Market Condition Evaluation based on standard indicators in Metatrader 5 - page 106

Sergey Golubev
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newdigital, 2015.04.28 08:16

Trading the News: U.K. Gross Domestic Product (GDP) (based on dailyfx article)

The U.K.’s 1Q Gross Domestic Product (GDP) report may dampen the appeal of the British Pound and undermine the near-term rebound in GBP/USD as the growth rate is expected to increase an annualized 2.6% after expanding 3.0% during the last three-months of 2014.

What’s Expected:


Why Is This Event Important:

Threats of a slower recovery may encourage the Bank of England (BoE) to adopt a more dovish tone while delivering its quarterly inflation report on May 13, and the central bank may look to further delay its normalization cycle in an effort to stem the downside risks surrounding the region.

Nevertheless, the ongoing improvement in the labor market paired with the rebound in business outputs may generate a positive development, and an unexpected pickup in GDP may spur a larger advance in British Pound as it boosts interest rate expectations.

How To Trade This Event Risk

Bearish GBP Trade: U.K. GDP Slows to Annualized 2.6% or Lower

  • Need red, five-minute candle following the GDP print to consider a short British Pound trade
  • If market reaction favors bearish sterling trade, short GBP/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
Bullish GBP Trade: 1Q Growth Rate Exceeds Market Expectations
  • Need green, five-minute candle to favor a long GBP/USD trade
  • Implement same setup as the bearish British Pound trade, just in reverse
Potential Price Targets For The Release

GBPUSD Daily Chart


  • Ongoing series of higher highs & lows favors a further advance in GBP/USD; could be at risk for a reversal as the RSI threatens the bearish momentum carried over from July 2014.
  • Interim Resistance: 1.5340 (78.6% retracement) to 1.5350 (50% retracement)
  • Interim Support: 1.5015 (50% expansion) to 1.5050 (50% retracement)

GBPUSD M5: 37 pips price movement by GBP - GDP news event :


The U.K. economy expanded at a slower-than-expected pace during the last three-months of 2014 as the growth rate climbed an annualized 2.7% following a 2.6% rise in the third-quarter. The lackluster recovery may encourage the Bank of England (BoE) to largely retain a wait-and-see approach in 2015, but we may see Governor Mark Carney continue to prepare U.K households and businesses for higher borrowing-costs as the central bank looks for a pickup in economic activity. The initial bearish reaction was short-lived as GBP/USD pushed above the 1.5100 handle ahead of the North America trade, with the pair ending the day at 1.5165.

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GBPUSD, M5, 2015.04.28

MetaQuotes Software Corp., MetaTrader 5

GBPUSD M5: 46 pips price movement by GBP - GDP news event

GBPUSD, M5, 2015.04.28, MetaQuotes Software Corp., MetaTrader 5, Demo



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newdigital, 2015.04.29 14:48

2015-04-29 13:30 GMT (or 15:30 MQ MT5 time) | [USD - GDP]

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

[USD - GDP] = Annualized change in the inflation-adjusted value of all goods and services produced by the economy. It's the broadest measure of economic activity and the primary gauge of the economy's health.

==========

"Real gross domestic product -- the value of the production of goods and services in the United States, adjusted for price changes -- increased at an annual rate of 0.2 percent in the first quarter of 2015, according to the "advance" estimate released by the Bureau of Economic Analysis.  In the fourth quarter, real GDP increased 2.2 percent.

The Bureau emphasized that the first-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3 and "Comparisons of Revisions to GDP" on page 5).  The "second" estimate for the first quarter, based on more complete data, will be released on May 29, 2015.

The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE) and private inventory investment that were partly offset by negative contributions from exports, nonresidential fixed investment, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased."

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USDJPY, M5, 2015.04.29

MetaQuotes Software Corp., MetaTrader 5

USDJPY M5: 38 pips price movement by USD - GDP news event

USDJPY, M5, 2015.04.29, MetaQuotes Software Corp., MetaTrader 5, Demo



Sergey Golubev
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Sergey Golubev  

I made technical analysis for May this year for EURUSD here but there two pairs with more interesting situation on daily timeframe: USDJPY and XAUUSD.

USDJPY


As we see from D1 chart - this is breakout going on, and the price is turning from the primary bearish to the primary bullish. This may be very important because this is primary trend - means: D1 price is reversed globally to uptrend. It is just started so we will see how the situation will be depends on this week.

XAUUSD (Gold)


This is the situation which may be opposite to USDJPY: this D1 XAUUSD price is reversed from the bullish to the primary bearish (to global daily downtrend). And we will see this week about the continuation of it.

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Sergey Golubev, 2015.05.05 08:43

2015-05-05 05:30 GMT (or 07:30 MQ MT5 time) | [AUD - Cash Rate]

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

[AUD - Cash Rate] = Interest rate charged on overnight loans between financial intermediaries. 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.

==========

Australia Trims Key Rate By 25 Bps To Record Low

The Reserve Bank of Australia lowered its benchmark interest rate by a quarter point as inflation outlook provided the space for monetary policy easing.

As expected by economists, the policy board governed by Glenn Stevens on Tuesday decided to cut the cash rate by 25 basis points to a record low of 2.00 percent, effective May 6.

