Press review - page 568

[Sergey Golubev]

Weekly Fundamental Forecast for USD/CNH (based on the article)

USD/CNH - "A key message sent from the 19th Party Congress is that China’s growth target has been revised: the country will no longer set high GDP growth rate as a goal; instead, it will shift to focus on the “quality” of the growth. Five years ago, the 18th Party Congress set a target to double GDP in 2020 of that in 2010. Yet, this is removed in the work report delivered by 19th Party General Secretary and China’s President, Xi Jinping. In a press conference this week, Yang Weimin, a senior official, told that this removal is intentional, as the quality of the economic expansion has not been satisfying. This means over the following period, we may see even lower growth rate – a rate below the current target of 6.5% is possible. Also, the top Party leaders believe that China is still in the transformation phase; the recovery seen recently may not be sustainable until three tasks are finished: switching to a new development path, optimizing the economic structure and generating new growth monuments. These goals will take a “relatively long time” to achieve, according to Yang Weimin. This indicates the economy still faces considerable risks; the recovery process could take years to complete. Amid a slower recovery than its U.S. counterpart, the Chinese Yuan could bear additional bearish pressure against the Dollar in the long run. New party leaders have disclosed major strategies for the economy over a time frame from now to the mid-century. Continuing to implement supply-side reform is the first and one of the most important on the list. This includes cutting excess production, which is a pain in the short-term but could generate gains in the long-term. Next week, China will release both the official and Caixin PMI prints for October: the official PMI is expected to drop to 52.1 from 52.4 in the month prior; the Caixin PMI is expected to hold at 51.0. With the on-going supply-side reform, PMI gauges could continue to whipsaw over the following months."

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Chart was made on MT4 using iFibonacci indicator and MaksiGen_Range_Move indicator from CodeBase (free to download).

[Sergey Golubev]

Weekly Fundamental Forecast for Crude Oil (based on the article)

Crude Oil - "Oil traders learned this week that Saudi Arabian Crown Prince Mohammed bin Salman of the de facto head of OPEC told markets that he envisioned the energy industry entering a ‘new era.’ Such an era would have the industry lead by similar supply-side controls like the one engaged in by OPEC and select non-OPEC companies like Russia going forward. Proactive supply-side controls are only being engaged for the Brent Oil contract, the global benchmark as the EIA showed on Wednesday the US continues to gush oil. The EIA Crude Oil inventory report showed US exports rose to the second highest level on record exceeding 1 million per day for the fifth straight week."

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Chart was made on MT4 using iFibonacci indicator and MaksiGen_Range_Move indicator from CodeBase (free to download).

[Sergey Golubev]

Weekly Fundamental Forecast for S&P 500 (based on the article)

Crude Oil - "Next week is a busy one on the fundamental-front. We begin a new month on Wednesday, and with it brings the November FOMC meeting. The market, as per the CME FedWatchTool, shows Fed fund futures pricing in virtually no chance of a rate increase. However, at this time there is a 98% probability of a 25-bps increase at the December meeting. Barring a surprise increase on Wednesday the market will be focused on the policy statement. ‘High’ impact data releases on the docket begin on Monday with Core Personal Consumption Expenditure, Consumer Confidence on Tuesday, ISM Manufacturing on Wednesday, and to conclude the week on Friday we have the October jobs report."

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Chart was made on MT4 using iFibonacci indicator and MaksiGen_Range_Move indicator from CodeBase (free to download).

[Sergey Golubev]

Weekly Fundamental Forecast for GOLD (based on the article)

XAU/USD - "Heading into next week, all eyes fall on the Fed with the FOMC rate decision slated for Wednesday. While no change to the benchmark rate is expected, traders will be looking for any changes to the accompanying statement- specifically as it pertains to the inflationary outlook. Keep in mind markets have largely priced in a December hike with Fed Fund Futures currently showing an 87.1% probability for an increase of 25bps. However with both 3Q GDP and the Core Personal Consumption Expenditure (PCE) coming in stronger-than-expected on Friday, the question now becomes the future pace of subsequent rate-hikes."

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Chart was made on MT4 using iFibonacci indicator and MaksiGen_Range_Move indicator from CodeBase (free to download).

[Sergey Golubev]

Weekly Outlook: 2017, October 29 - November 05 (based on the article)

The US dollar had an excellent week, mostly thanks to speculation about the next Chair of the Fed. What’s next? The upcoming week opens a new month and packs both a Fed decision and the Non-Farm Payrolls. Here are the highlights for the upcoming week. 

1.  US Core PCE: Monday, 12:30. A monthly rise of 0.1% is on the cards.
2. Japanese rate decision: Tuesday morning. The Bank of Japan has failed to lift inflation despite a massive QE program and a negative interest rate. The current policy is to hold 10-year bond yields at 0%, thus buying bonds whenever needed. After the Japanese elections, the BOJ may reconsider its policy measures, but most BOJ meetings do not yield a change.
3. Euro-zone inflation data: Tuesday, 10:00. A full repeat is predicted now: 1.5% in the headline CPI and 1.1% in core CPI.
4. Canadian GDP: Tuesday, 12:30. A growth rate of 0.1% m/m is predicted.
5. US CB Consumer Confidence: Tuesday, 14:00. The score for October is higher: 121.1 points.
6. New Zealand jobs report: Tuesday, 21:45. The level of employment is predicted to jump by 0.8% and the unemployment rate is estimted to tick down to 4.7%.
7. US ADP Non-Farm Payrolls: Wednesday, 12:15. A gain of 191K jobs is on the cards.
8. US ISM Manufacturing PMI: Wednesday, 14:00. A small slide to 59.4 is expected in the headline number.
9. US Fed decision: Wednesday, 18:00. This is a meeting that does not consist of a press conference nor new forecasts and thus is not expected to yield a change in policy. The focus is on the December meeting when the Fed is likely to deliver its third and last rate hike for the year. So far, Yellen and her colleagues are not deterred by lower inflation and intend to proceed as usual. This November meeting provides them with an opportunity to give a hint if they may change their minds. Any expressions of concern about inflation could send the dollar lower, while confidence could send it higher.
10. UK rate decision: Thursday, 12:00. The Bank of England will probably raise the interest rate from 0.25% to 0.50%, reversing the post-Brexit hike of August 2016. In the previous meeting and in consequent speeches, the Bank of England gave heavy hints that they are going to raise the rates due to higher inflation (reached 3% y/y) and also on worries about rapidly expanding credit. However, one member cast doubt about the timing of the hike while Governor  Carney seemed unenthusiastic about further hikes. In case the BOE surprises with a no-change, the pound will crash, but the chances are low. In case they hike but hint it is only a one-off, the pound will likely wobble but no go anywhere fast. In case it is the beginning of a tightening cycle, the pound will leap. This is a “Super Thursday” meeting, that also consists of the Quarterly Inflation Report in addition to the rate decision and the meeting minutes. The QIR consists of inflation forecasts that could provide some prospects about the next moves while the meeting minutes could show if there were dissenters against the decision. The event will surely trigger high volatility.
11. US Non-Farm Payrolls: Friday, 12:30. The “king of forex indicators” will likely show a rebound in jobs after the extraordinary report for September. The impact of the hurricanes resulted in a loss of 33K jobs, the first drop since 2010. On the other hand, wages were up 0.5%, a big jump. The report for October will already be more “normal” with a gain in jobs to compensate for the loss. Wages may be more mysterious. If the report shows that the gain in salaries is persistent, it will certainly strengthen the case for a rate hike, given that higher paychecks impact core inflation.  The unemployment rate stood at 4.2% in September and could tick up from here. Jobs are expected to jump by 311K in October and the unemployment rate to remain at 4.2%. Average hourly earnings carry expectations for a rise of 0.2%.
12. Canadian jobs report: Friday, 12:30. A gain of 13.6K jobs is on the cards and the unemployment rate is projected to remain unchanged at 6.2%.
13. US ISM Non-Manufacturing PMI: Friday, 14:00. A lower score of 58.3 is expected.

[Sergey Golubev]

Weekly EUR/USD Outlook: 2017, October 29 - November 05 (based on the article)

EUR/USD certainly felt the decision of the ECB in a week that unleashed some volatility and sent the euro tumbling down. The upcoming week features inflation and GDP data among other events. Here is an outlook for the highlights of this week.

1. German retail sales: Monday, 7:00. For the month of September, a rise of 0.5% is expected. Germany’s economy leans more towards industrial exports than internal consumption.
2. Spanish CPI: Monday, 8:00. A small slide to 1.7% y/y is on the cards.
3. Spanish GDP: Monday, 8:00. A growth rate of 0.8% is projected.
4. German CPI: A similar figure is expected now.
5. French GDP: Tuesday, 6:30. A gain of 0.5% is estimated now, a repeat of the previous quarter.
6. French CPI: Tuesday, 7:45. The consumer spending measure is published at the same time but the CPI carries more weight.
7. CPI: Tuesday, 10:00. Core CPI slipped to 1.1%, falling short of predictions. The exact same numbers are projected now.
8. GDP: Tuesday, 10:00. The euro-zone economies grew by 0.6% in Q2, continuing the streak of upbeat publications. A slightly more modest growth rate of 0.5% is expected.
9. EU Economic Forecasts: Tuesday, 10:00. The European Commission releases its updated economic forecasts three times a year. After a few upbeat publications, it will be interesting to see if the crisis in Catalonia will have any impact on the projections. Some forecasters have revised down Spain’s growth prospects, but we haven’t seen the crisis being accounted for at the euro area level.
10. Unemployment Rate: Tuesday, 9:00. This busy time of the day also consists of the unemployment rate. After peaking above 12%, the jobless rate fell gradually and stands at 9.1% as of August. We now get the belated numbers for September. Another improvement is predicted: 9% this time.
11. Manufacturing PMIs: Thursday morning: 8:15 for Spain, 8:45 for Italy, final French figure at 8:50, final German number at 8:55 and the final euro-zone release at 9:00.
12. German Unemployment Change: Thursday, 8:55. Germany has seen unemployment dropping quite consistently in past years. The fall in July was quite impressive: 23,000. Another drop is likely for the month of August: 10K this time.

[Sergey Golubev]

How To Trade - Fractal Indicator and How Does It Work (based on blog post)

The fractals are technical indicators, part of the Bill Williams’ indicators. Unlike any other indicators, this one is not a line or histogram bars; it is just a simple arrow on top of or below the bars of the price chart. These fractals are formed when five consecutive bars align in a strict manner. There are two types of fractals:

Bearish fractals: this fractal forms over a bar in the price chart, only if the high of this bar is higher than the high of the previous two and next two bars. In real-life trading this fractal indicates a possible bearish movement. 

Bullish fractals: this fractal forms below a bar in the price chart, if the low of this bar is lower than the low of the previous two and next two bars. When you see this fractal, you should expect a bullish movement.

It is important to mention that the Bill Williams’ fractals are illustrated a bit late on the chart, because you need the fifth bar to close, in order to determine the highest high or lowest low. The fractals are trading signals, but they are far too insufficient to count on them alone: the buy fractal indicates a possible buy order and vice versa.

The fractals point out the strong levels. You can easily draw a line to connect multiple fractals to form either a resistance or a support line. These levels work exactly the same as the trend lines. If you take a look at the image, you will see the resistance line and the buy signal. We get this signal, because the price breaks the strong resistance level. However, if you take a close look at the chart before this moment, you will see a couple of sell signals. This clearly points out how inconclusive are the fractals alone.

If you have paid attention on the Trend Lines page, you already know that some traders use the fractals to build their trend line. We really like this strategy, but it is not something revolutionary.

Bill Williams’ fractals and Alligator indicator. These two indicators share great synergy and we will take a quick glance in the image. It is the same as the previous, but we have added the Alligator and this changes the picture quite a lot. Take a look at the buy signal; do you see now why we have not opened a sell order before the buy signal? The price moved above the Alligator and we needed to see a breach of the indicator’s levels and a couple of sell fractals, but did not see that. Instead, the price kept on moving above the Alligator and it even broke the resistance level, which gave us a clear idea of the future movement – buy and take profit.

[Sergey Golubev]

A Guide to the 5 Major Cryptocurrencies (based on the article)

Bitcoin

Bitcoin is currently the largest, most famous, and most valuable cryptocurrency. It was also the first, being launched by the still-anonymous “Satoshi Nakamoto” in 2009. Its market capitalization on 1st September 2017 was more than $77 billion, when there were an estimated 3 million individual owners of Bitcoins. It is accepted at more retail outlets than any other cryptocurrency. Bitcoin is the obvious choice for most investors, speculators and traders, as it is the most liquid cryptocurrency and can be bought, sold, or otherwise traded through more platforms than any alternative. Bitcoins are created by mining, which used to be within the capability of retail laptops and PCs, but is no longer so easily attainable. At current mining rates, 12.5 Bitcoins are created approximately every 10 minutes.

This rate of creation will gradually slow, until the total number of Bitcoins in existence reaches at most 21 million, which is expected to occur around the year 2140. All transactions, including the creation of new Bitcoins and all Bitcoin sales and transfers, are recorded in a public ledger. As such, transactions must be accepted by most nodes in the Bitcoin blockchain technology, and since Bitcoin is relatively widely owned, transactions take at least 10 minutes to be fully verified. Bitcoin miners act as the nodes within the blockchain, effectively administering the system and processing all transactions. Once all 21 million bitcoins have been mined, miners will have an increased need to charge transaction fees to maintain profitability. For this reason alone, traders are concerned that the cryptocurrency may face a problem in the future. It is worth noting though, that the purchase of assets or even an exchange of currency also incurs a transaction fee, so Bitcoin is not necessarily disadvantaged compared to other tradeable assets. Miners may already charge transaction fees if they wish, and choose which pending transactions to prioritize by whether they generate a fee. This means that if you are in a hurry, you can pay a little extra to get your transaction processed faster.

Bitcoin transactions and ownership are effectively private, as although the blockchain’s ledger is public and contains a record of every transaction ever made, owners are identified by digital credentials (“keys”) and not by name or other identifying factors. Owners may store and safeguard their keys using a variety of methods, all which will be covered later in more detail.

Ethereum

Ethereum is second to Bitcoin in size. It went live in 2015, and was developed by a Bitcoin programmer who was disenchanted with Bitcoin’s functionality.

Its market capitalization on 1st September 2017 was over $36 billion, a little under half that of Bitcoin, and there are an estimated 750,000 individual owners of Ether (as the currency is technically known). It is accepted by very few retail outlets or any other commercial organizations as a means of payment. The essence of Ethereum is that it is a blockchain technology designed to operate “smart contracts”, which are computer protocols intended to facilitate, verify, or enforce the negotiation or performance of a contract. The way to think of Ethereum is as a currency for business contracts over the internet, as opposed to Bitcoin which aims to be more of a store of value and generalized means of exchange. The amazing thing about “smart contracts” is that they are self-policing: the contracts are automatically voided when one party fails to fulfil their obligation. 

In other ways, Ethereum is functionally similar to Bitcoin. It is also mined, but the rules governing how it will be mined in the future are less clear than Bitcoin’s rules. Ethereum has a more corporate image, and was brought to market by a Swiss company. Ethereum has had some negative publicity as its ledger has been successfully hacked, and it has undergone several splits by “hard forks”, the first of which was engineered as a method to recover assets stolen in the hacking event. Nevertheless, some cryptocurrency analysts see Ethereum as likely to overtake Bitcoin in market capitalization at some point in the future. Still, recent months have seen Bitcoin’s capitalization grow proportionally faster than Ethereum’s.

Bitcoin Cash

Bitcoin Cash is an offshoot of Bitcoin, created on 1st August 2017 from a “hard fork” in the Bitcoin blockchain. This “hard fork” was the result of tension between those who prioritized Bitcoin as a store of value (i.e. an investment) over a means of exchange (i.e. transactional cash). Some Bitcoin miners wanted limits to be lifted which would increase the speed of transaction times. The result was that some Bitcoins split to form a new cryptocurrency with a faster transaction time, called Bitcoin Cash. It is mined and otherwise functions in the same way as Bitcoin. Its market capitalization on 1st September 2017 was over $9.8 billion, about one-eighth that of Bitcoin. Bitcoin Cash is typically most useful for people who need to derive their income streams from cryptocurrency, or make lots of fast business transactions. It can be seen as an investment vehicle as it has a market niche, and since the split, there is no doubt that its price has risen faster than Bitcoin’s has.

Ripple

Ripple is the fourth largest cryptocurrency. Its market capitalization on 1st September 2017 was just under $9 billion. 

It was released in 2012 but had been in development for 8 years prior. Ripple is quite different than Bitcoin and Ethereum, having a more corporate image and backing, and is really a decentralized transaction network verified by consensus rather than a straightforward cryptocurrency. It was developed as a fast and cheap real-time gross settlement system, and it can verify transactions in a few seconds, much faster than any other cryptocurrency. It is already used by several major banks, who consider it a more secure system than Bitcoin and other cryptocurrencies. Its native currency is the “Ripple”, but it can support any unit of value, whether fiat currency such as the U.S. dollar or even airmiles or other tokens! This flexibility, as well as its adoption by banks, attracts some investors who feel that Ripple’s technology will dominate the market and eventually overtake Bitcoin and Ethereum in market capitalization. However, it should be noted that its value has been rising much more slowly over the second and third quarters of 2017 than the value of other major cryptocurrencies.

