55.9 indicates respectable expansion in the manufacturing sector, perception is key in the markets, and negative sentiment about the British economy could spell trouble for the pound.

Thursday, September 28, 2017

Societe Generale says

Societe Generale says at times when the U.S. dollar was falling this year, it is likely that the Chinese authorities were buying U.S. treasuries while buying EUR/USD at the same time to rebalance reserves. "That allowed USD/CNY to fall without the value of the yuan overall going up." SocGen therefore recommends buying EUR/USD, as well as emerging market currencies, if USD/CNY starts falling again. USD/CNY reached a one-month high of 6.6759 on Thursday. But since the beginning of the year, USD/CNY was on a downward path, falling to 6.44 in early September 8 from around 6.96 on Jan. 3

Friday, September 22, 2017

GBP/USD is down 0.5% at 1.3513.

GBP/USD is down 0.5% at 1.3513. Sterling is falling versus the U.S. below 1.35 to as low as 1.3489 because British Prime Minister Theresa May isn't giving much detail on how she sees the relationship between the U.K. and the EU after Brexit. Speaking in Florence, she did say that she doesn't see a deal similar to the one Canada has with the EU, or one similar to an European Economic Area membership. Mrs. May says she would want the U.K. to form its own type of deal with the EU. "Let us be creative," she says. This level of unpredictability is negative for the pound. However, sterling rebounded slightly once Mrs. May said there will be an implementation period of about two years, which gives more time for the U.K. and its currency to adjust to the new landscape.

Friday, September 8, 2017

Why Sterling's Fall Will Hurt

Why Sterling's Fall Will Hurt: The U.K. economy will perform better this year than expected. After that, the future's not so bright.
ECB Weighs Ending Stimulus as Fed Calibrates Its Easy Money Stance: The European Central Bank is likely to announce plans next month for phasing out the bond-buying program that has helped reinvigorate the eurozone economy, while the U.S. Federal Reserve is weighing how aggressively to retreat from its own easy money policies.
ECB Will Have Trouble Getting Out of Strong Euro Bind: The European Central Bank looks set to decide in October on how its bond-buying program will change in 2018. Looming over the proceedings is the surging euro.
France's Emmanuel Macron Takes EU Renewal Push to Greece: The European Union will crumble if it isn't overhauled, French President Emmanuel Macron said Thursday in Athens, attempting to reinvigorate his call for greater sharing of financial burdens in the eurozone.

Thursday, August 31, 2017

A reading for business activity

A reading for business activity across the Midwest was unchanged in August from the prior month, remaining at its lowest level since April, according to a report Thursday.
The Chicago Business Barometer, also known as the Chicago PMI, or purchasing managers index, stayed at 58.9 in August. Indexes above 50 indicate expansion while anything lower indicates contraction.
Economists surveyed by The Wall Street Journal expected the gauge to come in at 58.
"Following a sharp rise in the barometer to a more-than-three-year high in June, it isn't too surprising to see activity subsequently ease somewhat," said Shaily Mittal, an economist at MNI Indicators. "The disappointment comes from the employment indicator which once again contracted, the sixth time in the last 12 months, with fewer firms expecting an increase in hiring."
The inventories indicator fell below 50 during the month, hitting the lowest level since the start of the year, as some companies struggled to keep up with demand.
While the majority of respondents said their inventory levels were just right and around a quarter said they had too much, 16% said they had too little. This is a significant increase from the 2% who reported limited inventory when the same question was posed in November 2015.

Wednesday, August 30, 2017

Japanese yen is considered a safe-haven

The Japanese yen is considered a safe-haven asset, with the currency often showing volatility following geopolitical tensions. This has been the case this week, as the yen initially posted gains after North Korea fired a missile over Japanese territory on Tuesday, drawing sharp condemnations from Japan and the US. The easing of tensions since the missile launch has enabled the US dollar to recover and push above the symbolic 110 level. Still, if North Korea decides to fire another missile towards Japan, it’s a safe bet that the yen will gain ground.
Like other Western economies, Japan remains gripped with low inflation. This has resulted in the Bank of Japan keeping in place its ultra-accommodative monetary policy. Unlike the US and Europe, however, the BoJ has given no indications of tightening policy anytime soon, insisting that that inflation must first rise closer to its target of 2%. The economy is headed in right direction, as GDP has expanded for six consecutive quarters. In the second quarter, GDP impressed with a gain of 1.0%, well above the forecast of 0.6%. Still, with inflation nowhere near the BoJ’s target, the bank’s radical stimulus program is likely to remain in place for the foreseeable future.

