AUDIO - Freaky Friday with John O'Donnell
Many market experts are calling for a MUCH higher dollar, and this could have significant impacts for the markets. John O’Donnell joins Merlin Rothfeld for a breakdown of how this might impact: Oil, Gold, bonds, global currencies and much more.
More hawkish than expected = Good for currency (for AUD in our case)
[AUD - Monetary Policy Meeting Minutes] = It's a detailed record of the RBA Reserve Bank Board's most recent
meeting, providing in-depth insights into the economic conditions that
influenced their decision on where to set interest rates.
RBA Minutes: Modest Growth Likely To Continue For Economy
Members of Australia's monetary policy board believed that the rate of growth for Australia's economy is likely to hold steady for the time being, minutes from the central bank's November 4 meeting revealed on Tuesday.
the meeting, the RBA left its benchmark cash rate unchanged at a record
low 2.50 percent. The rate has been at the current level since August
"The forces underpinning the outlook for domestic activity
were much as they had been for some time and the forecasts had not
materially changed; GDP growth was still expected to be below trend over
2014/15, before gradually picking up to an above-trend pace towards the
end of 2016," the minutes said.
Price & Time: USD Head Fake? (based on dailyfx article)
AUD/USD Fundamental Analysis November 20, 2014, Forecast (based on fxempire article)
eased by 49 points give up weekly gains as the US dollar recovered in
the morning session. The Aussie is trading at 0.8670. Problems from
Japan weigh on the Aussie. Japan’s Abe confirmed widespread speculation
by announcing he would delay plans for an unpopular second hike in the
consumption tax scheduled for October next year by 18 months and would
dissolve the lower house of parliament on Nov. 21 to seek a mandate at
the polls next month for his set of economic policies, known as
Abenomics, and includes economic reforms that have proven difficult to
implement. The announcement came after data this week showed the
Japanese economy has fallen into recession, with two quarters of
negative growth. This in turn weakened the Australian dollar, as traders
focused on the Japanese government getting a mandate to delay a planned
sales tax rise.
The Australian dollar eased again as traders positioned themselves
for today’s release of minutes from the Federal Reserve’s October
meeting, and for possible clues on an American rate rise.
RBA governor Glenn Stevens told a business dinner in Melbourne that
interest rates were likely to stay at a record low of 2.5 per cent for
some time as mining investment and income growth fell and household debt
and unemployment rose.
Forum on trading, automated trading systems and testing trading strategies
newdigital, 2014.05.11 15:39
Fundamental analysis is the study of statistical reports and
economic indicators of countries to trade currencies more effectively.
Changes in interest rates, employment reports, and the latest inflation
figures, all fall under the purview of fundamental analysis, which forex
traders must pay close attention to, because they can have a direct
bearing on the value of a nation’s currency. Data used in forex
fundamental analysis can be classified by the degree to which they
affect the market:
Given the importance of these indicators, it is necessary to closely
follow economic calendars, and know beforehand when they are scheduled
for release. The most powerful indicators that move forex market
Traders, who rely on fundamental analysis to study markets, will
typically create models to formulate a trading strategy. These models
generally utilize a host of empirical data and try to forecast market
behavior and estimate future currency levels. This information is then
used to draw out specific trades that best exploit the situation.
Forecasting models are as varied and numerous as the traders that create
them. Two people can analyze the exact same data and come up with two
completely different conclusions about how it will impact the market.
Therefore is it important to understand what is more relevant to the
current market and economic conditions, and not succumb to ‘paralysis by
AUD/USD Daily Outlook (adapted from actionforex article)
AUD/USD's fall from 0.8795 picked up some momentum. But still, it's
held above 0.8539 support. Intraday bias remains neutral and more
consolidation could be seen in range of 0.8539/8910. As long as 0.8910
resistance holds, deeper decline is still expected. Break of 0.8539
should target 61.8% projection of 0.9401 to 0.8642 from 0.8910 at
0.8441. However, decisive break of 0.8910 will indicate near term
reversal and turn outlook bullish.
In the bigger picture, price actions from 1.1079 are viewed as a
medium term correction. The rejection from 55 weeks EMA and current
downside acceleration suggests that it's still in progress. Sustained
break of 50% retracement of 0.6008 to 1.1079 at 0.8544 will pave the
way to 61.8% retracement at 0.7945 and below. On the upside, break of
0.9504 is needed to confirm medium term reversal. Otherwise, we won't
turn bullish even in case of strong rebound.
if actual > forecast (or actual data) = good for currency (for EUR in our case)
[EUR - German PPI] = Change in the price of goods sold by manufacturers. It's a leading indicator of consumer inflation - when manufacturers
charge more for goods the higher costs are usually passed on to the
Producer prices in October 2014: –1.0% on October 2013
In October 2014 the index of producer prices for industrial products
fell by 1.0% compared with the corresponding month of the preceding
year. In September 2014 the annual rate of change all over had been
In October 2014 energy prices decreased by 3.6%, prices of consumer
non-durable goods by 0.6% and prices of intermediate goods by 0.3%. In
contrast prices of capital goods rose by 0.6% and prices of durable
consumer goods by 1.2%.
The overall index disregarding energy decreased by 0.1% compared with October 2013.
Compared with the preceding month the overall index decreased by 0.2% in
October 2014 (–0.1% in August 2014, unchanged in September 2014).
Trading the News: U.S. Consumer Price Index (CPI) (based on dailyfx article)
A downtick in the U.S. Consumer Price Index (CPI) may spark a more
meaningful rebound in EUR/USD as it dampens the interest rate outlook
for the world’s largest economy.
What’s Expected:Why Is This Event Important:
It seems as though the Federal Open Market Committee (FOMC) is in no
rush to normalize monetary policy as a growing number of central bank
officials highlight the downside risk for inflation expectations, and a
marked slowdown in price growth may undermine the bullish sentiment
surrounding the greenback as central bank hawks Richard Fisher and
Charles Plosser lose their vote in 2015.
Nevertheless, the ongoing improvement in household and business
confidence may stoke faster price growth, and a strong inflation report
should boost the appeal of the greenback as it raises the Fed’s scope to
normalize monetary policy sooner rather than later.
How To Trade This Event Risk
Bearish USD Trade: U.S. CPI Slows to Annualized 1.6% or Lower
MetaTrader Trading Platform Screenshots
EURUSD, M5, 2014.11.20
MetaQuotes Software Corp., MetaTrader 5, Demo
EURUSD M5: 52 pips ranging price movement by USD - CPI news event
Scalping the AUDUSD Correction- Longs Favored Above 8565 (based on dailyfx article)
US equity market closed on a positive note on Thursday, pushing the DOW and S&P 500 to fresh record closing highs, as data showed further strength in the US economy. The Dow Jones
industrial average rose 30.6 points or 0.17% to close at 17716.33, the S&P 500 gained 3.98 points or 0.19% to 2052.7 and the NASDAQ Composite added 26.16 points or 0.56% to close at 4701.87.
With no important data on Friday, market is expected to trade range bound with less volume.
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