Trading the News: Canada Consumer Price Index (based on Canadian Dollar Risks Further Losses Amid Threat for Deflation article)
A further slowdown in Canada’s Consumer Price Index may highlight a
bearish outlook for the Canadian dollar as it heightens the threat for
Time of release: 11/22/2013 13:30 GMT, 8:30 EST
Primary Pair Impact: USDCAD
Forecast: 0.6% to 1.0%
Why Is This Event Important:
It seems as though BoC Governor Stephen Poloz no longer sees a need for
higher interest rates in light of the slowing recovery, and the central
bank may adopt a more dovish tone for monetary policy as growth and
inflation remains subdued.
How To Trade This Event Risk
Bearish CAD Trade: Canada Inflation Slows to 0.8% or Lower
CPI data out of Canada showed September price growth at 1.1%, beating
estimates of a 1.0% print. The USD/CAD pair weakened heading into the
weekly close as pressure mounted on the greenback due to speculation of a
delayed Fed taper- a result of the two week long US Government
shutdown. The year over year print this time around is estimated to be a
dismal 0.8% due to impacts from the shutdown in addition to a decline
in fuel prices across the board. Sustained lower crude prices will
continue to put pressure on inflation levels and may prompt dovish
intervention by the Bank of Canada as the Federal Reserve looks to step
back asset purchases over the next few months. Disappointing CPI prints
moving forward do not bode well for CAD strength, especially in the
context of a BoC that just removed pledges to raise rates in the future.
Algorithmic Trading System (based on When To Trade? My Algorithmic Trading System Shows You article)
Pre Algorithmic Trading System Analysis: This week has been a
little wild as stocks pulled back due to headline news. The two big
drops which took place on heavy volume sent market participants into an
emotional state liquidating their long positions on fear of a collapse.
Even though the stock market shows no sign of the trend reversing down,
traders are jumpy and quick to lock in gains with any negative new.
Logical Market Analysis Combined with Automated Algorithmic Trading System
Reviewing the charts for high volume resistance levels, previous pivot
highs and lows, and a close eye on the Barchart momentum index like we
just did in this report is only the tip of the iceberg when it comes to
complete market analysis.
There are many other things one should analyze for precision market
timing of the broad market. The stock market has several different
forces at play which move price and using a type of analysis which I
call INNER-Market Analysis allows us to capture all the market moving
forces within one indicator. This February when my book is published on
INNER-Market Analysis and algorithmic trading systems all this
information will be available if you would like to learn more.
Some other areas of the market which must be analyzed are trends, active
cycles, volatility, volume flows, and market sentiment to name a few.
What is an algorithmic trading system?
A trading algorithm is nothing more than a bunch of rules which you
create (your trading strategy) converted into a computer language so a
financial charting platform can run your trading strategy automatically.
Everything is done for you including the trading. The only thing the
system creator needs to do is monitor the algorithmic trading system for technical issues and possible tweaks here and there.
Conclusion About Using an Algorithmic Trading System:
Trading or investing for that matter is no easy task. And I know
firsthand that even if one has a proven winning strategy it’s almost
impossible follow the rules and catch every trade setup generated. I do
not know how many times I see perfect setups about to unfold and then
miss them because I was reviewing other charts, sending an email, going
to the washroom or grabbing a bite to eat.
Breakout with Ichimoku (based on Take Advantage of False Breakouts at Great Prices with Ichimoku article)
A false breakout takes place when price appears to be making a renewed
move in the direction of the trend only to be retraced. A trend trader
who is looking for prices to eventually move higher but wants
confirmation of a price thrust in the direction of the trend is
especially prey to false breakouts. This is because a break of
resistance like a trendline that is pierced by price without follow
through is ground zero to a false breakout.
How Ichimoku Helps You Recognize a False Breakout
Like many pains of trading such as stops getting hit at an unfortunate
price, false breakouts cannot be avoided. However, they can be minimized
as well as become a nice trading signal upon their failure. The reason I
like looking to false breakouts as a trading opportunities is that they
can often have a sharp reversal in the direction of the prior move with
a good risk to reward ratio.
Ichimoku is a technical trading system that helps you catch moves in
the direction of the trend on the time frame that you’re trading.
Ichimoku is often seen as a difficult system to learn due to the 5
components that are displayed on the chart to explain a trading
opportunity but each line serves a purpose and when you understand each
purpose, you begin to get a feel for the value that Ichimoku can bring
to your technical trading strategy.
If this is your first reading of the Ichimoku report, here is a recap of the traditional rules for a sell trade:
If the breakout turns out to be legitimate and 1.3550 is taken out, then
the next target would be in the neighborhood of 1.3630 /3650 range.
GOLD - Technical Analysis for the next week (based on Gold at 4-Month Lows- November Close in Focus Amid Thin Holiday Trade article)
Fundamental Forecast for Gold: Neutral
Gold plummeted more than 3.5% this week with the
precious metal trading at $1244 ahead of the New York close on Friday.