Monday, August 28, 2017

Gold for December delivery hit a new intraday high

Gold for December delivery hit a new intraday high of $1,313.30 a troy ounce on the Comex division of the New York Mercantile Exchange today--its highest level since the US presidential election. "You caught a group of buys there," says Ira Epstein, a strategist at the Linn Group. "Gold is spiking because the central bankers really didn't do anything," he says. Many investors and analysts had been looking for clues about future interest rate increases from last week's Fed meeting in Jackson Hole, Wyoming. Some attribute recent dollar weakness to the lack of specifics from Yellen and ECB President Mario Draghi. A weaker dollar makes gold more affordable to foreign buyers.

Friday, August 25, 2017

USD/JPY has posted slight losses in the Friday session

USD/JPY has posted slight losses in the Friday session. In North American trade, the pair is trading at 109.26, down 0.26% on the day. On the release front, Tokyo Core CPI improved to 04%, edging above the estimate of 0.3%. In the US, durable goods reports were mixed. Core Durable Goods Orders improved to 0.5%, edging above the estimate of 0.4%. However, Durable Goods Orders declined 6.8%, weaker than the estimate of -6.0%. At the Jackson Hole meeting of central bankers, Janet Yellen has concluded her speech and the yen has responded with slight gains.
Federal Reserve Chair Yellen spoke at the Jackson Hole Symposium earlier in the day. Yellen did not take advantage of an ideal opportunity to address US monetary policy, choosing instead to discuss financial reforms, saying that measures put in place in 2007 and 2009 had been effective, adding that future reforms should remain modest. Her comments seemed aimed at a domestic audience, as her message to exercise caution comes at a time when President Trump is looking into wide-ranging reforms in the  industry. The pro-business Trump has complained that the financial sector is over-regulated and has said that he wants to ease current regulations.

Thursday, August 24, 2017

Gold is on track to outperform stocks

Gold is on track to outperform stocks for the first time since 2011, highlighting the uncertainty that has accompanied this year’s stock market gains.
While a season of strong corporate earnings has powered stocks to record highs, investors are increasingly focusing on a cluster of issues that threaten to derail those rallies.
Many are worried about coming negotiations to raise the U.S. debt ceiling, an event that has roiled markets in previous years. A failure to raise the U.S. debt limit in a “timely manner” would prompt areview of the country’s credit rating, which now stands at the highest possible level, Fitch Ratings said Wednesday.
Others are nervous over a monthslong run of uneven U.S. economic data, which some are concerned could eventually drag down corporate earnings. Recent reports have shown some metrics, such as employment, holding strong while manufacturing falters and auto demand posts steep declines.
A stock market rally that hasn’t had a significant pullback in 19 months has amplified concerns that any correction could be swift and sharp, especially with valuations for many sectors near historic highs.
The worries have boosted prices for gold, a favorite destination for nervous investors who believe the metal will hold its value better than other assets when markets turn rocky.
Gold for August delivery is up 12.1% this year to $1,288.90 a troy ounce, while the S&P has risen 9.2%. Other indicators of investor anxiety, such as the Japanese yen, Swiss franc and CBOE Volatility Index have also risen in recent weeks.

Wednesday, August 23, 2017

Gold prices edged higher Wednesday

Gold prices edged higher Wednesday, lifted by a weaker dollar.
Gold for December delivery was recently up 0.2% at $1,293.60 a troy ounce on the Comex division of the New York Mercantile Exchange.
The WSJ Dollar Index, which tracks the U.S. currency against 16 others, was recently down 0.2% to 86.07. A falling dollar tends to buoy gold, which is denominated in the U.S. currency and becomes less expensive to foreign investors when the dollar declines.
At the same time, many investors are waiting for Federal Reserve Chairwoman Janet Yellen's speech at the central bank's annual economic symposium at Jackson Hole, Wyo. on Friday, analysts at Kitco Metals said.
Signs that the central bank may be rethinking its plans for a third rate increase this year would likely lift gold, which struggles to compete with yield-bearing investments when borrowing costs rise.
In base metals, copper for September delivery was recently down 0.5% at $2.9730 a pound.

