Stress tests tonite on Ireland.

I've been so caught up with my work that i've not been able to follow the markets properly this week. Seems like i may have missed some movements, what a bummer!!

So let me update all of you and myself with what's been happening with the markets.

looks like risk sentiment has been improving following US labor market data. ADP employment report showed +201k for march which is in line with expectations and quite supportive for this Friday payroll release. USD looks weaker though today on month end selling as well as because of Bullard stating he's the minority to think of cutting short QE2.

On the Eurozone front, looks like from portugal now we have stress test results coming in tonight on Ireland. Reuter's survey showed showed expectations that about EUR 25bn of the EUR 35bn set aside for banks under the EU/IMF plan will be required following the release of the test results today. Just in we saw a much improved German jobless rate.

Sterling seems to be following the Eurozone lead and was supported by the selling of EURGBP on speculation of a large M&A deal.

Aussie retail sales came in higher at +0.5% with building approvals coming in lower at -7.4%. Aussie seems to be supported due to the demand in AUDJPY.

We do have quite a bit of data tonite so keep a watch on that.

Data Today

UK Nationwide House prices - 6am GMT

German Unemployment Rate - 6am GMT

Euro-zone CPI estimate - 9am GMT

US Initial Jobless Claims - 12.30pm GMT

US Chicago Purchasing Manager - 1.45pm GMT

US Factory Orders - 2pm GMT

Happy Trading!

FxTaurian

Portugal makes the headlines again!

Eurozone’s worries and disappointment from the BOE minutes benefitted the dollar. But this didn’t last long as US new home sales disappointed with a large drop.

Euro came under pressure on concerns that Portugal will require a bailout after its parliament rejected minority government’s austerity measures.

Bank of England MPC voted 6- as expected, and rates tone is pretty much the same from February. But the March meeting occurred before events in Japan and MENA, so April’s meeting maybe a lot more cautious which brought the sterling lower.

Japanese authorities noted the stock loss of the Japanese earthquake would range between JPY 15-25 tln.

It’s amazing how when you’re not watching the market for one day, trends and movements come about! We have some important data out today from the UK and the U.S which could move the sterling. Also on the Euro front, I think the Portugal issue should be monitored. My opinion though, I would look at this downward movement as a retracement rather than a trend change, and will hope to enter a long position once I get a trigger on my charts.

Data Today

UK Retail Sales – 9.30am GMT

Eurozone PMI Manufacturing – 9am GMT

Eurozone PMI services – 9am GMT

German PMI Manufacturing – 8.30am GMT

German PMI services – 8.30am GMT

US Core Durable Goods Orders – 12.30pm GMT

US Initial Jobless Claims – 12.30pm GMT

Happy Trading!

FxTaurian

Some risk sentiment has returned. USD gets beaten again!

Dollar performance was mixed again during the New York session as some risk sentiment came back. The treasury department announced it would unwind its remaining $142bn of agency – guaranteed mortgage-backed securities which caused treasury yields and dollar strength. These moves retraced back down as worse than expected home sales data came out of the U.S.

ECB President Trichet reinforced the pre-existing message that “strong vigilance” is needed on inflation.

Yen was capped yesterday as more stable risk sentiment and high probability of G7 intervention are limiting the demand for the currency. Moody’s said the downside risks from Japan’s disasters have increased.

Today we have the UK CPI which could bring some movement in GBP. Considering that risk sentiment has come back and another ECB hawkish statement, I’d look into buying into dips on the Euro, USDJPY and Sterling. Aussie seems to be trotting away higher as well the strongest.

This morning has been fairly quiet with some USDJPY movement downwards to below 81.00 levels.

Data Today

UK CPI – 9.30am GMT

UK Public Finances – 9.30am GMT

US house price index – 2pm GMT

Happy Trading!

FxTaurian

EUR/USD 4-hour chart – top of the channel

On the 4-hour chart we can see that spot has reached the top of the upward trend channel and seems to be holding quite strong as a resistance. I’m looking into entering a short position over here.

Zooming into the 15-minute chart for an entry level, I notice that the 10EMA (blue line) has crossed below the 20EMA (red line). MACD and stochastics have also turned negative.

I entered into the trade on spot.

Trade

Short EUR/USD at 1.4148

Stoploss: 1.4195 (47 pips)

1^st Take profit: 1.4101 (move stoploss to breakeven at 1.4148)

2^nd Take profit: 1.4054 (94 pips)

Risk/reward ratio:  2:1

Happy Trading!

FxTaurian

Japan on holiday, and Libyan Crisis is still the headline

This weekend we saw an escalation in the crisis in Libya and Japan’s nuclear issues are still a concern. On Saturday, military action was launched against Libya and the US and French defense authorities went on record saying a de-facto no fly-zone is in place through the country.  The USD and JPY have suffered from higher oil prices and its hard to predict how USDJPY will perform.

