Market Condition Evaluation based on standard indicators in Metatrader 5 - page 111

 

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Sergey Golubev, 2015.06.16 07:56

Trading News Events: U.K. Consumer Price Index (based on dailyfx article)

An uptick in the headline & core U.K. Consumer Price Index (CPI) may spur fresh monthly highs in GBP/USD as it raises the Bank of England’s (BoE) scope to remove the record-low interest rate sooner rather than later.

What’s Expected:


Why Is This Event Important:

BoE Governor Mark Carney may sound increasingly hawkish over the coming months as the central bank head anticipates stronger price growth in the second-half of 2015, and we may see a growing number of Monetary Policy Committee (MPC) officials prepare U.K. households & businesses for higher borrowing-costs as the economy gets on a firmer footing.

However, waning confidence paired with falling input costs may continue to drag on price growth, and a dismal CPI print may undermine the near-term breakout in GBP/USD as market participants push back bets for a BoE rate hike.

How To Trade This Event Risk

Bullish GBP Trade: U.K. Headline & Core Inflation Upticks in May

  • Need green, five-minute candle following the release to consider a long British Pound trade.
  • If market reaction favors bullish sterling trade, long GBP/USD with two separate position.
  • Set stop at the near-by swing low/reasonable distance from entry; look for at least 1:1 risk-to-reward.
  • Move stop to entry on remaining position once initial target is hit, set reasonable limit.
Bearish GBP Trade: Consumer Prices Fall Short of Market Forecast
  • Need red, five-minute candle to favor a short GBP/USD trade.
  • Implement same setup as the bullish British Pound trade, just in the opposite direction.
Potential Price Targets For The Release
GBPUSD Daily



  • GBP/USD may continue to retrace the decline from May as it breaks out of the triangle/wedge formation carried over from the previous month, with the pair showing a net 2015-gain for the first time since May 22.
  • Interim Resistance: 1.5780 (38.2% retracement) to 1.5814 (May high)
  • Interim Support: 1.5400 handle to 1.5420 (78.6% expansion)
Impact that the U.K. Core CPI report has had on GBP during the last release
Period Data Released Estimate Actual Pips Change
(1 Hour post event )
Pips Change
(End of Day post event)
APR 2015 05/19/2015 08:30 GMT 1.0% 0.8% -43 -62


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GBPUSD, M5, 2015.06.16

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GBPUSD M5: 68 pips price movement by GBP - CPI news event

GBPUSD, M5, 2015.06.16, MetaQuotes Software Corp., MetaTrader 5, Demo



 

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Sergey Golubev, 2015.06.17 07:11

UBS for EUR: 'Greece Closer To The Brink' (based on efxnews article)

Should the Greek government and its international partners fail to reach an agreement in the emergency meetings scheduled for the coming days, a further escalation in the crisis would seem likely, argues UBS.

"This could well include changes to the ECB's provision of Emergency Liquidity Assistance (ELA) and capital controls, which would likely destabilise sentiment and put a heavy burden on the Greek economy, the banking system, and government finances – while not necessarily prompting the Syriza government to agree to Troika demands," UBS adds.


 

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Sergey Golubev, 2015.06.17 11:42

Bank of England Officials Unanimous in Keeping Rates on Hold (based on abcnews article)

Minutes from the Monetary Policy Committee meeting ending June 3 showed policymakers were mindful that "headwinds to growth" had begun to ease. The minutes show that over time, the interest rate to "keep the economy operating at normal levels of capacity," was likely to rise from the record low of 0.5 percent.

The Office of National Statistics also reported Wednesday that Britain's unemployment rate for the three months ending in April was 5.5 percent, down from 5.7 percent for the months to January.


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GBPUSD, M5, 2015.06.17

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GBPUSD M5: 79 pips price movement by GBP - Bank of England Minutes

GBPUSD, M5, 2015.06.17, MetaQuotes Software Corp., MetaTrader 5, Demo


 

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How to Start with Metatrader 5

Sergey Golubev, 2015.06.17 15:42

Just good new article: Identifying Trade Setups by Support, Resistance and Price Action

Table of Contents


Introduction

This article covers a trading methodology that can be used in any Forex, stock, or commodity market, as well as MQL4 code examples that can be used in an Expert Advisor based on this methodology.

Price action and the determination of support and resistance levels are the key components of the system. Market entry is entirely based on those two components. Reference price levels will be explained along with effective ways of choosing them. The MQL4 examples include parameters for minimizing risk. This is done by keeping market exit references and stops relatively close to the entry prices.

There is an additional benefit of allowing higher volume trades, regardless of account size. Lastly, options for determining profit targets are discussed, accompanied by MQL4 code that enables profitable market exit during a variety of conditions.


 

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Sergey Golubev, 2015.06.17 19:42

2015-06-17 19:00 GMT (or 21:00 MQ MT5 time) | [USD - Federal Funds Rate]
  • past data is 0.25%
  • forecast data is 0.25%
  • actual data is 0.25% according to the latest press release

if actual > forecast (or previous data) = good for currency (for USD in our case)

[USD - Federal Funds Rate] = Interest rate at which depository institutions lend balances held at the Federal Reserve to other depository institutions overnight. Short term interest rates are the paramount factor in currency valuation - traders look at most other indicators merely to predict how rates will change in the future.

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"The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions."

"When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent. The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run."

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GBPUSD, M5, 2015.06.17

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GBPUSD M5: 120 pips price range movement by USD - Federal Funds Rate news event

GBPUSD, M5, 2015.06.17, MetaQuotes Software Corp., MetaTrader 5, Demo



 

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Sergey Golubev, 2015.06.18 10:16

BNP Paribas - 'What USD Bulls Need Post-FOMC?' (based on efxnews article)

The Fed’s June statement and press conference failed to provide a catalyst for renewed USD gains and the currency has weakened in the aftermath of the meeting, notes BNP Paribas.

"Market participants seemed to focus on the shift lower in the Fed’s projection for the Fed funds rate, with the average “dot” for end 2015 falling to 57bp from 77bp. In her press conference, Chair Yellen noted that the conditions for justifying policy tightening were not yet in place and that, once tightening began, the pace of hikes would be very gradual," BNPP adds.

"However, we would emphasize that, according to the projections, a majority of FOMC members continue to anticipate at least two rate hikes before the end of 2015," BNPP argues.

"Moreover, the message from the Fed is clearly one of data dependency—if data continues to improve over the summer, markets will be forced to bring forward pricing for Fed hikes closer to our September forecast for lift-off," BNPP projects.


 

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Sergey Golubev, 2015.06.18 12:32

Trading tNews Events: U.S. Consumer Price Index (CPI) (based on dailyfx article)

What’s Expected:


However, subdued input costs paired with the persistent slack in the real economy may continue to drag on price growth, and a dismal CPI print may generate a further near-term advance in EUR/USD as market participants push back for the Fed liftoff.

How To Trade This Event Risk

Bullish USD Trade: U.S. CPI Rebounds 0.1% or Greater

  • Need to see red, five-minute candle following the release to consider a short trade on EUR/USD.
  • If market reaction favors a bullish dollar trade, sell EUR/USD with two separate position.
  • Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward.
  • Move stop to entry on remaining position once initial target is hit; set reasonable limit.
Bearish USD Trade: Consumer Price Growth Disappoints
  • Need green, five-minute candle to favor a long EUR/USD trade.
  • Implement same setup as the bullish dollar trade, just in reverse.
Potential Price Targets For The Release
EURUSD Daily



  • Despite the more cautious tone coming out of the Federal Reserve, EUR/USD may continue to face range-bound prices over the near-term as it fails to break out of the monthly opening range.
  • Interim Resistance: 1.1510 (61.8% expansion) to 1.1532 (February high)
  • Interim Support: 1.0970 (38.2% expansion) to 1.1000 (50% retracement)
Impact that US CPI has had on EUR/USD during the last release
PeriodData ReleasedEstimateActualPips Change
(1 Hour post event )
PipsChange
(End of Day post event)
APR
2015
05/22/2015
12:30 GMT
-0.2% -0.2% -144 -165

March 2015 U.S. Consumer Price Index

EURUSD M5: 140 pips price movement by USD - Consumer Price Index news event:


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GBPUSD, M5, 2015.06.18

MetaQuotes Software Corp., MetaTrader 5

GBPUSD M5: 29 pips price range movement by USD - CPI news event

GBPUSD, M5, 2015.06.18, MetaQuotes Software Corp., MetaTrader 5, Demo

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USDJPY, M5, 2015.06.18

MetaQuotes Software Corp., MetaTrader 5

USDJPY M5: 30 pips price range movement by USD - CPI news event

USDJPY, M5, 2015.06.18, MetaQuotes Software Corp., MetaTrader 5, Demo




 

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Sergey Golubev, 2015.06.19 11:10

Did it BREAK higher and fail, or are we going back above the old ceiling (based on forexlive article)


The EURUSD broke above the ceiling at the 1.1379-86 area. The move above spent 8 hours above. Over the last two hours the price has moved back below that ceiling. The pair has been consolidating over 7 or so days until the extension higher today.  The move back below the ceiling is a disappointment. Is that it? IS that all the market could do? Was that your best shot?


 

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Sergey Golubev, 2015.06.20 07:34

US Week Ahead: GDP, PCE, Durable Goods, UMich Sent, Housing (based on efxnews article)

Existing home sales likely rose a solid 4.4% to 5.26 million units in May. May existing (previously-owned) home sales are expected to post a solid 4.4% gain to 5.26 million units, more than reversing the April dip. Pending sales of existing homes, a leading indicator, have seen a steep upward trajectory since January and touched a post-recession high in April.

Durable goods orders likely slipped 0.2% in May while ex-transportation orders likely rose 0.6%. We expect durable goods orders to fall 0.2% while ex-transportation orders likely bounced back with a 0.6% increase. Non-defense aircraft orders likely weighed in May as Boeing reported only 11 new aircraft orders, down from 37 in April.

May new home sales are expected to rise 1.1% to a 523K unit annual rate. New home sales likely saw continued growth in May, rising 1.1% to 523K units. Sales in April jumped 6.8% led by a surge in the Midwest. We look for sales to increase on balance in May, albeit at a softer pace as the Midwest region likely retracted a touch.

In its third and final release, Q1 GDP growth likely saw an upward revision to -0.1% from -0.7%. We look for an upward revision to Q1 real GDP growth (-0.1% vs. -0.7%), reflecting revisions to March trade data that imply less of a decline in net exports.

The May headline PCE price index likely rose 0.4% on the month with the core index rising 0.1%. As a result, annual PCE inflation likely firmed to 0.2% YoY while core inflation was stable at 1.2% YoY. The May headline PCE price index likely rose 0.4% on the month while the core index is expected to rise 0.1%. Both match the monthly increases in the May CPI. In the May CPI report, energy prices boosted consumer prices with the gasoline index rising 10%, while food prices remained weak with a flat print.

Personal nominal income likely rose 0.5% in May while spending likely picked up with a 0.6% increase. May nominal income likely rose 0.5%, slightly firmer than the 0.4% increase in April. Earnings and hours posted strong gains in May, with average hourly earnings and the aggregate workweek both rising 0.3%.

The final University of Michigan (UofM) consumer sentiment index likely confirmed a rebound in June to 94.6 from 90.7 in May. June UofM consumer sentiment likely confirmed its preliminary print of 94.6, up from 90.7 in May. A June rebound in sentiment will be most welcome as the weak May reading marked the lowest level since November 2014. Gas prices hardly moved since the preliminary survey release, standing at $2.80/gal on average at the time of writing. After a volatile few weeks, stock prices also have rebounded from their June lows.


 

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Something Interesting in Financial Video February 2014

Sergey Golubev, 2014.02.10 11:15

06: DURABLE GOODS

This is the 6th video in a series on economic reports created for all markets, or for those who simply have an interest in economics. In this lesson we cover the Durable Goods report.

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Previous parts:

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Durable Goods Orders

Durable Goods Orders (DGO) is an indicator of orders placed for relatively long lasting goods. Durable goods are expected to last more than three years, e.g.: cars, furniture, appliances, etc.

This indicator is important for the market because it gives an idea of the consumers' confidence in the current economic situation. Since durable goods are expensive, the increase in the number of orders for them shows the willingness of consumers to spend their money on them. Thus, the growth of this indicator is a positive factor for economic development and leads to growth of the national currency.

  • Release Frequency: monthly.
  • Release Schedule: 08:30 EST, the fourth week.
  • Source: U.S. Census Bureau of the Department of Commerce.

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USDJPY M5 : 47 pips price movement by USD - Durable Goods Orders news event

EURUSD M5 : 32 pips price movement by USD - Durable Goods Orders news event :




Reason: