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Tag: GBPNZD

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ON THE AIR with F.A.C.E.

The forex markets have been crap. And that’s just to say that for my trading style, I haven’t been able to trade much at all in the past several months. I know myself and I understand that the current market environment has not allowed me to trade my style. The major GBP pairs are all consolidating in the face of a now delayed Brexit, so there really hasn’t been much to do or say about the markets.

So I am thankful for the opportunity to make an appearance with Dale Pinkert and the Forex Analytix Community Experience (F.A.C.E.) during this time in the markets. I think it is important to share the ugly as well as the good in our process and to demonstrate that we don’t always make money at all times in trading. There are times when the best thing to do is really to do NO thing.

Enjoy!

If I can be of service to you, please do reach out. Happy trades!

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ON THE AIR with F.A.C.E.

For our first sterling chat of the year, Dale and I got right into my thoughts on Brexit given the upcoming vote in Parliament next week. Other highlights include:

  • What to do with those flash crash wicks?
  • USD weakness persisting but not gaining
  • Yen strength
  • Commodity currencies vs. GBP

Enjoy!

Mentioned: My 2019 Outlook (FaithMightFX)

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ON THE AIR with F.A.C.E.

I was back on F.A.C.E. early this month on July 5th to chat about the summer trends in the major GBP currency pairs. Since I didn’t post the video here on the blog at that time, I thought it would be an interesting and fun exercise to backtest some of the forecasts I made with Dale at that time.

I spoke about the current downtrend in the $GBPUSD which needed to move higher and close above 1.3350 to reverse the sentiment. Well, we got to 1.3350 last week but sellers came in swift to push the $GBPUSD to new 2018 lows at 1.2956.

At the top of the month, the $EURGBP, after being stuck in a tight range, had just broke above the key 0.8850 resistance level. I spoke about the potential for the $EURGBP to establish a new range between 0.8800 and 0.8950 depending on the market reaction to Brexit news and non-farm payrolls. This week, the $EURGBP reached 0.8950.

The $GBPJPY and the $GBPNZD moved exactly as expected off their failed lows and highs, respectively. The $GBPJPY did break above the major 148 resistance level to new highs last week. The $GBPNZD did break lower too but it moved 300 pips lower I than expected.

So all in all, not bad. Three out of 4 calls is actually quite excellent in this business.
 

 

 

There are ebbs and flows to every market. Trade what you see. Learn how. Or simply invest with a pro. [sponsored]

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Buy The Right Dollar

The $GBPNZD opened the new trading week challenging major support around the 1.8931 level. It even managed to crack below the staunch zone of support as the new trading week got underway. This support level has been challenged by the $GBPNZD numerous times in just the past 6 weeks. But if you look out to the daily chart, the 1.8931 level was also important support back in December 2017. As one of those old trading adages go,

“If price is knocking along a certain level long enough, eventually something gotta give”

This is an interesting time in market fundamentals. The markets are starting to pay more attention to interest rates. As political uncertainty increases, the markets seem to be reverting to the familiar: its relationship with interest rates. With one of the highest interest rates of the major currencies, the New Zealand dollar has been quietly finding buyers on every dip. Even as the Great British pound has found new strength against the Canadian and Australian dollars, it is has not enjoyed the same strength versus the New Zealand dollar.

gbpnzd 4 hour chart

Since the market opened this week, the $GBPNZD has bounced off this support zone to rally over 100 pips during the Monday trading session. Now that the $GBPNZD is back at the top of its range, kiwi buyers may step here. Watch for $GBPNZD range traders to also step in as 1.9080 has become a first level of resistance for rallies in the $GBPNZD. A break above 1.9080 opens the way to the resistance level at 1.9200.

However, as the fundamentals continue to favor the higher-yielding currencies, watch the $GBPNZD within this range. A final crack below the support zone, will introduce fresh buying momentum in the New Zealand dollar and usher in a deeper correction of the recent $GBPNZD rally (on the bigger timeframes).

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ON THE AIR with F.A.C.E.

Happy new year to the Forex Analytix team! This team of traders are experts and veterans in forex trading. Many of them I have been following for many years on Twitter (@nictrades, @spz_trader, @forexstophunter) and even before there was a Twitter (@pipczar). But the F.A.C.E. community is also full of many expert traders as well as new traders. So when I am asked to come on the show and discuss my views of the market, I consider it quite an honor. The respect, questions and great feedback I get from this team and audience makes it such pleasure to return.

