Moving....but change is good.

To all GregMikeFX followers.....

As there is fluidity in the markets, so there is a fluidity in what I am doing and how to get there.  

I was recently approached by the good people at www.forexlive.com to join their team as they look to expand and broaden their horizons. The opportunity is filled with the ability to have the GregMikeFX "voice" be heard to an even broader audience, I feel I fill some crevices there and I also feel that they provide a great and trustworthy service to the forex community. I am excited.  

So I welcome you to focus your attention to that site where you will find what you found here and even more.  You will be better served.

Let me end by thanking you for all your support but look forward to having that continue at ForexLive!

Peace,

Greg

USDCAD does a full lap in trading today...

The USDCAD marched to it's own drum on Wednesday - falling and falling and falling.  Today, the GDP came out better than expectations, the USDCAD moved lower, bottoming against the 50% retracement, then started to move higher - slowly at first, then with added momentum.  The move has taken the price back to the 100 hour MA (blue line in the chart below) at the 1.08605.  

It is these types of days, that swear you off a currency pair.  I have no problem with a move down to a technical level like the 50% retracement followed by some profit taking. It is another thing to then rip higher - reversing  what was a nice trend extension lower. The pair even moved further away from the 100 and 200 day MAs in the process (blue and green lines).  

How can you protect yourself?

For me, when I see a trend like move, like we did in the USDCAD, a bounce off a key tech level  - like the 50% retracement on the daily chart above -  I will then measure the Fibonacci Retracement  of the break /trend move lower. If the price can stay below the 38.2-50% of that move (see chart below) it says to me the sellers (in this case) are remaining in control. If the price can not stay below the 50%, get out or be prepared to get out. The sellers are not proving to me that they can keep in control.  

So today, when the price moved above the 1.0826-319 area, that should be enough to get out or at the least think about getting out.  Even when the fundamentals point in a direction, you get the move and your confident in the position, there still needs to be a level that says to you "it should not go back above this level"  The 50% is that level for me after a trend like move.

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All information on this site is provided for informational and educational purposes only. Information provided is not to be misconstrued as trading advice. Past results are not indicative of future results. In addition trading in foreign exchange markets on margin carries a high level of risk, and may not be suitable for all individuals.

EURUSD extends to new lows

The EURUSD has been able to move away from the 100 hour MA (see earlier post CLICK HERE) and extend to new week lows. Better Chicago and Michigan PMI data along with increased risk from geopolitics (i.e., Russia/Ukraine) has the the dollar moving higher/the EUR on the defensive. The lows from yesterday and earlier today comes in at 1.3159 and this will now be eyed as RISK for traders in the short term.  

On a break you want to see the sellers keep control and the buyers remain nervous. A move back above the 1.3159 area would likely give the buyers a reason to breathe easier before the weekend (risk is increased going into a weekend), and would show that sellers are not that interested either. Overall however, I think the risk remains to the downside given the inability to trade above the 1.3219 level today (nor get close to the 1.3247 level - see prior post).  The 1.3104 and then 1.30168 are the next major targets. 

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All information on this site is provided for informational and educational purposes only. Information provided is not to be misconstrued as trading advice. Past results are not indicative of future results. In addition trading in foreign exchange markets on margin carries a high level of risk, and may not be suitable for all individuals.

GBPUSD tried but failed above. Back to MA support (again)

It took all week but the price of the GBPUSD was able to extend above the 1.6600 level and even have an hourly bar that closed above the level.  That brief bullish moment, however, has found sellers against the 38.2% next target at the 1.66119 level. Nice try but no cigar.  The price decline has moved back toward the 200 hour MA and 100 hour MA. Needless to say frustration prevails but I guess I can not be too surprised.  We are on the verge of a 3 day weekend, a new month and the end of summer. With the ECB and BOE meetings next week (the BOE is not expected to announce or do anything), and US employment reports due next week, the fireworks will likely be saved for that time.

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All information on this site is provided for informational and educational purposes only. Information provided is not to be misconstrued as trading advice. Past results are not indicative of future results. In addition trading in foreign exchange markets on margin carries a high level of risk, and may not be suitable for all individuals.

