Market Condition Evaluation based on standard indicators in Metatrader 5 - page 113

 

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Sergey Golubev, 2015.06.25 11:38

Key FX Strategy & Themes - ANZ (based on efxnews article)


"OVERVIEW AND STRATEGY: The USD depreciated through June, though overall it remained relatively well supported. The Fed eased market fears once again by emphasising that any tightening path will be gradual, while at the same time firming expectations that the first hike would occur in 2015. However, this reprieve does not present an attractive opportunity to reload carry trades, and the distribution of outcomes remains disproportionately skewed to a stronger USD. In the interim, domestic fundamentals remain in focus and idiosyncratic events will continue to be the primary driver of currency performance."

"THEMES: The euro area is still in need of very loose financial conditions, and a soft EUR is a part of that mix. In this environment, further strength remains constrained, and risks remain to the downside. Conversely, in the UK, signs of a broadening of growth will continue to underpin expectations of policy normalisation and support the GBP. Thematically our view on the AUD and NZD remains unchanged. The outlook for the AUD is looking more balanced, while the NZD remains an underperformer story. In Asia, economic data continues to disappoint and further policy easing is likely forthcoming. Here our bias remains to buy USD/Asia on dips."


 

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Sergey Golubev, 2015.06.25 18:15

Deutsche Bank - 4 Reasons To Stay Long USD/JPY Targeting 128 (based on efxnews article)


Deutsche Bank advises clients to stay long USD/JPY reiterating its view that USD/JPY should gradually trade up to 128 over the course of Q3. DB outlines the following 4 reasons behind this view.

1- "Japanese institutional investors continue to buy foreign assets, and not only on dips. Lifers in particular have ramped up purchases with limited sensitivity to the exchange rate. We think pensions, albeit more sensitive, have lifted their trailing dip-buying level closer to ¥122," DB argues.

2- "The trade surplus posted in March—the first in four years—proved shortlived, as the trade balance has shifted back into deficit. We expect recent deficits of ¥200bn to narrow only slowly," DB notes.

3- "Although speculative short positions in JPY remain heavier than before the recent move up to ¥125, a fresh widening of the rate differential should help break that level," DB adds,

4- "This is likely to be driven by US monetary policy expectations, but the Japanese leg could also help. Our baseline is that inflation well below the 2% target will induce the BoJ to maintain QQE at the current rate well beyond 2015," DB projects.


 

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Sergey Golubev, 2015.06.26 08:38

Trading Video: Preparing for Euro and Dollar Moves (based on dailyfx article)

  • Greece is on the top of all - not just Euro - traders' minds, and anticipation will disrupt trend
  • The Dollar is similarly focused on upcoming conditions between next week's NFPs and holiday conditions
  • Crosses further away from such prominent fundamental risks still offer better technical opportunity

Markets will soon face a reckoning after this extended period of quiet complacency. On the risk front, officials are running out of time and liquidity to find an acceptable compromise over Greece's strained financial health. After Thursday's failed talks, all parties will reconvene on Saturday and try to push through a solution before a IMF payment and the official expiration of the country's rescue program on Tuesday. For a monetary policy focus - the most productive fundamental theme over the past year - US rate expectations will be charged by June NFPs, but the lead in will be particularly interesting between anticipation and expected holiday trading conditions. Meanwhile, it is worthwhile looking outside of the Euro, Dollar and Yen (the most risk-sensitive) for less restrained opportunities. We look at the potential building up and playing out in today's Trading Video.



 

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Sergey Golubev, 2015.06.26 19:28

EURUSD Continues Trading in Range (based on dailyfx article)

  • EURUSD opens in a 40 pip range
  • S4 breakouts begin at 1.1160
  • Range resistance sits at 1.1220


The EURUSD has started Fridays trading ranging between values of support and resistance. Price is currently retesting support at the bottom of today’s trading range found at the S3 camarilla pivot at a price of 1.1180. It should be noted that price has already moved through today’s 40 pip trading range twice at this point in time. In the event that values of support hold, it raises the possibility of prices returning to values of resistance, including the R3 pivot found at 1.1220. If prices continue to range, this would mark the third straight day of consolidation for the pair.