EURUSD rallied after Libya announced a cease-fire, but the situation remains uncertain.

There was no follow through joint intervention, so we saw USDJPY retreat to levels below 81 this morning. With Japan out on holiday today, expect a thin market. Rumors over ECB intervening in EURJPY saw the pair rocket up to 115 before settling lower as USDJPY momentum stalled.

AUDUSD lagged behind as China raised its reserve ratio by another half a percent. But we see AUDUSD rallying upwards at the moment.

BOE policy decision minutes will be released this week as well as the budget.

It’s been a relatively quiet asian market, with the Aussie rallying above parity. I do expect some volatility when Europe and the U.S open. Keep an eye on the news today on any updates from Libya and Japan. Also Trichet speaks today, so we may hear some comments today too.

Data Today

US Existing home sales – 2pm GMT

ECB Trichet speaks

Happy Trading!

FxTaurian

BOJ intervention this morning. G7 intervention ahead? Weaker yen?

Price action was fairly quiet during US session ahead of the G7 call on Japan. U.S initial jobless claims fell as expected and continued to signal an improving labor market. CPI rose as expected as well and the Philadelphia Fed manufacturing figure hit a high of 43.4. the G7 made a statement that they would monitor exchange markets closely and to cooperate as appropriate.

The Euro held strong during the European session due to the strong Spanish bond auction. It stayed firm overnight against the USD while the crosses were a whole different story.

USDJPY was quite range-bound yesterday during London and New York session. The massive move this morning upwards came about as G7 ministers agreed on a joint intervention and we saw BOJ intervening into the market. USDJPY spiked up 150 points on the move.

Aussie had a short movement on the downside when update on the UN Security Council vote emerged after the New York close. The vote went in favor of establishing a no-fly zone in Libya, which gives the go ahead for military intervention in the North African state.

After that massive move on yen, it’s been a little quiet. I’m hoping for a retracement on yen so that I can buy into it, as I do see USDJPY hitting 83 levels and maybe even 85!

Anyone managed to profit from that massive yen move?

Data Today

German PPI – 7am GMT

Eurozone trade balance – 9am GMT

Happy Trading!

FxTaurian

Japan nuclear headlines brings USDJPY to an all-time low!

All attention was on Japan again last night as the nuclear fear became stronger. USDJPY set an all-time low of 76.25 last night after continued headlines related to the nuclear reactors in Japan and when the EU’s energy said things are “out of control” in Japan and that there could be a catastrophe in a matter of hours. There was no sign of the BOJ as USDJPY rebounded to around 79.

Euro weakened as well during the flight to safe havens. Moody’s downgrade of Portugal by two-notches to A3, outlook negative brought the rating into line with S&P.

UK February claimant count came in better at -10.2k, and the unemployment rate was unchanged at 4.5%.

We do have quite a lot of data coming out tonite from the U.S. Overall it still looks like bearish market considering the Japan nuclear issue hasn’t been resolved yet. I do expect BOJ to intervene at some point, as USDJPY can’t remain so strong for Japan. It’s been an extremely difficult week to get trades in, a lot of the movement seems to happen when I’m not watching the market, and I am a little wary of placing market orders for new positions.

Data Today

US CPI – 12.30pm GMT

US initial jobless claims – 12.30pm GMT

US Industrial production – 1.15pm GMT

US Philadelphia Fed index – 2pm GMT

Happy Trading!

FxTaurian

All eyes are on Japan and FOMC rate decision tonight.

It was a relatively quiet US session with no economic data and no Fed speakers.

Attention was still on the situation in Japan.

Euro traded higher as ECB governing council member Bini-Smaghi continued to signal an imminent hike in interest rates.

Bank of Japan made no changes to the policy rate and the maximum size of the asset purchase facility was double to JPY 10 trn. S&P said the earthquake has no immediate impact on Japan’s sovereign rating and Moody’s said it is unlikely that the earthquake would affect Japan’s rating. However Moody’s said the quake may have hastened the point at which investors lose confidence in the public finances.

Sterling was boosted when Fitch affirmed the UK’s AAA rating, noting that the risks to the rating are reduced by a strong and credible fiscal consolidation program.

Things are still not looking that good in Japan with this whole fear of a nuclear meltdown. It’s quite scary and I do hope this nuclear situation gets resolved. We do have quite a lot of data tonight, and looks like markets are still quite volatile and risk averse.

Quite a difficult market at the moment, what do you think?

Data Today

Eurozone Employment – 10am GMT

German ZEW Survey – 10am GMT

Eurozone ZEW survey – 10am GMT

US Empire Manufacturing – 12.30pm GMT

US Import price index

US Net Long term TIC flows – 1pm GMT

US FOMC Rate Decision at 18.15 GMT

Happy Trading!

FxTaurian

Tragic Earthquake in Japan

Markets went a little haywire on Friday after the unfortunate earthquake in Japan. Price action was pretty much dominated by this news. USDJPY initially spiked higher when the earthquake first struck but faded towards the downside once trader’s realized repatriation flows will pull yen lower.

Euro gapped higher from NY close of 1.3910 to 1.3978. Euro zone leaders made a number of Euro positive announcements over the weekend. Leaders pledged to increase EFSF capacity to EUR440 bn, and agreed to lower interest rate charged on Greece’s rescue package.

JPY crosses collapsed as well as Japan retail segment sold aggressively and stop=losses triggered on the downside. BOJ is likely to prove 2,000 – 3,000 bn yen in funds through its market operations to soothe markets.

It’s going to be an interesting week, and I’m still watching the news closely over what’s happening in Japan with the nuclear problems. I’m praying for everyone in Japan to hold strong over this tough time.

Data Today

Eurozone Industrial Production - 10am GMT

Happy Trading!

FxTaurian

Update on the EUR/USD - trendline break on 1-hour chart

On the 1-hour chart you can see that the candle broke and closed below my yellow trend line. I placed a market order to sell EUR/USD at 1.3922.

I placed a stop-loss order at 1.3997 which is 10 pips above the previous high of 1.3987.

At 75 pips movement from my sell which is at 1.3847, I will move my stop-loss to break-even.

My profit target is at 150 pips away from my sell at 1.3772.

Trade strategy: EUR/USD trade strategy link

Happy Trading!

FxTaurian

BOE rate decision out tonight!

Currencies were mainly range-bound versus the dollar yesterday due to an absence of major US data releases and Fed speakers.

USDJPY continues to remain in a narrow range with a strong resistance at 83.50. Reuters reported Japan government officials are concerned about how oil price hikes; political developments will impact the economy.

Euro was range-bound as well due to a lack of news. 1.3860 remains as a strong support. Even though there seems to be a bullish sentiment over ECB’s possible rate hike next month, concerns over sovereign risk seems to be capping the Euro on the upside. We just saw Moody’s downgrade Spain rating to AA2.

The Aussie employment figures came out a lot weaker than consensus this morning which pulled the Aussie 30 points lower.  China’s trade balance figures pushed the Aussie even lower towards 1.0015 levels, as the numbers came out negative.

There’s quite a lot of data out tonight, specifically the BOE rate decision, where we could see some cable movement tonight.

Data Today

UK Industrial Output – 9.30am GMT

UK Manufacturing Output – 9.30am GMT

German trade balance – 7am GMT

Bank of England Rate Decision – 12pm GMT

US initial jobless claims – 1.30pm GMT

US trade balance – 1.30pm GMT

Happy Trading!

FxTaurian

Euro and Sterling Chart Art

Looking at the EUR/USD 4-hour chart there definitely looks like a strong uptrend going on!

If I zoom into the 1-hour chart, we see the yellow trendline and the 100 SMA(pink line) are coming close to the level 1.3930.

Here’s what I think; 1.3930 looks like a strong technical level that if broken could push EUR/USD lower or could become a strong support level.

I’m going to watch this level, if spot comes close to this level but a candle closes above it, I’ll buy EUR/USD. If a candle closes below this level I’d look to sell here.

  

Looking at the GBP/USD 4-hour chart we can see an upward channel holding up. Spot looks as though it’s coming close to the lower channel levels.

When I zoom into the 1-hour chart, 1.6147 looks like a support level to watch out for, and spot seems to be running lower at the moment so let’s see if this level gets supported.

Happy Trading!

FxTaurian

an extremely dull monday with some movement in Cable

As expected, it was a completely dull trading day yesterday! We did see a little bit of dollar strength against the sterling and Aussie.

The Euro was a bit of a bore as well. We did hear news yesterday of Moody’s downgrading Greece to B1 with a negative outlook, but didn’t really see the Euro reacting to it. 1.4020 seems to be holding up strongly here as we saw Euro push up but by the end of the session came down to 1.3970.

Cable on the other hand dropped to just below 1.6200. This slip was mainly due to an announcement that Ben Broadbent will replace Andrew Sentence on the MPC.

Again today, we’ve got a quiet line-up of data. So keep a watch for key technical points and ears open for any news that could move the market. Doesn’t seem like we will be seeing much action during the Asian session, so lets see what happens when Europe opens.

Data Today

German Factory Orders - 11am GMT

Happy Trading!

FxTaurian

Quiet start to the week!

Friday price action was pretty much dominated by the NFP and unemployment rate which came in line with consensus. NFP increased by 192k in February. Unemployment rate came down to 8.9%. Looks like this upturn may just be showing signs of US recovery.

Dollar weakened against the euro allowing the euro to break above 1.40.

EURGBP kept the sterling down as it failed to break through the 1.6340 resistance. This week market awaits the BOE rat decision.

Not much data out today, and the morning has been very quiet. Will see what happens when Europe and the U.S comes into play.

Data Today

US consumer credit – 8pm GMT

Happy Trading!

FxTaurian

It's Non-farm payroll time!

Whoa! Did you take a look at the Euro last night! ECB president Trichet fired up the Euro with his hawkish comments last night. Euro took out barriers last night at 1.3950 to a high of 1.3976. Trichet’s use of “strong vigilance could mean a rate hike next month” sparked the rise on the Euro. Economists are now looking for a 25bps hike at the meeting next month!!

The dollar managed to put in a mixed session on the back of its stronger jobless claims data. US nonmanufacturing ISM index rose up to 59.7 as well and we saw the dollar strengthen against the yen.

The USDJPY moved higher on the back of stronger US jobs data and we also saw the EURJPY run up by almost 2 big figures!

Our dear cable got crushed a little thanks to Euro, as a weaker than expected UK services survey and Trichet’s comments propelled the EURGBP higher by more than 100 pips! This also caused the GBPUSD to stay under pressure.

The Aussie too failed to club higher and struggled against the resistance level of 1.0200.

We have non-farm payroll tonight which could bring in some surprises. I’m going to keep it low until then.

Data Today

UK House Prices – 8am GMT

US unemployment rate – 1.30pm GMT

US Non-Farm payrolls – 1.30pm GMT

US factory orders - 3pm GMT

Happy Trading!

FxTaurian

ECB rate decision tonight!

The Fed’s latest beige book and the ADP employment data came out a little bit more optimistic. Fed Chairman Bernanke’s made a statement saying he would not rule of the possibility of a QE3 if conditions deteriorate though that is clearly not his expectation.

Euro rose to a high of 1.3890 last night on growing expectations on a rise in interest rates in the Eurozone before the United States. There’s talk of option related selling ahead of 1.3900. Eurozone PPI came out stronger and will add to the ECB’s inflation concerns. S&P has also said its ratings on Greece and Portugal remain on credit-watch negative.

Sterling rose to a 13-month high versus a weaker dollar on again interest rate rise expectations. The cable was helped by above forecast data from the UK construction sector as well.

This week has been a data-intensive week for the Aussie. It was a mixed bag this morning with the trade balance coming out better than expected but the building approvals came out worse.

Lots of data tonight! Keep a close watch on your trades!

Data Today

German Retail Sales – 7am GMT

German PMI services – 8.48am GMT

Eurozone Services PMI – 9am GMT

Eurozone GDP  - 10am GMT

ECB rate decision – 1.00pm GMT

ECB Trichet's speech – 1.30pm GMT

UK Services PMI -9.30am GMT

US Initial Jobless Claims - 1.30pm GMT

US Non-manufacturing ISM – 3pm GMT

EUR/JPY - cross trade strategy

I see an opportunity on the EUR/JPY cross today!

if i look at the daily chart, there is a strong resistance at 114 level.

when i zoom into the 4-hour chart we can see the EUR/JPY ranging between 114 - 112.

Here's what i plan to do:
I've placed a market order to sell EUR/JPY at 114.
Once that order gets triggered i'll place my stoploss and Take profit order.

lets see how this works out!

Cable and Euro climbing upwards!

Another mixed session for the dollar as it was weaker versus the cable and euro but strong against the yen. The Chicago PMI surprised to the upside yesterday whereas the pending home sales dropped more than consensus. Personal income increased for January, while personal spending decreased.

Euro moved higher towards 1.3860, but formed a double top around the 1.3850 level. Eurozone CPI came down slightly to -0.7 m/m and 2.3% y/y.

The Aussie followed the euro last night as equities made a comeback after profit-taking last week. RBA rate decision can in line with consensus with no changes in the rate.

Sterling too closed yesterday’s session at a high of 1.7279 and has been ranging between the 1.6270 and 1.6300 region (looks like a strong resistance here).

Data Today

UK Nationwide houseprice – 7am GMT

UK manufacturing PMI – 9.30 am GMT

Eurozone Manufacturing PMI – 9 am GMT

German Unemployment – 8.55am GMT

Eurozone CPI estimate – 10am GMT

US ISM Manufacturing PMI – 3pm GMT