UK wants to increase sanctions....

They are being said to be pushing the EU to block Russia from SWIFT bank network. 

SWIFT which stands for Society for Worldwide Interbank Financial Telecommunications is a global payment network used for global payments. If enacted it would be painful.  I don't know if the EU would go so far though.  It is a game of chicken that goes on with sanctions.  This might be a card that gets played later on.

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All information on this site is provided for informational and educational purposes only. Information provided is not to be misconstrued as trading advice. Past results are not indicative of future results. In addition trading in foreign exchange markets on margin carries a high level of risk, and may not be suitable for all individuals.

EURUSD hanging out at the 100 hour MA and happy there.

The EURUSD has been in at 68 pip trading range for the week with a high at the 1.3219 (which was the low from last Friday too) and the low at 1.3152 (reached on Wednesday). In between is the 100 hour MA (blue line in the chart below) at the 1.3185.  The last 4 hours has seen the price trader above and below the 100 hour MA level.  WIth the US Labor Day holiday quickly approaching and only the Chicago PMI and Michigan Confidence in the way of the final summer weekend, traders seem intent on parking the price there and seeing what happens next week.

Needless to say the pair - after the gap lower on Monday - has had a difficult time of it. The price remains below the 38.2% of the move up from the JULY 2012 low to the MAY 2015 high. That level comes in at 1.3147 and will remain a resistance level to stay below for traders who are short. On the downside, There was one look below bottom trend line resistance on Wednesday. Since then, the old trend line has been finding support buying interest.  

So we sit.   So we wait.

Looking at the daily chart below, the picture remains a same for it (not surprisingly). The next target on the downside – should the price remain below the 1.32471 level – would be the September low at 1.3104.  Below that is the 50% retracement of the move up from the July 2012 low to the May high. That level comes in at 1.30168  I think most traders (and perhaps central bankers) would not mind a move toward that level and then a re-evaluation.   We will need to get out this rut though....

FOOTNOTE: JPM cut the Q1 EURUSD estimate to 1.2800 from 1.3000

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All information on this site is provided for informational and educational purposes only. Information provided is not to be misconstrued as trading advice. Past results are not indicative of future results. In addition trading in foreign exchange markets on margin carries a high level of risk, and may not be suitable for all individuals.

Canada GDP for the 2Q is better at 3.1%

This is better than the 2.7% expectations. However, the prior quarter was revised to 0.9% from 1.2%..

For the month of June, the GDP was reported at 0.3% vs. 0.2% expectation. In the year on year measure rose by 3.1% vs. 3% expectations.

There has been little reaction to the release.  it seems like the market is already out holiday.

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All information on this site is provided for informational and educational purposes only. Information provided is not to be misconstrued as trading advice. Past results are not indicative of future results. In addition trading in foreign exchange markets on margin carries a high level of risk, and may not be suitable for all individuals.

Personal Income rises by +0.2% but Spending falls by -0.1%

The Personal Income and Spending data came in weaker than expectations of +0.3% and +0.2% respectively.  PCE Core YoY came in as expected at 1.5%.

There is a little reaction to the news.

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All information on this site is provided for informational and educational purposes only. Information provided is not to be misconstrued as trading advice. Past results are not indicative of future results. In addition trading in foreign exchange markets on margin carries a high level of risk, and may not be suitable for all individuals.

USDCAD awaits GDP.

The USDCAD has been trading in a confined range since tumbling on Wednesday. Canada GDP will be released at 8:30 AM ET with expectations for the 2nd quarter annualized rate of 2.7% vs. 1.2% 1st quarter. The monthly GDP for June is also expected to be released with expectations of +0.2%

Looking at the hourly chart, there is topside trendline resistance at the 1.0860 level. This level also corresponds with the 100 day moving average (currently at 1.08604). On a weaker number, I would expect a move above this level with the next targets being the 1.0886-92 area  This is where the 200 day moving average is at today, and the 38.2% retracement of the move down from the week's high to the week's low.  Above that the 100 hour moving average (blue line in the chart above) comes in at 1.09067 currently,and the 50% retracement of the same move to the downside this week is at 1.09119.