Monday, August 21, 2017

EUR/USD has edged higher in the Monday session

EUR/USD has edged higher in the Monday session. Currently the pair is trading at 1.1815, up 0.45% on the day. On the release front, it’s a very quiet start to week, so we’re unlikely to see any significant movement from the pair on Monday. There are no US releases, and the sole euro zone event is the Deutsche Bundesbank monthly bulletin. On Tuesday, Germany releases ZEW Economic Sentiment, which is expected to slow to 15.3 points.
The euro took a dip on Thursday, following a terrorist attack in Barcelona, which killed 13 and wounded dozens. EUR/USD dropped below the 1.17 line and touched 3-week lows. However, the euro has quickly recovered, and is trading at 1.18. Barring any geopolitical crises, such as another terrorist attack, we can expect a few slow days until the Jackson Hole summit on Wednesday. Both the ECB and Federal Reserve find themselves pursuing a less accommodative monetary policy, and the markets will be listening closely to Janet Yellen and Mario Draghi. Will Yellen hint at a December rate hike? Will Draghi provide clues regarding the windup of the ECB’s asset-purchases program? Any comments in this vein could be seized upon by the markets and trigger strong movement by the euro. This was the case in June, when Draghi spoke at a central bankers meeting in Portugal, and his upbeat comments about the euro zone economy sent the euro soaring.

Friday, August 18, 2017

Gold prices fall

Gold prices fall into negative territory on reports that President Donald Trump's chief strategist Steve Bannon has left the White House. Gold for December delivery was recently down 0.1% at 1,291.40 after earlier hitting its highest level since November at $1,306.90. The Barcelona terror attack and uncertainty about the Trump administration's fiscal agenda had been supporting prices. Some say the long-term backdrop for gold is still positive even after the Bannon news. "I wouldn't read too much into that," said Bill O'Neill, co-founder of LOGIC Advisors. "There's still a myriad of potential events that can happen down the line that should prove bullish for gold,"

Tuesday, June 20, 2017

Trading traps in the stock markets Supply and Demand

The next and most important point is that often times right above or below these new highs and lows are supply and demand levels which act as repellants to those new buyers or sellers.  If you look closely inside those larger time frame candles you will discover those pockets of buy and sell orders just waiting to get filled. This saying references the notion that when the market looks very good, this is usually when it blows up.  This is not limited to going long; shorts also find huge reversals to the upside just when the market looks as though it’s ready to fall off  and head down. You will see this time and again as the markets are full of traps that the unsuspecting new trader is prone to falling prey to. The cycles will be more stable on longer term charts, but knowing the cycle can assist you in your trading.  If you see price approaching a supply or demand level but the cycle is not indicating a top or bottom, the level may have a higher probability of breaking.  But if the cycle top or bottom is near, the levels are more likely to hold.

Monday, May 22, 2017

VIX Trading

The VIX is related to the S&P 500 if the 500 drops sharply the Vix futures tends to go up. Most of the time the same is true if the S&P 500 is going up the VIX futures tend to go down.  This is not always the case but more often then not this holds true. VIX futures have been offered on the CBOE Futures Exchange since 2004. Since the Chicago Board. Options Exchange (CBOE) introduced futures and, subsequently, options on its Volatility Index, or VIX. At a quoted price of $12.1, one VIX futures contract is worth $12,100. Settlement. CBOE VIX futures are cash-settled and so, unlike futures on commodities. The VIX futures are very different from other index futures in that there prices are determined by a cost of carry but rather the market anticipation of the thirty day overall implied volatility of the SPX options will be at the VIX futures expiration. Many time traders will see the VIX futures trading above the VIX index other times it will be below.
 
  This can be an indication of the market's fear or complacency about the overall market action in the months ahead. Traders need to be aware if they trade the VIX futures that it does not always move in the same direction as the VIX index. Yhe VIX fitures will move close to the S&P 500 futures cash index. VIX is traded on the CBOE futures exchange and one point is worth one thousand dollars and the mini tick is worth .05 or fifty dollars. Vix futures are related to the S&P 500 because of the vix index itself is based on the SPX option prices.

