And as we see from the chart below (I used Correlation_njel indicator from CodeBase) - Dollar Index is having negative correlation with Brent Crude Oil for now (same as EUR and CHF for example):
EUR/USD Intra-Day Fundamentals: U.S. Advance Retail Sales and 35 pips price movement
2016-05-13 12:30 GMT | [USD - Advance Retail Sales]
if actual > forecast (or previous one) = good for currency (for USD in our case)
[USD - Advance Retail Sales] = Change in the total value of sales at the retail level.
EUR/USD M5: 35 pips price movement by U.S. Advance Retail Sales news event
Forex Weekly Outlook May 16-20 (the source)
The US dollar had another positive week, enjoying some good data. UK and US inflation data, housing figures and most importantly the FOMC Meeting Minutes stand out. These are the highlights of this week.
Japan PM Abe To Postpone Planned Sales Tax Hike (based on the article)
Over the past few months Japan PM Abe insisted that he would not delay the consumption tax increase for a second time explaining that the increase would go ahead "unless a global economic contraction or a Lehman-style market shock jolted Japan's economy." But Nikkei Business Daily reported what many had expected: "Japanese
Prime Minister Shinzo Abe has decided to postpone a consumption tax
increase set for next April, judging it to threaten efforts to pull the
world's third-largest economy out of deflation."
Fundamental Weekly Forecasts for Dollar Index, GBP/USD, USD/CNH, AUD/USD and GOLD (based on the article)
Dollar Index - "The three-month rally in risk-oriented assets
has started to falter, and a deepening of that slide could certainly
agitate some haven appeal for the Greenback. However, full-scale risk
aversion is the thousand point weight swinging above the market and what
would most effectively leverage the depth of haven appeal that would
activate the currency’s haven status. That said, we may not need such an
extreme. With fears of currency wars growing, FX volatility could make
for a more ready driver. Watch this week’s G-7 meeting for FX mentions."
GBP/USD - "GBP/USD stands at risk of facing range-bound
conditions next week as market participants weigh the outlook for
monetary policy, but the pair may continue to mark fresh monthly lows
over the coming days should the exchange rate fail to hold above
near-term support around 1.4290 (78.6% Fib retracement) to 1.4330 (23.6%
USD/CNH - "Chinese commodities rode roller coasters this
week. Major commodities plunged to the daily limit-downs on Monday.
Then they diverged on Thursday: black commodities extended losses while
crops jumped higher with soybean and rapeseed hitting the daily
limit-ups. However, on Friday, soybean oil,
palm oil as well as five black commodities, dropped to the daily
limit-downs again. China’s commodity market is less developed than in US
or other major developed countries; it is also less regulated compared
to Chinese equity market. Such dramatic moves in the commodity market
could lead to a meltdown in the near term. If it happens, the panic may
drive capitals rushing out of the country, similar as it was seen early
this year cause by the tumbling equities. This is a potential risk for
the Chinese Yuan as a significant increase in capital outflows often
drives the currency lower."
AUD/USD - "The prospect of a more hawkish US central
bank bodes ill for risk appetite at a time when investors seem
increasingly concerned about a broad-based slowdown in global economic
growth. As such, news-flow to that effect may send the
sentiment-sensitive Aussie lower alongside share prices."
GOLD (XAU/USD) - "Retail Sales released on Friday topped expectations and while the
print alleviates some concerns over the health of the consumer, the
print does little to move the needle on central bank policy moving
forward. If anything, it does leave the door open with the focus now
shifting towards more significant data next week. Traders will be
closely eyeing the release of the April U.S. Consumer Price Index (CPI)
and minutes from April 27th policy meeting
where we hope to get a more detailed picture of where the committee
members stand as it pertains to the appropriate timing of future
interest rate hikes. Keep in mind that of the Fed’s dual mandate,
inflation remains the laggard; lending added significance to the current
pace of price growth."
Trading on Sentiment: The Power of Minds Over Markets
"Investor sentiment and analysis of media coverage are new frontiers to explore in understanding stock market gyrations. The news unconsciously affects investor behavior, which in turn moves the stock market. Thus analyzing investor behavior could potentially reap enormous profits, says behavioral finance expert Richard Peterson , a board-certified psychiatrist and CEO of MarketPsych in San Luis Obispo, Calif. Peterson’s new book, Trading on Sentiment: The Power of Minds Over the Markets, explains how to potentially “time turns in the stock market using media sentiment at the bottoms and tops of the business cycle.” The book was published by Wiley Finance in March."
