Press review - page 439

[Sergey Golubev]

Fundamental Q4'16 Forecasts for Brent Crude Oil (based on the article)

Brent Crude Oil - "Crude oil price has reacted cleanly to the 200 day simple moving average for the past year and a half offering 5 touches of price support and resistance. Therefore, a move below the common trend indicator would be worrisome to the H&S pattern traders. A break below would open the door to more bearish potential towards $40 and then possibly $35."

[Sergey Golubev]

AUD/USD Intra-Day Fundamentals: RBA Cash Rate and 15 pips price movement

2016-10-04 03:30 GMT | [AUD - Cash Rate]

• past data is 1.50%
• forecast data is 1.50%
• actual data is 1.50% according to the latest press release

if actual > forecast (or previous one) = good for currency (for AUD in our case)

[AUD - Cash Rate] = Interest rate charged on overnight loans between financial intermediaries.

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From Australian Broker article:

• "The Reserve Bank of Australia (RBA) has made it two consecutive months of inaction for Australia’s official cash rate."
• "In what was a widely predicted outcome, today’s RBA board meeting ended with the cash rate remaining at 1.5%, the same outcome that occurred after September’s board meeting."
  

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AUD/USD M5: 15 pips range price movement by RBA Cash Rate news event

[Sergey Golubev]

GBP/USD Intra-Day Fundamentals: U.K. Construction PMI and 22 pips price movement

2016-10-04 08:30 GMT | [GBP - Construction PMI]

• past data is 49.2
• forecast data is 49.1
• actual data is 52.3 according to the latest press release

if actual > forecast (or previous one) = good for currency (for GBP in our case)

[GBP - Construction PMI] = Level of a diffusion index based on surveyed purchasing managers in the construction industry.

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GBPD/USD M5: 22 pips range price movement by U.K. Construction PMI news event

[Sergey Golubev]

Crude Oil Price Forecast: Oil Bulls Can Almost Taste 3-Month Highs (based on the article)

Daily price is on bullish masrket condition for 51.10 resistance level to be tested for the bullish trend to be continuing.

• "Oil Bulls continue to be rewarded by an OPEC Accord to curb production as the price of spot WTI trades at the highest levels since July. While the recent rise has been impressive following the post-Brexit announcement move down to $39.17, what is more impressive is the potential longer-term chart set-up for a Bull Run to the upside."
• "There is still cause for concern by some who think a USD Bull Market is in the making once the Fed decides to raise short-term interest rates or due to weakness elsewhere. Such a strengthening of the US Dollar could naturally put pressure on the price of Oil. However, if the USD fails to mature into an uptrend, we could be setting up for a favorable environment for further upside in the price of Crude Oil."
  
• "Another development in institutional positioning is the largest increase in long positions in WTI since January. This bullish positioning is an aggressive reversal from the bearish sentiment that had not been seen since September 2015 in recent CoT readings. The bullish sentiment comes in the forms of straight long positions via futures as well as options contracts that increased 8.1%. Such bullish exposure could see the market favor further."
  

If the price breaks 51.10 resistance level to above on daily close bar so the primary bullish trend will be continuing.
If the price breaks 45.70 support level to below on close bar so the local downtrend as the secondary correction within the primary bullish trend will be started.
If the price breaks 43.44 support level so we may see the reversal of the daily price movement to the primary bearish market condition.

[Sergey Golubev]

Forum on trading, automated trading systems and testing trading strategies

Indicators: Renko_v1

Sergey Golubev, 2013.10.16 08:04

How to Use Renko Bricks and Moving Averages to Find Trades

Talking Points

• Renko bars help filter the noise
• Renko bars reveal clearer entries and exits
• Moving Averages can be used with Renko bars with some minor setting changes to pinpoint entries

Seeing the trend without Forex market noise is the goal of every trader. Too many times, traders get head-faked by the twists and turns of price action.

In addition moving averages can be used to signal entries and exits as well. A couple of settings have to be changed in order to get the moving averages which are usually tied to time, to work with a chart system that is based on price.

To add a 13-period exponential moving average to the Renko chart, choose EMA from the Add Indicator menu then change “Number of periods” to 13.