  They are also used to value options on the vix index even though those are cash settled. The VIX futures and VIX are settled on the same day. The Wednesday that is thirty days prior to the third Friday of the calendar month. One thing is for sure a trader needs to learn how to trade this type of index or he will quickly wipe out their trading account. At most brokerages you have to apply to trade this type of index. This type of futures trading is very speculative and is not for all investors. Traders need to learn how to do this type of trading

Wednesday, March 15, 2017

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Friday, January 6, 2017

USD/JPY has posted slight gains on Friday

USD/JPY has posted slight gains on Friday, as the pair trades at the 116 line. On the economic front, there are no Japanese releases to wrap up the week. In the US, the spotlight is on employment numbers, with three key events – Nonfarm Payrolls, Average Hourly Earnings and Unemployment Rate. Traders should be prepared for possible volatility in the currency markets in the North American session.•USD/JPY posted gains in the Asian session. In European trade, the pair posted gains but has retracted
•115.88 is a weak support
•116.88 is  the next resistance line
•Current range: 115.88 to 116.88
Further levels in both directions:
•Below: 115.88, 114.83 and 113.80
• Above: 116.88, 118.05, 118.85 and 119.83
USD/JPY ratio is unchanged in the Friday session. Currently, short positions have a majority (54%), indicative of slight trader bias towards USD/JPY continuing to move to lower ground.

Thursday, January 5, 2017

Canadian dollar has paused on Thursday

The Canadian dollar has paused on Thursday, following sharp gains in the Wednesday session. Early in North American trade, USD/CAD is trading at the 1.33 line. It’s a busy day on the release front. Canadian RMPI, which measures inflation in the manufacturing sector, came in at -1.5%, better than the forecast of -2.0%. In the US, ADP Nonfarm Employment Change disappointed with a reading of 153 thousand, well off the forecast of 171 thousand. There was better news from unemployment claims, which dropped to a 7-week low at 235 thousand. Later in the day, the US releases ISM Non-Manufacturing PMI. Employment numbers will be in the spotlight on Friday, led by US Nonfarm Payrolls and Canadian Employment Change.
The US dollar retreated ahead of the Federal Reserve minutes on Wednesday and the Canadian currency took full advantage, gaining close to one percent. USD/CAD has dropped to a low of 1.3254 on Thursday, its lowest level since December 14. The Canadian dollar slumped in the last two weeks of 2016, but has rebounded. With Canada and the US releasing key employment numbers on Friday, we could see some volatility from USD/CAD.

Wednesday, January 4, 2017

Trading the professional way

Trading the professional way really involves common sense.  We should buy stock on sale and sell it when it becomes expensive, not the other way around
When you trade you must fire on all cylinders; you must access and activate your resources, strengths and mental weapons in the psychological warfare which is trading.  The trading trenches are not a place to vacillate and equivocate; you must be willing to demonstrate your ability to focus on what matters most in the trade.  You must be willing to plan your trade and trade your plan with complete follow-through of all of your rules.

Monday, January 2, 2017

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USD/JPY has recorded gains on Friday

USD/JPY has recorded gains on Friday, erasing the losses which marked the Thursday session. Currently, USD/JPY is trading at the 117 line. There are no Japanese releases on the schedule. In the US, the sole event is Chicago PMI, with the markets expecting the indicator to dip to 56.5 points.
The yen moved higher on Thursday, courtesy of an optimistic report from the Bank of Japan. The bank’s Summary of Opinion, which was modestly upbeat, comes on the heels of last week’s rate statement, where the BoJ held rates at -0.10%. The summary noted that the economy is showing “moderate recovery”, boosted by stronger exports and steady consumer consumption. The report gave a thumbs up to the economy, stating that growth was expected to remain strong. Despite the optimistic tone of the BoJ, this week’s key consumer indicators pointed to persistent weakness in inflation and spending. Household Spending declined 1.5%, marking a ninth straight decline. The markets had predicted a small gain of 0.2%. The Japanese economy continues to grapple with deflation, as underscored by Tokyo Core CPI. The key indicator came in at -0.6%, weaker than the estimate of -0.4%. The BoJ continues to cling to its inflation target of 2.0%, but this goal is unlikely to be realized anytime soon. At the same time, the Japanese yen is down sharply, losing 11% since November 1. If the US economy continues to heat up in 2017, we could see the Fed step in with further rate hikes, which would likely push the yen to lower levels.