Dale has such great timing as I made my first 2018 appearance on F.A.C.E. right before the Great British pound went on this monster breakout today. I revealed a few secrets that even Dale admitted he hadn’t heard from me before on his shows. The specific levels have been left far behind after Wednesday’s price action but the trading principles I discuss can be applied even now. Enjoy the show!

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The Commodity Dollars Signal

The market seems to be turning higher for the commodity dollars (comm dolls), which is inline with the recent price action in commodities. Commodities, like copper, oil, and gold, have been generally rangebound in 2017 following the significant downtrends that started in 2011. During that downtrend in commodities, markets have been operating on loose monetary policy based on the flow of funds from central bank balance sheets and ultra-low interest rates. Now these fundamentals are shifting with balance sheet reductions, interest rate hikes and increasing hawkish central bank sentiment around the globe. With the fundamentals transitioning from one psychological paradigm to another one, increased volatility and choppy price action may start to creep back into the markets.

GBPCAD 4 HOUR CHART

There have been no summer doldrums in the forex markets. Starting with the Canadian dollar, the Bank of Canada (BoC) completely surprised markets last month with an interest rate hike. The start of monetary tightening in Canada now gives the CAD fundamental support for the rally that has taken place for much of this year already. So the correction this week just ahead of the Bank of England (BoE) interest rate announcement this Thursday, was a fantastic opportunity to buy Canadian dollars versus the Great British pound. The corrective rally moved right into the 61.8% Fibonacci level giving a level of risk reward that worked well for sellers ahead of the UK Super Thursday news event. The BoE was more dovish than the market expected as it cut its inflation and economic growth forecasts amongst calls for gradual rate increases. This divergence in monetary policy between Canada and Great Britain may see the $GBPCAD move to new lows.

GBPAUD 4 HOUR CHART

The Reserve Bank of Australia (RBA) released their monetary policy statement this week too. While the RBA is hawkish on the Australian economy, they remain adamant that accommodative monetary policy must remain for that growth to continue. As such, the RBA will likely not move on interest rates at all this year. But neither will the BoE. If this remains the case, the interest rate differential and the divergence in economies should continue to underpin the Australian dollar against the Great British pound.

GBPNZD 4 HOUR CHART

The $GBPNZD was trading in a wide range while we saw the aforementioned breakdowns in the $GBPCAD and $GBPAUD. The $GBPNZD finally joined suit and fell to new lows at the 1.7400 support level. But the $GBPNZD staged a major correction this week that actually saw price move back to the top of the former trading range above the 1.7900 level just before the BoE announcement. While this complete reversal higher seems like bullish price action, hindsight reveals another fantastic sell opportunity post BoE.

So now that the selling opportunities have presented themselves, can the commodity dollars continue to strengthen against the pound? There is another factor at play here that we have not yet touched upon – the weakening U.S. dollar. A weak dollar boosts most commodities since they are priced in U.S. dollars. Higher commodity prices should bolster the commodity dollars higher as well. But this is no guarantee. So take care with your trades. It’s going to be a choppy month with the occasional bursts of volatility as markets ready for full throttle trading come September. Be patient and take advantage of the setups, like these, when they come.

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ON AIR with F.A.C.E

I spend every Sunday with students looking at markets for the upcoming trading week. So I was happy to share this week’s insights with Dale Pinkert this morning of the Forex Analytix Community Experience (F.A.CE.). While F.A.C.E. may be a new community, Dale certainly is not. He is an expert trader who has great experience interviewing the best personalities and experts in the business. So it is always an honor to be asked to discuss my views on markets. The nugget I dropped today that Dale really liked:

Correlations are shot. There are no correlations right now in the market.

What do I mean? Watch my interview and market review to find out.

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The Youth vs. The Market

Now that the markets have opened after the week that ended in a hung parliament, I, a mere trader, can now make exclaim,

Theresa May made the biggest mistake of her short tenure as prime minister. FULL STOP.

She completely discounted the voice and vote of the youth. Since the June 23rd referendum vote, it was clear that young British voters in no way approved of a Brexit. But they didn’t vote. Or so it was reported. In my mind, as a disgusted Democratic sitting in California, why would the Prime Minister ever give the citizenry an election so soon after she stepped into office? Americans are waiting excruciatingly for the 2018 midterm elections. Can you imagine trump ever declaring a snap election to prove a point? We could only hope. But I digress. Back to Great Britain. As the market rallied in anticipation of the election, I thought it was market cheer for a new change in Parliament. Surely, folks would oust the party that campaigned for and got their Brexit. The youth were not going to make this mistake twice.

And that’s exactly what they did. The Party of Brexit lost its majority hold. And the voters gave that majority to NO ONE. Fucking brilliant. If Prime Minister May was truly engaged with the public, she would’ve never declared that snap election. She counted on increased apathy to secure a mandate for Brexit. And as such, her party not only lost their Parliamentary majority, nobody won the majority. And the hung parliament just completely changed the fundamental landscape for the Great British pound.

For access to the technical analysis, you must be a member. Join.

 

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Don’t be Pound Foolish

The new trading week has been very busy out of the UK this week. Inflation may be heating up in both regular pay wages and consumer prices. Perhaps the accelerated weakness in the Great British pound may start to feed inflation as the increasing price of imports may be passed on to consumers. Additionally, the low exchange rate may also forces companies to raise wages to keep up with this rising price of goods and services. The PMI numbers that had trended below the 50.0-threshold level earlier in the year have started to recover. The October releases revealed robust PMI numbers in all sectors of the economy. It will be interesting if this recovery in the PMI numbers this month will persist. If so, building strength may allow the Great British pound downtrend to finally correct in the short-term. Any strength in sterling, however, is expected to be temporary.

After weeks of decline and new, multi-year lows, the Great British pound has staged a correction. Depending on your chart, it has been impressive and not so impressive all at the same time. But it has been a correction nonetheless. And it has allowed swing traders to reset short positions as currency pairs like the $GBPNZD and $GBPUSD trade at essentially all-time, low levels.

GBPNZD DAILY CHART

This Friday close is the third consecutive weekly close below the major 1.7702-support level. This is the first time there have been consecutive bearish closes below the 1.7702-level on any timeframe (Volume 79). However, with building bullish momentum on the RSI of the daily chart, the $GBPNZD may stage a correction off the lows. The failed low of last week also signals a bullish move higher.

The highs this week have not been able to get quite as high at the Fibonacci levels. And that failure is actually evidence of the strong bear trend in the $GBPNZD.

GBPUSD DAILY CHART

The $GBPUSD currently trades at levels not seen since 1985. As such, there is very little technical support at these price levels. However, the $GBPUSD has started to forge out minor support at the 1.2160, 1.2154 and 1.2132 levels. This support zone seems to have stalled selling in cable for the time being. Without a close below the 1.2000-psychological level, the $GBPUSD begins to build bullish sentiment in the very short-term.

Cable has been coiling between the 1.2350 and 1.2100 levels since the flash crash. While the defense of those 1.2089 lows this week emboldened bulls, it has not been enough to spark a rally to the psychological level at 1.2500. This failure keeps the $GBPUSD bearish despite the rally off the new lows this week.

All in all, sellers continue to show up at the highs. The rally has totally underwhelmed. Only against the JPY has the correction moved as high as expected. While there could be an argument that Brexit woes and implications are already priced into the market, price action seems to indicate otherwise. With these currency pairs trading at these low levels, the GBP has the certain potential to move lower still…until it doesn’t. Be careful out there. Don’t chase the price action!

All quotes and charts taken from this week’s Quid Report, Volume 82. Full report has trade setups and includes more currency pairs.

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I Survived the Flash Crash

The GBP just crashed in epic proportions. The official number is -5% in 2 minutes and 3 seconds.

GBPUSD 15 MINUTE CHART

It is already being called a flash crash because of the sheer scale of it. And the craziest thing about it is that we were on the right side of it. The following quote is from this week’s Quid Report (Volume 79):

The follow-through lower already this week proves correct the assertion in Volume 76 – that the resumption of the long-term downtrend that is the Great British pound has indeed taken place…It is very likely that this bear trend is the direction sterling trades for the remainder of the calendar year.

The rest of the report this week goes on to outline the setups that took place at the beginning of this week. Most of the targets had been hit before the flash crash except for two trades. These positions are up HUGE.  I haven’t seen this much money on a single trade in a long time.

I SURVIVED THE FLASH CRASH….

So I immediately issued a tweet to all Quid Report readers. This is not verbatim but it was definitely to this effect:

keep calm and carry on

If you were short the GBP ahead of this flash crash – GOOD FOR YOU! KUDOS! How you manage this trade is up to you. But no one will blame you if you close out these positions for all this big money. Taking big profits is the name of the game!

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