The decline marks the largest weekly loss in two months and comes on the
heels of the FOMC minutes from the October 30th
meeting where the committee showed a willingness to begin tapering in
the “coming months” if US economic data continued to improve. The
remarks saw taper expectations moved back up with investors now looking
to December as a viable timeframe. Strength in the greenback further
exacerbated the move with the Dow Jones FXCM Dollar Index (Ticker:
USDDOLLAR) closing the week just off 2-month highs. But with the
November close and a shortened week ahead, can the sell-off be
From a technical standpoint, gold invalidated last
week’s bullish outlook early in the week with the break & subsequent
close below $1268 and while the technical damage now keeps our broader
bias weighted to the downside, we will remain neutral into the close of
the month. Bearish invalidation has now been brought down to $1294 with
only a break above shifting our focus higher. Short-side support targets
are eyed at $1233/34, $1209 and $1179/81. Note that daily RSI has made a
slight rebound off the 30-thresholds and risks a near-term relief rally
early next week. We will continue to sell into rallies and a break
below $1233 with RSI conviction puts subsequent support targets into
focus. Interim resistance stands at $1250 backed by $1268 and $1294.
Note that the November opening range made a clear break early in the
month and we should expect prices to close the month not too far off
U.S. stocks analysis (based on U.S. stocks extend gains on jobless data; Dow up 0.34% article)
U.S. stocks extended Thursday's gains into Friday after investors continued to applaud strong weekly jobless claims data.
continued to build that the U.S. economy is improving though the
Federal Reserve will keep stimulating the economy with stock-boosting
bond purchases in the coming months to be sure recovery can stand on its
At the close of U.S. trading, the Dow Jones Industrial Average finished
up 0.34%, the S&P 500 index rose 0.50%, while the Nasdaq Composite
index rose 0.57%.
Leading Dow Jones Industrial Average performers included Boeing, up
2.29%, The Travelers Companies, up 1.45%, and Wal-Mart Stores, up 1.24%.The Dow Jones Industrial Average's worst performers included Intel, down 5.45%, IBM, down 1.56%, and Home Depot, down 0.82%.European indices, meanwhile, finished largely higher.After
the close of European trade, the EURO STOXX 50 rose 0.35%, France's CAC
40 rose 0.58%, while Germany's DAX 30 rose 0.25%. Meanwhile, in the
U.K. the FTSE 100 finished down 0.11%.
Maverick British billionaire Sir Richard Branson informed the world that
his commercial space flight company Virgin Galactic is now accepting
the digital currency Bitcoin. He tweeted that now travelers can pay in
Bitcoin to buy a ticket into space.
Though he is not new to digital currencies as he has invested heavily
before, this decision is quite significant. Branson also informed that a
“future astronaut,” a female flight attendant from Hawaii, has already
purchased her space travel ticket using Bitcoins.
What is Virgin Galactic?
Virgin Galactic should not be confused with Virgin Atlantic which is an
airline services provider from Sir Richard Branson; rather, it is a
company within Richard Branson’s Virgin Group which plans to provide
suborbital spaceflights to space tourists, suborbital launches for space
science missions, and orbital launches of small satellites.
According to the company sources from Virgin Galactic the company hopes
to offer orbital human spaceflights as well. Currently, Virgin
Galactic’s spacecraft is launched from a large airplane, giving the
spacecraft more initial speed and altitude than if it were launched from
Weekly outlook: November 25 - 29 (based on investing.com article by today)
Monday, November 25
Tuesday, November 26
Wednesday, October 27
Thursday, November 28
Friday, November 29
GOLD TECHNICAL ANALYSIS (based on dailyfx article)
Prices recoiled from resistance at a falling trend line set from late
October. A break below support at 1249.18, the 61.8% Fibonacci
expansion, has exposed the 76.4% level at 1222.60. A reversal back above
1249.18 aims for the trend line (now at 1265.38), followed by the 50%
Fib at 1270.67.
News Trading (based on How to Approach News Trading article)
“The most successful cases can be seen when traders are well aware of
which types of data will be moving the market during the respective
trading session” said Haris Constantinou, currency analyst at TeleTrade.
“This can be done using the economic calendars that are made freely
available by forex trading brokers.” Traders need to be watching the
market movements as these releases are unveiled to see if the general
reactions match the direction of the data. The next step in trading
these events comes with identifying which currency pairs will be most
heavily affected by the released data. Generally, data out of the US
will have a large effect on the US Dollar, European data will have a
large impact on the direction of the Euro, and so on.
2013-11-25 23:50 GMT (or 00:50 MQ MT5 time) | [JPY - Monetary Policy Meeting Minutes]
Yen strengthens after BoJ minutes
The yen strengthened in Asian trade Tuesday despite three of the nine
Bank of Japan board members seeing a greater downside risk to the
economy than the majority view of balanced risk, according to the
minutes of the Oct. 31 policy meeting released earlier in the day. USD/JPY traded at 101.49, down 0.19%, in a range of 101.34 - 101.73 after the minutes..Bank
of Japan board member Takehiro Sato said downside risks to weaker
prices is somewhat higher than the upside, while colleague Takahide
Kiuchi repeated his call for greater price target flexibly. Sayuri
Shirai said attention needs to be paid to downside risks to economic
activity and prices.The Bank of Japan is aiming for sustained
annual inflation at 2% by 2015 through an aggressive easing policy that
is supposed to work in combination with government economic reforms.At the meeting, the Bank of Japan board, by a unanimous vote, kept the bank's policy target unchanged as expected.