Tag Archives: trading

Watch China, Milk for Kiwi Cues

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Watch China, Milk for Kiwi CuesWatch China, Milk for Kiwi Cues

Fundamental Forecast for the Kiwi: Bearish

The New Zealand Dollar continues to display a tight relationship with the bigger overall macro-theme of China and the larger overall threat of an Asian slowdown. Since China began their most recent descent on the heels of the December rate hike out of the Federal Reserve, the Kiwi hasn’t held up well at all. Eleven of the past twelve days have seen the Kiwi trade lower against the greenback (for a total move of -6.3%), and if we match it up with the Yen, it’s even worse – with the same 11 of 12 tally but an even larger move lower; with a full -8.45% lost against the Yen over that 12-day sequence. read more

Gold Down But Not Out as Risk Sell-off Persists- 1072 Support

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Gold Down But Not Out as Risk Sell-off Persists- 1072 SupportGold Down But Not Out as Risk Sell-off Persists- 1072 Support

Fundamental Forecast for Gold: Bullish

Gold prices retreated this week with the precious metal off by more than 1% to trade at 1090 ahead of the New York close on Friday. The pullback comes amid extreme volatility in broader risk assets with the major U.S. equity indices down nearly 9% since the start of 2016. Indeed gold seems to have regained its haven status in the near-term as traders seek shelter from the ongoing market turmoil and although prices were lower this week, bullion is still 2.74% in the black for 2016. read more

US Dollar Traders on High Alert Amid GDP, FOMC, Market Volatility

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US Dollar Traders on High Alert Amid GDP, FOMC, Market VolatilityUS Dollar Traders on High Alert Amid GDP, FOMC, Market Volatility

Fundamental Forecast for Dollar:Bullish

  • Through trading at a 12-year high, the USDollar Index has struggled to make meaningful progress
  • While uncertain risk trends remain ahead, a horde of event risk ahead is anchored by a FOMC decision and US GDP
  • See our 1Q 2016 forecast for the US Dollar in our Trading Guides page.

Technically, the Greenback (USDollar specifically) has advanced for fourth consecutive weeks through Friday’s close. That’s an impressive run especially considering it is marking serial, 12-year high closes. That said, the run is virtually devoid of conviction – which is momentum from a price perspective. The lift the currency has found to its present lofty level was founded mainly through monetary policy, and the premium it afforded has been largely absorbed. Yet, that doesn’t necessarily mark the end of the bulls’ control. A divergent rate bearing will be revived with a range of rate decisions led by the Fed’s meeting. What’s more, the stronger the push of all those catalysts tracing back to risk trends; the closer the market comes to unleashing the Dollar’s haven appeal. read more

British Pound Shows Signs of Life – Can it Continue Higher?

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British Pound Shows Signs of Life – Can it Continue Higher?British Pound Shows Signs of Life – Can it Continue Higher?

Fundamental Forecast for British Pound: Bearish

The British Pound finally showed signs of life as it recovered from multi-year lows to finish the week higher versus the Euro and the US Dollar. It was the first week in four in which the GBP rallied versus the Greenback and the first time in eight it gained versus the Euro. What are the odds it will recover further off of recent lows? read more

Gold Boosted by Softer Fed Stance- Resistance at 1130

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Gold Boosted by Softer Fed Stance- Resistance at 1130

Gold Boosted by Softer Fed Stance- Resistance at 1130

Fundamental Forecast for Gold:Neutral

Gold prices are higher this week with the precious metal rallying nearly 1.8% to trade at 1117 ahead of the New York close on Friday. The move comes amid continued volatility in broader risk markets with the FOMC rate decision fueling speculation that the central bank will likely have to delay subsequent rate hikes. Although the dollar was weaker for the majority of the session, a late-week rally took the Dow Jones FXCM U.S. Dollar Index (Ticker: USDOLLAR) to fresh highs. Ongoing technical divergence however continues to suggest the greenback remains vulnerable- with bullion standing to gain from dollar softness. read more

BoJ Makes Stealth Move to Negative Rates, Pressure on to China

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BoJ Makes Stealth Move to Negative Rates, Pressure on to ChinaBoJ Makes Stealth Move to Negative Rates, Pressure on to China

Fundamental Forecast for Yen:Neutral

Confidence is a pretty important thing in a financial system. After all, in a fiat-based monetary system, all that we really have is faith. There’s no gold or silver backing the currency, and while I’m not saying that’s a ‘good’ thing since pretty much all of those regimes have failed, faith is of utter importance because, should trust wane investors may just sell out of your currency at an uncontrollable pace. This could lead to significant currency weakness as investors flock to anywhere but your currency, and all of those goods that you have to import all of the sudden begin to get very, very expensive. This is one of the reasons that negative rate-regimes have been avoided for so long: It could be potentially playing with fire (the inflationary kind). And this inflation isn’t of the ‘healthy’ variety. Just ask Russia. This even began to show signs in Canada earlier this week with reports of the Great Cauliflower Crisis; where four simple heads of Cauliflower could buy a full barrel of Oil. But this isn’t about cauliflower; we’re talking about history here. read more

CAD Rally Stalls After Reversing Longest Losing Streak Since 1971

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CAD Rally Stalls After Reversing Longest Losing Streak Since 1971CAD Rally Stalls After Reversing Longest Losing Streak Since 1971

Fundamental Forecast for CAD: Bearish

Steven Poloz’s refrain of a Bank of Canada rate cut that had become the preferred bet as the Loonie dropped brought a magnificent reversal for the CAD. However, toward the end of the week, the CAD rally stalled and CAD-crosses looked to oil for direction. For a majority of the week, a ‘Dash for Trash’ in Oil assets seemed sustainable as news of a coordinated global oil production cut appeared in the making. However, on Thursday, the news became obvious that such a plan was unlikely to develop, and the elusiveness of such a plan made Oil and, therefore, CAD unable to hold gains. One oil trader, Gerrit Zambo of BayernLB stated, “Don’t think there are many experienced people that really think Russia or Saudi Arabia would considerably cut production as long as they have the possibility to sell into the market,” read more

GBP/USD to Rebound to Succumb to Dovish BoE, Upbeat NFP Report

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GBP/USD to Rebound to Succumb to Dovish BoE, Upbeat NFP ReportGBP/USD to Rebound to Succumb to Dovish BoE, Upbeat NFP Report

Fundamental Forecast for British Pound: Neutral

The Bank of England (BoE) interest rate decision is likely to heavily impact the British Pound next week with the central bank schedule to release its updated forecasts, and the near-term rebound in GBP/USD may continue to unravel should the Monetary Policy Committee (MPC) show a greater willingness to further delay the normalization cycle. read more