AUDUSD Gains Ground with EURO & CABLE 2

Finally, AUDUSD have started to regain its ground after most investors have swayed much stress over the retaliatory action s of China against the additional US trade tariff imposed by President Trump. The same manner that US equities have continued its pace to record levels after a minor corrective move led by the triple digit climb of the DOW above 26200. Meanwhile, this is also against a backdrop from US 10 year treasury yields that has posted above 3.00% in the US session. 

The AUDUSD price currently at 0.7230 is actually half way through its initial objective that still needs to build more momentum when it passes through above the 0.7280-0.7350. A clear objective of over 200 pips from its registered low at 0.7085.  Which was signaled from an opening gap & extension low that triggered the first round of short-covering  The technical perspective which we presented from the previous overlay chart can now justify that the bullish Gartley price pattern once completed would provide the final confirmation for a bounce. This is also where 'Patience is a virtue' when it comes to trading volatile markets.

This maybe encouraging for swing traders, on the contrary the 2nd objective may still prove to be some distance ahead. Which could easily result similarly to a 'dead cat bounce' if prices would not be accompanied with substantial volumes that would drive it past the 2nd objective. For now the current price swing higher to these levels are good. Especially, when the Australian Dollar got some additional support from their previous strong job data. There will always be a matter of trading  'CORRELATION' directly or indirectly when it comes to the financial markets.

Meanwhile, EURO got some initial relief from CABLE's previous weakness, but both currency pairs have remain firm to higher with the USD softness at this time. The way we approach its weakness for now is quite independent as it would likewise be used as a buffer strategy that once the FED raises rates the USD would be coming from its low pre-adjusted levels coming into the 4th quarter 2018. And this would be well in line with our projection for 10 year US yields to stay above 3% and relatively closer to 3.35% presumed range objective in the near-to-mid term quarter of 2019. 

AUSSIE Retraces 0.7180 Finally - USD takes a Breather

With the USD Index back above 95.05/10 Basis Point

From the AUDUSD consolidation period, it took a month / half for the AUSSIE to slide back towards 7180, as described on the chart below & based on the market & price level last July 19th. Obviously the exchange rates are misaligned at this time and the forex market takes a much longer period of time to make a decent market move on our price parameters. The relative mix price action among the major components of the USD index is in a misalignment compared to the right levels of which each pair should have moved based simply on their respective standard deviation. Following the sequence of market trade analysis describe below

After the consolidation period, the August 09th decline followed by a volatile price swing in both directions, the Aussie have finally set its objective right on the money at 0.7180. The next direction would really depend on both the USD and China relative performance as market drivers as a major trading partner of Australia. 

While other traders are doing day trades for a few pips here and there. That's alright, though the risk gets wider especially when the USD index or DXY stalls on the decline which only reached a low at 94.16 for the month of August. And closed Friday in the US session at 95.09 on a daily relief recovery. Not quite encouraging yet still well within its average range levels which it sustains for now.

One significant & relatively anticipated decline would come from another USD rally as it enters the month of September where the FEDERAL Reserve would pull the trigger for another rate hike and another in the month of December. Investors / traders alike who are well positioned with the USD is more appropriate until now from the time that we called it on 'STRATEGIES .USD Probable Turn in the Making'. That was indeed an excellent run from the low at 88.25 to the high at 96.98. Which in fact was transitioning into corrective mode when it reached its 50% FIBO resistance level that resulted to the August month's low at 94.16

AAPL at USD1T Valuation! USD steady prior to NFP Figures

With just one stock makes everyone holding it for keeps are all smiles heading to the bank! NFP figures would be the catalyst for the USD now resting slightly above 95.05 levels. Stay Ahead & on course! 

Apple Inc, prices as of 8.03.18

It's all a matter of perspective especially for those who patiently followed our sequence of trend analysis on US equities at the start of June. Where a revisit of the Equities record highs would not be discounted.

As the US market found its bearings from Trump's additional tariff on China didn't weigh heavier from US economic data leading to this Friday's Non-Farm Payrolls figures. Likewise, closely monitoring US 10-Year Treasuries above 3% would have been expected moving forward even when the FED stayed on course while waiting for the NFP on Friday.

Keeping the USD at a steadier level contrary to the BOE raising its rates by 25 Basis point did nothing to push it lower. Instead the Sterling Pound drifted lower after J. Carney confirms from the inflation report that saw GBPUSD at 1.3015 and continued to do so below this price level prior to the early US session. 

While everyone is waiting for the NFP report, the FX market across the board particularly the commodity currencies weakness can be seen relatively to the USD gaining strength. The AUDUSD is back at 0.7350 as one of the weakest for the week ending Aug 3, 2018.

USD Gains Steam & European Majors Drift Lower

With a stellar jobs data, the trade spat between the two biggest economies increases as China brings the issues to the WTO and European majors particularly the Sterling Pound have been quite supportive for the USD. The DXY is seen retracing back to its session high at 95.60 basis point as it is the strongest currency against its counterparts.

With the Sterling Pound (CABLE) drifting lower when it missed its retail sales report. GBPUSD is at 1.2984 heading well below the 1.2880 levels where it came from. While the EURUSD is keeping tis pace trading well below 1.1600 retesting it minor support levels, in which case both majors are in the defensive trying their respective best to hold these levels.

That includes the USDJPY corrective price action briefly dropping below the 113.00 handle due to risk aversion and from a light turnover from speculative liquidation as it draws closer to the US trading session. Meanwhile, with China soft data, commodity currency AUDUSD have likewise maintained a weaker stance as it falls to the 0.7343 where a revisit from where it came from at 0.7180 - 0.7280 range would not be discounted as long as the USD keeps its pace moving forward.
 
Although, the surrounding factors quite supportive of the USD strength came from the US  data, other equally important factors came from lower Gold at $1216.00 and Oil prices at $69.90 after marking a $67.80 low which have kept the USD index steady to higher price movements well in line with the FED's rate hike guidance from FED chair Jerome Powell's current testimony. While US equities are in a corrective mode from trade uncertainty will still be a concern for most investors relentlessly reacting to a volatile trade spat between China and the US including its allies.

USD Tops AUSSIE & CANADIAN Dollar

Matter of Choice & Perspective Between Safe Haven Bets or Commodity Currency and relative major pairs

The erratic pace of price action among the major currency pairs caused by market volatility for one, have covered both sides of the market directions. Each major pair have curved a wider HI/LO range, and their own respective reasons for their price movements.

Likewise, a lot of fundamental factors surrounding the  markets surfaced mostly from the US government's shuffle and global stocks including foreign equities disappointments have been the drivers of a very choppy market. No pattern can be identified as the market prices tend to be on the negative side can be quite unpredictable.

With that said, Commodity currencies weakness have also been on the defensive particularly the AUSSIE and the CANADIAN Dollar providing a firmer tone for the USD Index now above the 90.20/30 levels which we recently pointed out in our market view. 

As of this writing, the AUDUSD is trading at 0.7735 have fallen anew while the USDCAD have regained its footing after a mild corrective move at 1.2805 levels and is currently trading above 1.3085 levels. A resumption of its original trend direction since coming from the February low at 1.2287 with the equivalent USD INDEX then at 88.53 basis point levels. The only comparative analysis noted was the USDCAD had barely three minor price correction which have had a more impressive USD recovery compared with the AUDUSD itself.

As a matter of fact, the Australian Dollar trading partnership with China have shown that the AUDCNH and the AUDUSD have more of a similar price action as compared with the USDCAD. Hence, the discrepancy in USD recovery is greater with the CANADIAN Dollar as a matter of technical chart perspective.

Meanwhile, the USDJPY have made itself clear as a safe haven for any currency market disruption as the choice for a lot of investors. And has proven to be true as it has retested the 105.50 levels again while pulling back within the current session at 106.20. While the USD has also made headway with the USDCHF trading at 0.9535 a probable delayed reaction from the SNB maintaining its monetary policy.

Nearing the end of the month and 1st quarter trading would have quite an interesting market scenario, as the coming holy week and shortened trading; the probable market action would be deemed thin. Yet, the likelyhood of unexpected price before and after would be expected based on historical price movement which could emerge without any given notice.

So watch how the market plays out especially for the closing price levels of the USD by the months' end and opening levels for the first two weeks of April. Our fiduciary duty to our client interest does comes first keeping us at toes with the market to be relevant in these types of market conditions presented to us time and again!

   

USD Weakness Dominate Across the Board

As Market Sentiments Weigh Heavy

With the Japanese Yen still gaining ground on its value the USDJPY just broke the 110.00 levels and its currently at 109.89 aiming the 107.80 - 108.00 range on the way lower with an extension that may not be discounted to surpass these levels. The USD's continued weakness has been the dominant factor in the Yen's rise as it is supported by strong PMI & Japanese exports on top of Yen repatriation gradual flow into equities contributed to the appreciation as a whole. Although, the NK225 is on a corrective mode price at 23941.11 from a high at 24129.34 due in part to the USDJPY decline as of today's market movement.

The DXY is at 89.90 as of this writing. And at the rate it's going the 87.50 - 88.80 basis point range is simply a stone's throw away from its objective. On the other hand, this also provided other markets to catch up on the US Equities all time highs and directional movement as an overall picture taken into account. And more importantly the European majors like CABLE and the EURO have gained so much from where they both started during the last quarter of 2017.

ASX 200 Index

One of our market insight on the currency front is the AUSSIE Dollar rise as the ASX 200 index have also benefited from the USD weakness but more importantly Australia's growth have proven to take shape as the index have rallied to its six month high and stayed above the 6000k key price level. 

For the better part of the 1st quarter, we remain well within our time frame mentioned in our previous market outlook heading towards the 2nd quarter mid-year market shift as it now takes just about that period of time for the currencies to make a considerable move to really make a well informed trading and turning trades into an investment position particularly for CABLE, AUSSIE Dollar and the USD Bearish ETF to name a few.

Excellent Reference: 

USD Where it came from and where its heading!

Market Insight: USD EURO CABLE AUD JPY

European Majors Momentum Driven Market USD Weakness

With the USD still struggling to find a relief recovery have finally been taken over by the momentum driven trades from the YEN, EURO, CABLE, and the AUSSIE Dollar. It's like a concerted effort by the GANG of FOUR (4) as we call them in the interbank market. Initially leading an early stage with the Japanese Yen below the 110.50 levels for the past 6 trading days of accelerating value alone have actually led the pack as the rest followed suit.

While keeping tab at the USD weakness, Oil and Gold prices higher the selling pressure surrounding the DXY have made it harder for any immediate recovery. Although, we did mention that the probability would be towards mod-year term for a gradual move as the USD aligns itself for the next subsequent rate adjustments by the Federal Reserve.

Its has now 'VALIDATED' our market call on the USD Weakness Lifts Majors Higher dated Jan 02, 2018. With the EURUSD (chart above) near the 1.2280 high, CABLE at 1.3820 first line of defense, and the AUDUSD back to 0.7980 levels. Therefore, with the USD being our main valid indicator for currency trading when it moves more often than not the rest of it's counterpart moves in line with the corresponding value.

A more direct effect can be expected with the EURO as it carries a heavier weighted average distribution from the USD Index composition as indicated in the link provided for TSOT members access. It also shows the other relative importance of knowing how these distributions are reflected with the rest of the global currencies in Europe and Asia.

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USD Weakness Lifts Major European Currencies Higher

Among others!

With some Asian exchanges still closed for the holiday, the start of the new year for China's Hang Seng Index (HSI) moved reaching a 10 year high at 30515.31, +596.16 pts. = 1.99% on the first trading day of 2018. With Shanghai at 3349.05 +41.88 = 1.27% increase likewise, shrugged off the decline in the US equities on the last day of trading 2017.

With the USD slipping into negative territory for the year at 92.08, the USD Index would have quite some difficulty to recover at this early stage. Currently, the US Dollar index is at 91.85 with a low at 91.75. And may find itself in search of a bottom at the start of January trading. For now, any price recovery may simply end up as a relief recovery up until the mid-term of the 1st quarter of 2018.

AUDUSD As of January 2, 2018

Which can only mean good for the Aussie Dollar now at 0.7840 from the bottom price of 0.7500 just last Dec 08, 2017. And the continuation for the EURO currently above the all important price of 1.1880 and is now at 1.2035 to this writing. While CABLE have been dragged from the BREXIT negotiation table, it had worked itself back to its current levels at 1.3555 with a second wind aiming to mark 1.3580 - 1.3680 range for the week ahead.

With the backdrop on OIL's recovery above $60.00/bbl and Gold managing to stay afloat above $1300 /troy oz. at the rate that both markets have kept a firm grip due to the USD soft prices for the 2017, after briefly touching a 103.00 basis point on the 1st week of January 2017. And continued its decline starting the 2nd quarter thereafter. That's is why we have stayed well within the equities market towards the end of the year. With only to carry the AUSSIE Dollar and CABLE as Europe starts to gain economic ground from their recent lows, while focused on BITCOIN and GBTC Investment Trust settlements prior to the CBOE and CME launching their respective trading. An excellent trade decision if we may call it above par! As it would be unwise to trade against the CME when it comes to Futures trading.  

Let's see the first month's trading and decide how the 1st quarter would really look like based on our near term analysis for the USD as always our basis for market reference. 

Commodity Currency Benefits from 3 Majors' Weakness

Aussie has been the main beneficiary of the current market conditions primarily from the USD weakness. And woould continue further into the coming week with market sentiments building towards the three majors including the USD still in the negative territory.

With the Republicans political uncertainty on the final stages of the tax plan thus far have been pushing the USD - DXY still below the 93.60 level at the moment. Although, the USD did have a relief recovery, Retail sales and lower jobless claims did not provide any lift after the figures came out.

The AUDUSD have gained ground trading above the 0.7550 to 0.7600 channel resistance that added to the selling pressure of the European majors as well. But CABLE and EURO are more susceptible to external fundamentals. As the Sterling Pound is also negotiating its next phase agenda that proved to be a negative effect as it is currently at 1.3332 after briefly marking the 1.3465 high two days ago.

Likewise, the EURO's reaction after the ECB left rates unchanged continued its upbeat outlook on the economy while still maintaining quite a 'Dovish Tapering' Tone as most analyst have described the current market conditions. With the EURUSD being the 3rd in line from being part of the weakness among the major pairs, it is still under selling pressure with prices trading at 1.1771 a far outcry from its more important price at 1.1880 which it retested near the 1.2000 dated Nov 27, 2017 

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Price Action on AUDJPY / GBPJPY Cross Vs. USD DXY

Australian Dollar tumbles after CPI missing its mark prompting a decline with the AUDJPY. The Aussie is even weaker than Kiwi as a result from negative reaction of the new government's policies. AUDJPY is lower at 87.79 for the day, but is still higher coming from the 82.00 set last June and its recent second higher low at 86.00 dated last August 2017. 

Sterling Pound stronger than expected GDP data just boosted a greater probability of a November Bank of England rate hike.

GBPUSD is trading at 1.3238 from both sides of a corrective price move as a result of the figures adding fresh incentives for the day. Meanwhile, GBPJPY cross is at 150.80 retesting a 2nd wind up that may see through 152.00 - 153.80 range as initial targets in the near term. 

While in the US the 2-year US Treasuries are now trading above 1.60% up 2 bps that is supporting a dollar strength now at 94.00 bps from another widely expected nomination of a new FED Chair. John Taylor's name recently came out as a more favorable candidate from a survey among members in Washington as comparedwith the rest of the other candidates where Janet Yellen is still on the list.

#TSOT - Reference to #AUDUSD Market Call - VALIDATED

 The Methodology of Day & Time Price Action Analysis:

#Currencies #trading #Investing

Maximize AUDUSD Break out Rally from Consolidation. A clear cut understanding of the market's behavioral pattern through price movement can best be describe in this chart figure. This is just a glimpse of an in-depth analysis of the AUDUSD as validated by the breakout price even before it occurred. 

This is where price pattern and its behavior have been defined only to repeat its cycle well within its total number of days/ weeks couple with identifying similar chart patterns that provide a signal of where the next price action would take place. We are sharing this method of Day / Price Action Analysis combined with a few technical tools of candlestick formation. 

On the Technical Perspective: 

With reference to our July 14th market & price call the methods applied in analyzing the AUDUSD have been quite effective to say the least in obtaining a reasonable reward ration over the risk of loss in positioning when a candlestick formation of a morning star / long shadowed wick similar with a spinning top bar located on the lower band were established. 

#TSOT - Reference #Equities #Currency SHIFT 2

Excerpt dated July 7, 2017 On Equities Currency Shift 1

Modified to show Sequence of Trade Analysis:

With the #Aussie find some resistance at the 0.7710 /50 price range may support a steadier USD trading in a corrective session at 0.7603 as of this writing. Its wide consolidation may prove to be well in place but would not discount the probability to break higher when the USD fails to follow-through by the coming week. And today's US report which turned to be negative for the USD gave the AUDUSD the lift it needed. 

Chart figure A Shows July 7, 2017 Market Call - Consolidation to break higher

VIDEO SUPPORT: TSOT AUDUSD

Current Chart As of July 14, 2017 AUDUSD Breaks Out of Range 

Confirmation & Validation

Finally #AUDUSD breaks out from its consolidation with the help from the negative figures from the US retail #'s that brought about a USD decline that touched 95.22 low on the session. Currently trading at 0.7804 with a session high at 0.7828.

On the Technical Perspective: In-Depth Chart Analysis 

VALIDATION: As of August 02, 2017

With reference to our July 14th above market & price call the methods applied in analyzing the AUDUSD have been quite effective to say the least in obtaining a reasonable reward ration over the risk of loss in positioning when a candlestick formation of a morning star / long shadowed wick similar with a spinning top bar located on the lower band were established.

#USD Lifts #EURO #EURGBP Cross & Commodity Currency

Expect Wider Market Volatility Across 3rd Quarter 2017

The turning point & weakness in the USD-DXY back to 96.32 due to the delayed healthcare vote have given support on the ECB Mario Draghi inspired EURO moving towards the 1.1380 1st line of defense levels.

As we have seen an up/down price swing relative to the #EURUSD hi/lo range between 1.0500-1.1500 level. Wherein the choices we 've made back then is still valid with the #EURGBP remaining quite resilient well within its own range of 0.8400 - 0.9000 while currently trading @0.8853 to this writing. Click on Chart below for bigger view 

EURGBP Cross Rate

Price Update: An Obvious Market Squeeze of the EURUSD upon US Opening with traders over-reacting towards ECB Mario Draghi

The focus on Equities have long overshadowed the currency market with a few exceptions while awaiting for the resumption of a USD weakness provided a good support for the European majors and the commodity related currency. With the AUDUSD making a price recovery after trading well within its range at 0.7100 - 0.7750 levels; now has a higher probability of pushing though higher having a better foundation of its base and price consolidation.

With that said, the end of the week's trading closes the 2nd quarter trading for the year. Thus the prices marked would define the next opening quarter trading that would still involve a wider price range on these currency pairs moving forward into their respective band levels. In short, there would be a greater volatility of price swings that we are expecting in the opening price levels not only for the currency market but also with US Equities.