This was the second reduction this year. The bank last reduced the rate by 25 basis points in February.

"The Board judged that the inflation outlook provided the opportunity for monetary policy to be eased further, so as to reinforce recent encouraging trends in household demand," the bank said in a statement.

Today's rate cut is unlikely to be the last in this cycle, Paul Dales chief Australia & NZ economist at Capital Economics said.

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AUDUSD, M5, 2015.05.05

MetaQuotes Software Corp., MetaTrader 5

AUDUSD M5: 117 pips price movement by AUD - Cash Rate news event

AUDUSD, M5, 2015.05.05, MetaQuotes Software Corp., MetaTrader 5, Demo



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Sergey Golubev, 2015.05.05 14:58

2015-05-05 13:30 GMT (or 15:30 MQ MT5 time) | [USD - Trade Balance]
  • past data is -35.9B
  • forecast data is -41.2B
  • actual data is -51.4B according to the latest press release

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

[USD - Trade Balance]  = Difference in value between imported and exported goods and services during the reported month. Export demand and currency demand are directly linked because foreigners must buy the domestic currency to pay for the nation's exports. Export demand also impacts production and prices at domestic manufacturers.

==========

"The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $51.4 billion in March, up $15.5 billion from $35.9 billion in February, revised. March exports were $187.8 billion, $1.6 billion more than February exports. March imports were $239.2 billion, $17.1 billion more than February imports.

The March increase in the goods and services deficit reflected an increase in the goods deficit of $14.9 billion to $70.6 billion and a decrease in the services surplus of $0.6 billion to $19.2 billion.

Year-to-date, the goods and services deficit increased $6.4 billion, or 5.2 percent, from the same period in 2014. Exports decreased $11.7 billion or 2.0 percent. Imports decreased $5.3 billion or 0.8 percent."


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AUDUSD, M5, 2015.05.05

MetaQuotes Software Corp., MetaTrader 5

AUDUSD M5: 34 pips price movement by EURUSD M5: 52 pips price movement by USD - Trade Balance news event news event

AUDUSD, M5, 2015.05.05, MetaQuotes Software Corp., MetaTrader 5, Demo


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Sergey Golubev, 2015.05.06 14:14

Non-farm Payrolls (based on forexlive article)



Goldman Sachs analyst say "the best spots to buy the US dollar are against the euro, yen and Canadian dollar on expectations of an upward surprise".

Sergey Golubev
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Sergey Golubev, 2015.05.06 14:52

2015-05-06 13:15 GMT (or 15:15 MQ MT5 time) | [USD - ADP Non-Farm Employment Change]

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

[USD - ADP Non-Farm Employment Change = Estimated change in the number of employed people during the previous month, excluding the farming industry and government. Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity.

==========


"Private-sector employment increased by 169,000 from March to April, on a seasonally adjusted basis."


MetaTrader Trading Platform Screenshots

GBPUSD, M5, 2015.05.06

MetaQuotes Software Corp., MetaTrader 5

GBPUSD M5: 49 pips price movement by USD - ADP Non-Farm Employment Change news event

GBPUSD, M5, 2015.05.06, MetaQuotes Software Corp., MetaTrader 5, Demo


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USDCHF, M5, 2015.05.06

MetaQuotes Software Corp., MetaTrader 5

USDCHF M5: 38 pips price movement by USD - ADP Non-Farm Employment Change news event

USDCHF, M5, 2015.05.06, MetaQuotes Software Corp., MetaTrader 5, Demo


Sergey Golubev
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Sergey Golubev, 2015.05.07 07:49

Forex technical analysis: USDJPY corrects back to 200 hour MA (based on forexlive article)


Like the EURUSD, the USDJPY is back up testing the 200 hour MA at 119.46 (green line in the chart below).  The 50% of the  move up from April 30 is at 119.49.  This was support earlier today.  What was support becomes resistance. So I would expect traders to lean against the MA on the first look.  A move above could take some of the selling fear out of the market.  Look for traders to shift allegiance on a move above 119.50.  


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Sergey Golubev, 2015.05.07 07:54

EURUSD rotates toward broken trend line (based on forexlive article)

The EURUSD has rotated lower after the surge higher. The pair is down testing the broken trend line on the 4- hour chart. That level comes in at 1.1326.


A move back below is needed to show the sellers are taking back some control.  Risk defining level for dip buyers (stop below 1.1317 (50% of the last trend leg higher).



Sergey Golubev
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Sergey Golubev  

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Sergey Golubev, 2015.05.08 07:15

Goldman Sachs sees upside risks in nonfarm payrolls despite soft ADP (based on forexlive article)

Goldman Sachs sees nonfarm payrolls matching the 230K consensus estimate, despite just 169K jobs in Wednesday's ADP employment report.

"While labor market indicators were mixed in April, the employment components of service sector surveys were strong and better weather conditions should provide a boost. In addition, we see some upside risk to our forecast from a calendar effect," they wrote.

The market is likely priced below the 230K consensus, somewhere closer to 200K, so a stronger reading would give the US dollar a lift.

"We expect the unemployment rate to decline by one-tenth to 5.4% and average hourly earnings to rise 0.2%," Goldman Sachs analysts wrote.