Notice the chart above which displays both Renko bars and a 13-period exponential moving average. A simple system can be built around the Renko bars and the moving average. When Renko price bars cross below the moving average and turns red, traders can enter short and stay with the trend until the Renko bars cross back above the moving average.

An initial stop could be placed just above the last blue Renko brick. Keep in mind that in the above example, each brick is equal to five pips. In the above example, the red circles mark where the Renko bars crossed below the moving average. A trader can see that a number of pips could have been gathered as the bars stayed below the moving average.

On the other hand, when the Renko bars change color and cross above the moving average, traders can enter long placing stop just below the last red Renko brick. The above chart shows in the green circles, points were the Renko price bars moved above the moving average generating a clear buy signal.

Renko charts, without the dimension of time, may take a little getting a little used to. But once you get the hang of them, you may find it difficult to go back to the candles. Adding a moving average gives excellent signals for entry and exit. Marrying them up with other indicators can magnify the benefits of trading without noise and scary wicks!

[Sergey Golubev]

Forum on trading, automated trading systems and testing trading strategies

Expert Advisors: Renko Line Break vs RSI EA

Sergey Golubev, 2014.03.28 07:39

The 3 Step EMA and Renko Strategy for Trading Trends (based on dailyfx article)

• Many Forex traders use weighted moving averages, called EMA’s, to trade currency pairs that are trending.
• Determine the direction of the dominant trend direction with a 200 period EMA.
• Use price crossing a 13 period MA as both an entry trigger and manual trailing stop

Developed in the 18th century in Japan to trade rice, Renko charting is a trend following technique. It is excellent for filtering out price “noise” so traders can catch a major part a given Forex trend. It was believed that the name “Renko” originated from the Japanese word ‘renga’ meaning ‘brick’.
Similar to Kagi and Point and Figure charting, Renko ignores the element of time used on candlesticks, bar charts, and line charts. Instead, Renko focuses on sustained price movement of a preset amount of pips.

For example, a trader can set the bricks for as little as 5 pips or as many as 100 or more. A new brick will not be formed until price has moved 100 pips. It could take 24 hours for a new brick to form or it could take just a few hours. However, no bricks will form until the preset limit is achieved.

Find the Trend Direction

Renko charts can incorporate many of the usual technical indicators like stochastics, MACD, and moving averages. Today’s strategy will marry up Forex Renko charts with a 200 Exponential Moving Average (EMA) to find trend direction. Very simply, if price is trading above its 200 EMA, then the trend is up. If price is trading below its 200 EMA, then the trend is down.

This filter will give us a directional bias much like a compass or GPS. We will look to only take long trades when the Renko bricks are trending above the 200 EMA. On the other hand, in a downtrend, if the Renko bricks are trending below the 200 EMA, then the trend down. Forex traders will only look to short the market. One of the biggest mistakes swing traders make is entering trades that go counter to the dominant trend.

When to Get In

After the dominant trend direction is determined, traders can use the simplicity of Renko charts with a single 13 period EMA as a ‘trigger’ to signal an entry in the direction of the major trend. First, wait for at least two green bricks to appear above the 13 EMA. Then enter long on the appearance of the second green brick above the 13 EMA.

Exiting for Profit and for Loss

Once a trader is “triggered” into the trade, a protective stop can be set one-brick size below the 13 EMA. As long as the bricks remain above the 13 EMA, we look to stay with the trend. Just as the 13 EMA can get you in a new trade, the same EMA can be used to stop out a winning trade locking in profits.

Traders will need to manually move the stop one brick-size below 13 EMA and the current price brick. You can see in the example above how the combination of Renko and the 13 EMA helps traders stay with the trend a longer time.

[Sergey Golubev]

Trading News Events: U.S. ISM Non-Manufacturing (adapted from the article)

• "A rebound in the U.S ISM Non-Manufacturing survey may fuel the near-term strength in the greenback and spark a selloff in EUR/USD should the report boost expectations for a 2016 Fed rate-hike."
• "It seems as the Federal Open Market Committee (FOMC) is taking a similar path to 2015 as a growing number of officials endorse higher borrowing-costs, and the central bank may continue to take a more collective approach to prepare U.S. households and businesses for a December rate-hike as ‘the Committee judges that the case for an increase in the federal funds rate has strengthened.’ However, market participants may pay increased attention to the 2017-rotation as the three dissenting members from the September interest-rate decision (Esther George, Loretta Mester, and Eric Rosengren) give up their votes, and the decline in the long-run forecast for the federal funds rate may become a key theme in the year ahead as Chair Janet Yellen continues to endorse a ‘gradual’ path in normalizing monetary policy."

Daily price is on bullish ranging above 200-day SMA (200 SMA) and 100-day SMA (100 SMA) for the primary bullish trend to be resumed or for the bearish reversal to be started.

• If D1 price breaks 1.1278 resistance level to above on close daily bar so the primary bullish market condition will be ressumed.
  
• If price breaks 1.1137 support to below on close daily bar so the reversal of ther daily price movement from the ranging bulliush to the primary bearish market condition will be started.
  
• If not so the price will be on bullish ranging within the levels.

(all images/charts were made using Metatrader 5 software and free indicators from MQL5 CodeBase)

[Sergey Golubev]

Intra-Day Fundamentals - EUR/USD and USD/CAD: U.S. ISM Non-Manufacturing PMI

2016-10-05 13:45 GMT | [USD - ISM Non-Manufacturing PMI]

• past data is 51.4
• forecast data is 53.1
• actual data is 57.1 according to the latest press release

if actual > forecast (or previous one) = good for currency (for USD in our case)

[USD - ISM Non-Manufacturing PMI] = Level of a diffusion index based on surveyed purchasing managers, excluding the manufacturing industry.

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The report was issued today by Anthony Nieves, CPSM, C.P.M., CFPM, chair of the Institute for Supply Management^® (ISM^®) Non-Manufacturing Business Survey Committee. "The NMI^® registered 57.1 percent in September, 5.7 percentage points higher than the August reading of 51.4 percent. This represents continued growth in the non-manufacturing sector at a faster rate. The Non-Manufacturing Business Activity Index increased substantially to 60.3 percent, 8.5 percentage points higher than the August reading of 51.8 percent, reflecting growth for the 86th consecutive month, at a noticeably faster rate in September. The New Orders Index registered 60 percent, 8.6 percentage points higher than the reading of 51.4 percent in August. The Employment Index increased 6.5 percentage points in September to 57.2 percent from the August reading of 50.7 percent. The Prices Index increased 2.2 percentage points from the August reading of 51.8 percent to 54 percent, indicating prices increased in September for the sixth consecutive month. According to the NMI^®, 14 non-manufacturing industries reported growth in September. The comments from the respondents are mostly positive about business conditions and the overall economy. A degree of uncertainty does exist due to geopolitical conditions coupled with the upcoming U.S. presidential election."

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EUR/USD M5: 27 pips price movement by ISM Non-Manufacturing PMI news events

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USD/CAD M5: 43 pips range price movement by ISM Non-Manufacturing PMI news events

[Sergey Golubev]

AUD/USD Intra-Day Fundamentals: Australian Trade Balance and 7 pips price movement

2016-10-06 00:30 GMT | [AUD - Trade Balance]

• past data is -2.12B
• forecast data is -2.32B
• actual data is -2.01B according to the latest press release

if actual > forecast (or previous one) = good for currency (for AUD in our case)

[AUD - Trade Balance] = Difference in value between imported and exported goods and services during the reported month.

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AUD/USD M5: 7 pips price movement by Australian Trade Balance news event

[Sergey Golubev]

Technical Targets for EUR/USD by United Overseas Bank (based on the article)

H4 price is on bearish breakdown located below 100 SMA/200 SMA area. The price is breaking 1.1183 support level to below for the primary bearish trend to be continuing.

Daily price. United Overseas Bank is expecting for this pair the ranging trend to be continuing:

"EUR spent another day going nowhere and at this stage, there is no pre-indication that the current neutral phase is about to end soon. In other words, the expected sideway trading range of 1.1120/1.1290 that was first highlighted about 2 weeks ago is still intact."

• If daily price breaks 1.1278 resistance level on close bar so the bullish trend will be resumed.
  
• If daily price breaks 1.1122 support level on close bar so the reversal of the price movement from the ranging bullish to the primary bearish market condition will be started.
• If not so the price will be on ranging within the levels.