"Peterson’s behavioral finance research firm provides data and consults hedge funds, traders and investment banks on economics, investments and trading strategies. His two other books are MarketPsych: How to Manage Fear and Build Your Investor Identity (Wiley, 2010) and Inside the Investor’s Brain: The Power of Mind Over Money (Wiley, 2007)."
Forum on trading, automated trading systems and testing trading strategies
Sergey Golubev, 2014.06.06 09:25
3 Steps to Trade Major News Events (based on dailyfx article)
Today, we are going to cover three steps to trade news events.
Step 1 - Have a Strategy
It sounds simple, yet the emotion of the release can easily draw us off
course. We see prices moving quickly in a straight line and are afraid
to miss out or afraid to lose the gains we have been sitting on.
Therefore, we make an emotional decision and act.
Having a strategy doesn’t have to be complicated. Remember, staying out
of the market during news and doing nothing is a strategy.
A strategy for the trader with a floating profit entering the news event
could be as simple as “I am going to close off half my position and
move my stop loss to better than break even.”
For the trader wanting to initiate a new position that is technically
based, they may decide to wait until at least 15 minutes after the
release, then decide if the set-up is still valid.
The active news trader may realize they need a plan of buy and sell rules because they trade based on what ‘feels good.’
Step 2 - Use Conservative Leverage
If you are in the market when the news is released, make sure you are
implementing conservative amounts of leverage. We don’t know where the
prices may go and during releases, prices tend to move fast. Therefore,
de-emphasize the influence of each trade on your account equity by using
low amounts of leverage.
Our Traits of Successful Traders research found that traders who
implement less than ten times effective leverage tend to be more
profitable on average.
3 - Don’t Deviate from the Strategy
If you have taken the time to think about a strategy from step number
one and if you have realized the importance of being conservatively
levered, then you are 90% of the way there! However, this last 10% can
arguably be the most difficult. Whatever your plan is, stick to it!
If I put together a plan to lose 20 pounds of body weight that includes
eating healthier and exercising, but I continue to eat high fat and
sugar foods with limited exercise, then I am only setting myself up for
You don’t have to be stressed or frustrated through fundamental news releases.
Technical Targets for EUR/USD by United Overseas Bank (based on the article)
EUR/USD: intra-day bearish, daily correction
is located below 200
period SMA (200 SMA) for the ranging market condition within the following key reversal support/resistance levels:
the price breaks 1.1361 level to above so the intra-day bullish reversal will be started, and if the price breaks 1.1282 level to below so the
bearish trend will be continuing.
Daily price is located above 200 SMA for the bullish market
condition: price is testing 1.1282 support level for the secondary correction to be continuing.
United Overseas Bank is considering the EUR/USD price to be on downtrend with 1.1215 target:
"The unexpected breach of 1.1350 and 1.1300 last Friday has shifted the
risk to the downside. While the outlook for EUR is bearish from here,
the downside potential appears to be limited to a test of April’s low of
1.1210/15. Downward momentum is only beginning to improve and a break
back above 1.1400 is enough to indicate that a short-term low is in
Technical Targets for AUD/USD by United Overseas Bank (based on the article)
AUD/USD: daily bearish reversal by 0.7253
support level to be broken by the daily close bar
is on breakdown by breaking 30-day low at 0.7253 and 200 SMA level to below for the reversal of the price movement from the primary bullish to the primary bearish market condition.
UOB is considering the price to be reversed to the bearish market condition with the secondary ranging, for example:
"Downward momentum is not strong and
we expected a slow drift lower to 0.7240 (low of 0.7236 during early
Sydney hours). From here, further extension lower to 0.7200 is not ruled
but the current price action suggests that AUD is trying to form a
short-term base for a recovery. However, confirmation that the bearish
phase has ended is only upon a move back above 0.7355 (adjusted from
AUD/USD Intra-Day Fundamentals: Reserve Bank of Australia (RBA) May Meeting Minutes and 80 pips price movement
2016-05-17 01:30 GMT | [AUD - Monetary Policy Meeting Minutes]
[AUD - Monetary Policy Meeting Minutes] = It's a 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.
AUD/USD M5: 80 pips price movement by Reserve Bank of Australia (RBA) May Meeting Minutes news event