Alternatively, if prices continue to fall below the S3 support pivot, traders will begin looking for a breakout under the S4 pivot point at 1.1160.Price has already attempted to breakout once this morning, and abearish breakout would signal an end to current range bound market conditions. In this scenario traders can begin looking for new trend based positions on the creation of new lower lows.


 

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Sergey Golubev, 2015.06.27 06:28

Tech Setups For EUR/USD, GBP/USD, AUD/USD, USD/CAD - Barclays (based on efxnews article)

EUR/USD: No change. We are bearish and prefer to fade upticks against resistance in the 1.1300 area. A move below 1.1135 would signal lower towards our targets near the 1.1050 area and then the 1.0815 May lows. Our greater downside targets are at the 1.0460 year-to-date lows. 

GBP/USD: Thursday’s bullish engulfing candle has encouraged us to re-instate our bullish view. We are looking for a move back towards the 1.5930 range highs. Above there would confirm upside towards our greater targets near 1.6000 and then 1.6200. 

AUD/USD: No change. We are bearish against the 0.7850 recent highs and look for a move lower towards targets near 0.7600 and then the 0.7530 year-to-date lows. Further out, we are targeting the 0.7100 area.

USD/CAD: Our bullish view would be encouraged by a break above 1.2425. Our initial targets are towards the 1.2565 June highs and then the 1.2835 year-to-date highs.


 

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Sergey Golubev, 2015.06.27 20:16

Crédit Agricole for US Week Ahead: NFP, ISM, Factory Orders, Cons Conf, Housing (based on efxnews article)

We look for continued growth in May pending home sales, albeit at a slower pace of 0.6%. Pending sales of existing homes likely maintained its upward trajectory in May, albeit at a slower pace of 0.6%. As of April, pending sales, or signed contracts that have not closed, are up almost 10% so far this year. That pace is likely not sustainable although we do not expect a sharp retracement yet. Mortgage applications for purchase stabilized in May following sharp jumps in the prior two months, suggesting a slower pace of pending sales growth in May. Our projection for continued sales growth points to another rise in existing home sales (closings) in June. 

June consumer confidence likely edged higher to 98.0 from 95.4. The Conference Board consumer confidence index is expected to edge higher in June to 98.0 from 95.4. In the past four months the index has retreated from its post-recession high of 103.8 in January, hitting a low of 94.3 in April. Yet the slightly higher May index of 95.4 still stands close to pre-crisis averages. In line with our view that the unemployment rate will continue to fall this year with a steady pace of job growth, we expect confidence to revert back on its upward course. A recovery in consumer spirits has already been captured by the University of Michigan survey, which rose over 5 points in June. One risk to our scenario is sluggish wage gains, but so far we are seeing signs of a pickup in the near term. 

Construction spending likely slowed to a 0.4% increase in May following a 2.2% pop in April. May construction spending likely softened to a 0.4% rise after a 2.2% jump in April. The strength in the prior month reflected robust growth across private residential and non-residential as well as public construction. In May we expect residential spending (excluding improvements) to posted a softer increase given the reversal in housing starts. Private non-residential spending, which saw strong growth in March and April, likely moderated. Despite slower expected growth in May, our estimates are consistent with stronger residential investment and an improvement in structures spending in Q2. 

The ISM manufacturing PMI likely saw modest improvement in June, rising to 53.0 from 52.8. We look for a modest increase in the June ISM Manufacturing PMI of 0.2 percentage points to 53.0. The index bounced back smartly in May after running at a low of 51.5 for two straight months. Regional Fed surveys suggest only a small improvement this month. The June Philly Fed index, after adjustment to ISM weighting, firmed almost 2 points to a 6-month high, while the adjusted Empire State index slipped a touch but remained above its March/April lows. Our June projection of 53.0 would put the ISM index slightly above its Q1 average, indicating a small recovery in manufacturing activity in the second quarter.

June vehicle sales likely slowed roughly 2% to a 17.4 million unit rate after hitting 17.7 million units in May. We expect a modest slowing in June vehicle sales to a 17.4 million unit rate. Sales surged over 7% last month to 17.7 million units, so the June projection reflects a slight retracement. With gasoline prices on average remaining cheap compared to last June, the surge in popularity for utility and truck models is expected to hold. While the reversal suggests a more modest gain in June retail sales, it remains consistent with an acceleration in Q2 consumer spending to at least a 2.8% pace, up from 2.1% in the first quarter. 

We expect a 230K gain in June nonfarm payrolls with the unemployment rate falling back to 5.4%. We believe the labor market as a whole remained on a robust path of recovery in June. June nonfarm payrolls are expected to rise by 230K after rising a strong 280K in May. Jobless claims edged lower to 267K in the reporting week down from 273K in May, consistent with a solid payroll print and falling unemployment. The softer expected gain in June reflects slower growth in private service-sector jobs, which previously jumped 256K—the third sharpest increase in the post-crisis period. By contrast we look for some improvement in goods-producing payrolls, led by a robust rise in construction jobs. Manufacturing employment, which grew by 7K in May, likely saw a similar rise in June as regional Fed employment indicators indicated continued growth but no signal of a significant acceleration. Employment in the mining industries likely continued to contract though the stabilization in the oil and gas rig count decline suggests a slightly more modest drop than in May. To note, our June NFP projection relies on limited data at hand as we await the June ISM manufacturing, ADP employment and Conference Board confidence releases. We expect the unemployment rate to fall back to 5.4% in line with the declining trend in initial claims among other survey indicators. The labor force participation rate likely slipped back to 62.8%. Following a 0.3% pickup in May, average hourly earnings likely rose 0.2% which may push on-year growth down to +2.2% YoY. Finally, the average workweek is expected to be unchanged at 34.5 hours. 

Factory orders likely slipped 0.2% in May on a drop in durable goods orders. May factory orders are expected to fall 0.2% reflecting a 1.8% reported drop in durable goods orders. The May decline was driven by a plunge in aircraft orders; orders outside of transportation rose 0.5%. Orders for nondurables, the new data in the release, likely saw an increase in May in line with higher crude oil and commodity prices.


 

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Sergey Golubev, 2015.06.28 08:30

Crédit Agricole for US Week Ahead and What We’re Watching: NFP, EUR, USD, JPY & Greece Outcomes (based on efxnews article)

  • 'We remain of the view that a solution can be found in order to give Greece access to funds to repay the IMF next Tuesday. The EUR, however, is unlikely to face any material upside in an environment of strongly capped ECB monetary policy expectations.
  • If this is confirmed over the weekend, we suspect that USD could emerge as the biggest beneficiary and expect it to extend its gains against a broad range of G10 currencies. While a relief bounce in EUR cannot be excluded, we doubt that it will be sustained and expect renewed weakness especially against risk-correlated currencies and USD.
  • The risks to the above view have clearly grown of late, however, and we think that caution is warranted ahead of the talks over the weekend. 
  • If Greece and its creditors fail to reach an agreement this could weigh on risk sentiment as default fears soar at the start of the new week. EUR could weaken especially against liquid G10 currencies like JPY and USD.'


USD. Next week’s labour data should keep Fed rate expectations supported to the benefit of the greenback.

EUR. Regardless of any positive developments, related to Greece, we expect the EUR to remain subject to downside risk. This is due to the ECB’s aggressive policy stance.

GBP. Wealth effects to aid consumer spending. With Eurozone financial problems likely to persist irrespective of any Greek deal, the superior UK economic outlook should continue to support GBP in the week ahead.


JPY. Tankan unlikely to lift investor spirits. In keeping with the more cautious BoJ message expressed in recent weeks, key Japanese indicators this week should remain soft.


