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2013-03-04 08:00 GMT (or 09:00 MQ MT5 time) | [EUR - Spanish Unemployment Change]
if actual < forecast = good for currency (for EUR in our case)
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Spanish Unemployment Falls In February
Spain's unemployment decreased in February from the prior month, data from labor ministry showed Tuesday. Unemployment declined by 1,949 in February, which was the first decline for February since 2007.
In seasonally adjusted terms, unemployment decreased by 55,353, which was the largest decline in the historical series, the ministry said. Youth unemployment fell by 51,159 or 10.7 percent over the last twelve months in February.
2013-03-04 09:30 GMT (or 10:30 MQ MT5 time) | [GBP - Construction PMI]
if actual > forecast = good for currency (for GBP in our case)
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U.K. Construction Growth Moderates In February
The British construction sector expanded notably in February, but the pace of expansion eased since January as adverse weather conditions disrupted activity, survey data from Markit Economics showed Tuesday.
The construction Purchasing Managers' Index fell less than expected to 62.6 in February from a 77-month high of 64.6 in January. The score was forecast to drop to 63.5.
The index has posted above the 50.0 no-change level in each month since May 2013.
- Traders should look to focus their strategies in appropriate market conditions.
- Multiple time frame analysis can offer a ‘bigger-picture’ view of a market.
- Traders can choose to trade trends, ranges, or breakouts based on their analysis.
Trends show a bias that has been displayed in the market place; and when a strong trend is available, the trader’s job is simple: To trade in the direction of that trend. If the trend is up, the trader should look to buy; and if the trend is down, the trader should look to sell.Unfortunately trends don’t always exist; and when that often entails congested, range-bound price movements as bulls and bears both fight to take over control of the market in search of the next trend. These range-bound environs can be more dangerous, and given the limited upside that might be available, many traders will often eschew trading the range; instead waiting for the inevitable breakout that may end the range and lead into a new trend.
The Benefit of Multiple Time Frames
The value of being able to get a ‘bigger picture’ view on a market cannot be understated. To think of the value of multiple time frame analysis, think of trading in a currency pair like buying a home.
If you’re going to buy a home, you’re likely going to want more of an overview than simply driving by and getting a quick glance. This is like trading a currency pair when only seeing one time frame.
When buying a home, you’ll likely want to get out of the car and walk around to ensure that the back yard isn’t in complete disarray. You want to check the foundation to make sure that you’re not going to have exorbitant repair expenses in your future. You want to get as much information as is feasibly possible to make the most intelligent purchasing decision that you can.
Trading in a market isn’t all that different, the more information you have the more of an informed decision that you can make.
Multiple Time Frame Intervals for Trend Diagnoses/Entry
And if the four-hour time frame is being used to enter positions, the daily chart can be used to gauge the trend (or lack thereof); so that the trader can ensure they are focusing the optimal approach on the prevailing market condition.
Or perhaps a longer-term trader wants to use the daily chart to enter trades. Well, then the weekly chart can be used as the longer time frame to guide the trader’s decision-making processes.
The benefit of using a longer time frame in the decision as to which strategy to utilize is that the trader can take more information into account, getting an idea of the ‘bigger picture’ before executing on their strategies.
Gauging Trend Strength (or lack thereof)
Once a trader has determined the time frame with which they want to look to grade the prevailing trend, focus can then be diverted to investigating the strength of that trend.
Price Action is a popular mechanism for doing so. Traders can simply look as to whether a market is in the process of making ‘higher-highs’ and ‘higher-lows.’ If this is taking place, then the trader is witnessing an up-trend, and can look to move down to the shorter time frame in an effort to buy as efficiently as possible.
Another popular way of grading trend strength on the longer-term chart incorporates the ADX indicator. ADX, or the Average Directional Index is an indicator created by J. Welles Wilder that was designed specifically to grade trend strength. The downside of this is that it doesn’t show which direction the trend might be moving, only whether the trend is ‘strong’ or ‘weak.’
Traders can use the ADX indicator on the longer-term chart to determine whether or not a trend is being seen in the market. If values are reading over 30 on ADX, then traders will often look to execute trend-based strategies.
Now that the Trend is determined, what’s next?
The shorter time frame is where the trader will often look to enter into the market based on the analysis on the longer time frame.
If a trend was found on the longer time frame, the trader’s job is to find a way to enter in the direction of that trend. On the lower time-frame, the trader can look to buy up-trends cheaply, or to sell down-trends expensively. This can be done with price action; or traders can look to incorporate indicators to offer a ‘trigger’ in the direction of the longer-term trend on the shorter time frame. Some common indicators for triggering positions on the shorter time frame are MACD, Stochastics, and the Commodity Channel Index (CCI).
If a Range-bound market condition was seen on the longer time frame, the trader has another decision to make before deciding how to enter: Does the trader want to trade continuation of the range, or the eventual breakout?
The logic of the range-bound entry and the breakout is directly opposite: Trading ranges entails selling highs, and buying lows (in anticipation of the range continuing), while trading breakouts involves buying new highs and selling new lows (with the expectation of the breakout bringing new highs or new lows into the market).
If trading for the break, traders can look to place entry orders slightly outside of support or resistance levels so that once a new high or low is printed, the trade is entered and the trader can look for new highs or lows.
If traders are looking to trade the range, an oscillator can be used similarly in the way that a trader would buy or sell in a trend (with the notable exception that up-side is limited). In both trends and ranges, traders want to look to ‘buy low’ and ‘sell high.’ The same types of tools can be used to determine when to buy and when to sell; MACD, Stochastics, and CCI are all popular mechanisms to trade in range-bound market conditions just as they are with trends.
Down But Not Out: Banks' Energy Traders Find Life Raft In Long-Term, Complex Deals (based on Forbes article)
At first glance, recent news hasn?t been so hot for the banks and their once high-flying commodity trading business units.
While it looks like the big U.S. banks are being pushed out of the energy trading business, the truth is, they aren’t going far. Instead of exiting the market, the banks are simply shifting their exposure to the back end of the commodity curve – the five to fifteen year deals instead of the one month to 2 year timeframes popular over the last decade or so. That’s where some of the big money can be made these days, the same as it was when I traded these markets, and the bankers are going back after it.
2013-03-05 00:30 GMT (or 01:30 MQ MT5 time) | [AUD - GDP]
if actual > forecast = good for currency (for AUD in our case)
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Australia Q4 GDP Climbs 2.8% On Year
Australia's gross domestic product added a seasonally adjusted 2.8 percent on year in the fourth quarter of 2013, the Australian Bureau of Statistics said on Wednesday.
That beat forecasts for an increase of 2.5 percent following the 2.3 percent gain in the third quarter.
On a quarterly basis, GDP added 0.8 percent - also topping expectations for an increase of 0.7 percent following the 0.6 percent gain in the previous three months.
2013-03-05 10:00 GMT (or 11:00 MQ MT5 time) | [EUR - Relail Sales]
if actual > forecast = good for currency (for EUR in our case)
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Eurozone Retail Sales Rise More Than Expected In January
Eurozone retail sales grew more-than-expected at the start of the year, recovering strongly from a slump in the previous month, figures from Eurostat showed Wednesday.
Retail sales rose 1.6 percent from December, when they fell 1.3 percent, revised from a 1.6 percent slump. Economists had expected 0.8 percent growth for January.
2013-03-05 13:15 GMT (or 14:15 MQ MT5 time) | [USD - ADP Non-Farm Employment Change]
if actual > forecast = good for currency (for USD in our case)
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ADP National Employment Report: Private Sector Employment Increased by 139,000 Jobs in February
Private sector employment increased by 139,000 jobs from January to February according to the February ADP National Employment Report(R). Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by ADP(R), a leading global provider of Human Capital Management (HCM) solutions, in collaboration with Moody's Analytics. The report, which is derived from ADP's actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.
2013-03-05 15:00 GMT (or 16:00 MQ MT5 time) | [CAD - Interest Rate]
if actual > forecast = good for currency (for CAD in our case)
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Bank of Canada leaves interest rate unchanged at 1%
The Bank of Canada left its benchmark interest rate unchanged in March in a widely expected decision and repeated language from its January policy statement on Wednesday.
In its sixth meeting under the helm of Governor Stephen Poloz, the BoC said it was leaving its overnight cash rate unchanged at 1%, in line with expectations.
“With inflation expected to be well below target for some time, the downside risks to inflation remain important,” said a statement accompanying the announcement.
The BoC judged “that the balance of risks remains within the zone for which the current stance of monetary policy is appropriate. The timing and direction of the next change to the policy rate will depend on how new information influences this balance of risks.”
FCA Announces to introduce a new Regulator by April 2015 (based on forexminute article)
The UK’s finance regulatory body aims at improving competition by opening the market for new entrants.
UK’s official regulatory authority FCA has today announced to inaugurate a new regulatory body by April 2015, under The Banking Reform Act (2013). The new body will be authoritative to oversee UK payment systems, while monitoring business ethics and safeguarding consumer protection within the finance sector.
According to an official report by FCA, the UK’s payment systems process over 7 billion transactions per annum, worth over £75 trillion. The FCA’s ‘call for inputs’ will help shape the focus of the new regulator’s work.
“This sector is critical to the economy so it must reflect the needs of people and firms and enjoy their confidence,” said FCA Chief Executive Martin Wheatley. “We need to know if the sector is as open as it should be to new entrants into the market and whether consumers are getting the best possible deal.”
USDCHF Technical Analysis (based on dailyfx article)
Prices stalled at trend line resistance set from late January after the US Dollar produced its strongest push upward in a month against the Swiss Franc. A break this barrier (now at 0.8880) initially exposes 38.2% Fibonacci retracement at 0.8921. Support is in the 0.8848-66 area,marked by the December 2013 closing bottom and the 23.6% level, with a break below that eyeing the February 28 lowat 0.8776.
The pair is trading too close to relevant resistance to justify a long position from a risk/reward perspective. On the other hand, a short position seems premature absent a defined reversal signal. We will remain flat for now.