Litecoin

Litecoin is the fifth largest cryptocurrency. Its market capitalization on 1st September 2017 was $3.4 billion. It was released in 2011 and was a fork from Bitcoin, i.e. an offshoot of Bitcoin. Its operation is nearly identical to Bitcoin’s in every way, except it has always had a much faster processing speed, and can currently process transactions at about four times the speed of Bitcoin.

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Charts were made on MT5 with Brainwashing system/AscTrend system (MT5) from this thread (free to download) together with following indicators:

• MaksiGen_Range_Move MTF - indicator for MetaTrader 5
• ASCtrend - indicator for MetaTrader 5
• Ichimoku Cloud - indicator for MetaTrader 5
• Vortex - indicator for MetaTrader 5

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Same systems for MT4/MT5:

The beginning

1. ASCTrend system, the beginning, part #1
2. ASCTrend system, the beginning, part #2
3. ASCTrend system, the beginning, part #3
4. ASCTrend system, the beginning, part #4 
5. Digital ASCTrend (Digital Filters with ASCTrend system combined).
6. LabTrend (LabTrend indicators, LabTrendZigZag, templates, Labtrend EAs) - the thread

After

1. The main AscTrend thread is this one.
2. Asctrend indicator in depth 
3. ASCTREND SYSTEM summary (good EAs included) 
4. Brainwashing system/AscTrend system (MT5) - the thread  

[Sergey Golubev]

Caterpillar, Amazon, Alphabet, and Microsoft - so far his quarter, 74% of all companies reporting have beaten their expectations (based on the article)

Caterpillar share price is on strong bullish breakout since the April this year for 139.87 resistance level to be crossing for the bullish trend to be continuing. 

• "The stocks to own this past week were Caterpillar, Amazon, Alphabet, and Microsoft because they shocked the market with surprisingly robust double-digit gains in revenues and earnings per share. In a bull market, it showed that investors could still be surprised by performances that were totally unexpected. It appears that Wall Street didn’t reckon either on revenues gained in Asia or the global surge in the purchase of electronic equipment like mobile phones. It’s also testament to the companies’ tight-fisted signals to Wall Street that so many investors could be surprised so pleasantly. So far his quarter, 74% of all companies reporting have beaten their expectations."
• "This evidence of the dynamic quality of the technological revolution that is sweeping the world in a fashion that cannot be predicted by Wall Street. The hunger for the hardware to communicate means Apple, Facebook and other companies like Intel will also be the beneficiaries of the communications revolution. Consider this: Amazon, Alphabet, Microsoft and Intel increased revenues by $19 billion and profits by $2 billion in just one year’s time, according to Market Watch."

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The chart was made on D1 timeframe with Ichimoku market condition setup (MT5) from this post (free to download for indicators and template) as well as the following indicator from CodeBase:

• ZigZag + Fibo - indicator for MetaTrader 5

[Sergey Golubev]

USD/CAD Intra-Day Fundamentals: Canada Gross Domestic Product and range price movement 

2017-10-31 12:30 GMT | [CAD - GDP]

• past data is 0.0%
• forecast data is 0.1%
• actual data is -0.1% according to the latest press release

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

[CAD - GDP] = Change in the inflation-adjusted value of all goods and services produced by the economy. 

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From official report :

• "Real gross domestic product (GDP) edged down 0.1% in August, after being essentially unchanged in July. Declines in manufacturing and mining, quarrying and oil and gas extraction more than offset increases in most sectors (12 out of 20)."
• "Goods-producing industries contracted for the second consecutive month, declining 0.7% in August in part due to temporary reduced capacity in the manufacturing and the mining, quarrying and oil and gas extraction sectors. Services-producing industries edged up 0.1%."

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USD/CAD H1: range price movement by Canada Gross Domestic Product news event 

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Chart was made on MT5 with Brainwashing system/AscTrend system (MT5) from this thread (free to download) together with following indicators:

• MaksiGen_Range_Move MTF - indicator for MetaTrader 5

Same system for MT4:

1. Brainwashing. Trades: manually and using EAs (MT4)
2. Brainwashing EAs - the thread (MT4)
3. Brainwashing: system setup for trading manually and for EAs (MT4) - the thread 
4. Brainwashing: system development (MT4) - the thread