A move lower on a stronger number will be extending the price further away from the all-important 100 day moving average and would open the door for further declines. The low for the week from Wednesday's trade came in at 1.08274.   A move below that level within target. The 50% retracement of the move up from the July 2014 low to the high reached this month. That level comes in at 1.0808. Below that traders will focus on the 61.8% retracement of the same move to the upside at 1.07635.

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All information on this site is provided for informational and educational purposes only. Information provided is not to be misconstrued as trading advice. Past results are not indicative of future results. In addition trading in foreign exchange markets on margin carries a high level of risk, and may not be suitable for all individuals.

A review of the Economic releases and major events

Quick overview of economic activity and events

  • Japan jobless rate rose to 3.8% from 3.7%. The job applicant ratio stayed steady at 1.10
  • Japan National CPI, Year on year declined to 3.4% from 3.6%. This was as expected.  Ex-food and energy rose by 2.3%. Also as expected. 
  • Japan Retail Sales for the month of July fell by -.5% vs. an estimate of +0.3%. The prior month was revised higher to 0.5% from 0.4%.
  • Japan Large Retailers Sales fell by -0.6% vs. -0.8% expectations.
  • Japan Industrial Production for the month of July came in at 0.2% vs. 1.0% expectations.
  • Japan Housing Starts YoY fell by -14.1%. This was worse than expectations of a -10.5% rate

The weaker overall data added Japan has led to a weaker yen in trading today.

In European economic news today:

  • German Retail Sales fell by -1.4% in the month of July. This is much worse than the expectations of +.1%. The prior month was also revised lower to 1% from 1.3%
  • UK Nationwide Home Price Index rose by 0.8% vs. +0.1% expectations. The year on year increase by 11% vs. 10.2%
  • Swiss KOF Economic Barometer rose to 99.5 from 97.9 last month. Although up on the month, the index had a peak over the last 12 months of 107.95. The low was the level from last month at 97.9. The EURCHF remains steady at 1.2060 area - not too far from the 1.2000 SNB intervention level. 
  • Italy's Unemployment Rate rose unexpectedly to 12.6% from 12.3%. Also in Italy, the Harmonized CPI, fell by -0.2% vs. my 0.1% estimate. GDP in the 2nd quarter also fell by -0.2% as per expectations
  • EU Flash CPI Estimate came in at 0.3% YoY.  This is down from 0.4% in the prior month. The core estimate rose by 0.9%, which was a touch better than the 0.8% expectations.
  • There was a report from Spanish Deputy Prime Minister, that Spain was expected to increase their growth forecasts in September
  • Russian Pres. Putin was apparently said more Ukraine troops had entered Russia than vice versa. He also commented that it is easy for troops to get lost on the Ukraine border.

Economic Data due for release in North America:

  • Canada GDP for the 2nd quarter annualized is expected to show a 2.7% increase. This is better than the 1.2% from the 1st quarter. The month on month change for June is expected to show a 0.2% gain. And the June YoY is estimated to rise by 3%.
  • Canada Industrial Product Price is expected to fall by -.2% in July vs. -0.1% in June.
  • Canada Raw Material Price Index for the month of July is expect to tumble by -1.8%.  In June it rose by 1.1%
  • US, Personal Income is expected to rise by 0.3% for the month of July vs. 0.4% last month.
  • US Personal spending in the US is expected to rise by 0.2% vs. 0.4% last month.
  • US PCE Deflator for the year is expected to rise by 1.6%, unchanged from the previous month. The core PCE is estimated to increase by 1.5%. This is also unchanged from the previous month
  • US Chicago Purchasing Managers Index is expected come in at 56.5 vs. 52.6
  • University of Michigan confidence (final) is expected to rise to 80.0 from 79.2.

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All information on this site is provided for informational and educational purposes only. Information provided is not to be misconstrued as trading advice. Past results are not indicative of future results. In addition trading in foreign exchange markets on margin carries a high level of risk, and may not be suitable for all individuals.