AUDUSD closing in on the lows of the year (based on dailyfx article)
Gold forming a base (based on dailyfx article)
Before we left on holiday we wrote about the potential for a low in Gold
during the first week in December. Despite numerous intraday probes
below, the low close in the metal for the month remains the idealized
turn window date of December 2nd. While the strength in Gold exhibited
since then has admittedly been rather pathetic there is still a very
real possibility in our view that this is all part of a basing process.
Last week’s high of 1267.75 is an important near-term pivot with
traction above needed to confirm that a more important low is indeed in
place. On the other hand, weakness below 1211 on an intraday basis or a
close below 1219 would negate the potential for a more important
AUDUSD and Fibonacci levels in trading (based on dailyfx article)
One way traders like shorting after price breaks below a trendline or
other significant level of support is to use breakout technique. This
involves getting short immediately after price moves through a level of
support. However, price oftentimes, retraces to retest the breakout area
and traders have to endure time wasted and negative drawdown that comes
along with this retrace.
2013-12-18 09:30 GMT (or 10:30 MQ MT5 time) | [GBP - Bank of England Monetary Policy Committee]
BoE Unanimous On Interest Rate, QE
Policymakers of the Bank of England unanimously decided to maintain
the interest rate at 0.50 percent and quantitative easing at GBP 375
billion, the minutes of the meeting held on December 4 and 5 showed
All the nine members of the Monetary Policy Committee
agreed that neither of the price stability knockout conditions that
would override the policy guidance provided in August had been breached.
a recovery in output appeared to be under way, and inflation had fallen
and was expected to remain close to the 2 percent target. The minutes
said no member thought it appropriate to tighten, or to loosen, the
stance of monetary policy at the current juncture.
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Key Levels to Watch Ahead of the FOMC
AUD/USD recorded a new low close for the year on Tuesday (by 1/10th of a
pip on the FXCM platform). The decline to this point has been
impressive with the exchange rate losing more than 8 big figures since
its failure at the 200-day moving average back in October. However, the
decline is now more than 40 trading days old. One of our favorite trend
cycle lengths is around 45 days as this marks a Gann Commodity “Death
cycle” where short-term reversals are more frequent. Interestingly this
day count will roughly coincide with the Winter Solstice (in the
Northern Hemisphere) this weekend which is another potentially important
inflection point in Gann theory. It is also worth pointing out that the
last few weeks of December are one of the stronger periods of the year
for the exchange rate on a seasonal basis. Factors certainly seem to be
aligning for at least a short-term reversal in the Aussie over the next
week. Tempting as it might be to try to catch the bottom tick, we prefer
to wait for strength that confirms our notion before positioning. Any
continued weakness into the latter part of next week will negate the
potential positive cyclicality.
2013-12-18 19:00 GMT (or 20:00 MQ MT5 time) | [USD - Federal Funds Rate]
if actual > forecast = good for currency (for USD in our case)
Fed Tapers Bond-Buying But Vows Low Interest Rates
The Federal Reserve on Wednesday tapered its massive bond-buying
program by $10 billion to $75 billion per month, citing recent
improvement in the U.S. jobs market.
Beginning in January, the Fed
will buy mortgage-backed securities at a pace of $35 billion per month
rather than $40 billion per month, and will add to its holdings of
longer-term Treasury securities at a pace of $40 billion per month
rather than $45 billion per month.
"In light of the cumulative
progress toward maximum employment and the improvement in the outlook
for labor market conditions, the Committee decided to modestly reduce
the pace of its asset purchases," the Fed said in a statement
accompanying today's decision.
GOLD TECHNICAL ANALYSIS – Prices are working to negative the potential
Head and Shoulders setup identified earlier in the week. Sellers are
testing below support at 1210.35, the 38.2% Fibonacci expansion, with a
close beneath this barrier exposing the 50% level at 1192.62. A turn
back above 1210.35 sees the first major layer of resistance at 1260.84.