 

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Sergey Golubev, 2015.06.28 18:44

Morgan Stanley - EUR, JPY, GBP, AUD, CAD: Outlooks For The Coming Week (based on efxnews article)

"EUR: Markets Still Waiting for Greece. Bearish.

We remain bearish EUR over the medium term but believe that short term trading will be dominated by market risk appetite. Should European equities sell off as concerns about Greece rise, European investors would need to buy back their short EUR currency hedges, supporting the currency. That said, Greece remains a major risk and tensions are escalating, which could drive markets to increase the risk premia in the price of EUR, weighing on the currency.

JPY: Flows Keep JPY Supported. Bullish.

We believe JPY is likely to be one of the outperformers over the coming months and treat it like our quasi-dollar. Flow data suggests that Japanese investors continue to be net sellers of foreign bonds, driven by the higher volatility and thus this prevents the JPY weakening further. The key risk over the coming weeks is market’s risk appetite. A deterioration from negative news from Greece could be a further support for the JPY. We like medium term EURJPY short positions.

GBP: Strong Wages Keep GBP Supported. Neutral.

GBPUSD is being mainly driven by rate expectations and should the recent strong wage data be sustained then this should bring forward rate expectations. This week the BoE’s Weale suggested that he could vote for a rate hike as early as August. We believe there is potential for GBPUSD to reach 1.60 but prefer buying on the crosses, in particular against the NOK where an accommodative central bank highlights the divergences between the two currencies.

CAD: Trades with Oil. Bearish.  

We believe CAD is likely to weaken over the medium term in line with other commodity currencies and still observe a strong correlation with oil. The upcoming CPI print will be important, given prices have been on a down trend, and we believe the Bank of Canada could generally be too optimistic. Markets are pricing in little chance of a cut, and should this increase, it could weaken CAD in an environment of broader USD strength.

AUD: External and Domestic Pressures. Bearish.

We expect the AUDUSD uptrend to remain limited and would sell on rebounds. The outlook on the economy remains weak and now that iron ore prices are expected to weaken over the coming months from increased supply, there could be a renewed story to support the next leg lower in the AUD. Indeed, the RBA needs to remain dovish for our near term story to hold so it is a risk if the governor sounds less dovish than markets have come to rely on. 0.76 is a key support level."


 

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Sergey Golubev, 2015.06.28 21:25

COT report by Scotiabank: Takeaways On USD, EUR, AUD, & Other Majors (based on efxnews article)


EUR sentiment deteriorated for the first week in four, the net short widening $1.3bn to $13.9bn. Its w/w shift was the result of a paring back in both long and short positions, highlighting a broader trend of withdrawal in traders’ participation as a result of elevated uncertainty and the binary nature of Greek risk.

Investors pared back JPY risk in a manner similar to that observed in EUR, albeit to a greater degree with a $2.7bn decline in gross longs and $2.0bn decline in gross shorts. The pattern suggests that traders await a greater degree of certainty in the face of binary Greek risk.

CAD sentiment has deteriorated for the third week in four, the net short widening $0.4bn to $1.4bn on the back of a decline in gross longs—falling to their lowest levels since June 2013.

AUD sentiment is also bearish, albeit modestly so with a net short at $0.7bn. Investors in appear cautious in adding to risk in either CAD or AUD, waiting for a breakout of their relatively narrow ranges.


 

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Sergey Golubev, 2015.06.29 07:17

Forex technical analysis: EURUSD gaps. What is the trading strategy? (based on forexlive article)

'Looking at the daily chart below, the price has been able to extend below the 50% of the move up from the March low at 1.04617 to the high from May at 1.14658. That level comes in at 1.09638. This remains a key level to get below - and satay below if the bears are to extend the range further.' 



'Above, there a slew of old swing lows and highs at 1.1032 to 1.1065. The 100 day MA is at 1.1049 (key level). I would expect that sellers will lean against the 1.1032-49 area as a risk defining level in trading today. It would seem to me that the 100 day MA should be a key "line in the sand" for the pair from a technical perspective.  We should not trade above this level.'

Reason: