@faithmight, Author at FaithMight

September 14, 2016September 14, 2016

Is She Baaaa-ack?

The new trading week is packed with market-moving economic releases out of the UK. Inflation, the UK jobs report and retail sales are all released ahead of the event risk of the week. The event risk of the week for the Great British pound is the BoE interest rate announcement. All of these releases will give a better picture of the British economy in the aftermath of the Brexit shock. It is very likely that these releases are more robust than the market expects. If so, the BoE will not have a reason to move on monetary policy this week causing the Great British pound to rally further. More sterling strength will allow the pound currency pairs to finish consolidation just as the summer doldrums have officially come to an end.

How shall we trade the GBP this week?

Well, we came into the week with a ton of GBP strength.

With CPI and regular wages both weaker than expected, inflation is not raging at all in the British economy.

Great Britain average earnings annual growth rates, seasonally adjusted. *Source: UK ONS*

The lack of inflation in wages, though still relatively high, will keep the BoE away from any tightening measures. Coupled with weak consumer prices, the BoE may signal a further loosening monetary policy this week. As such, the GBP strength that started the week is starting to fizzle as we get closer to the actual Bank of England announcement this week. The Friday close will be significant for direction sterling into the end of the year. The summer is officially over. Volatility and traders are back and with them a clear trend is likely to emerge.

September 7, 2016September 7, 2016

Australian Dollar On Fleek

The Australian dollar continues to rip higher with little regard for the Reserve Bank of Australia dovish sentiment. Though the RBA has cut interest rates and will likely cut again in 2017, the market is not blind to the fact that the Australian economy continues to remain robust. The RBA is bullish on the economy too. Australia survived the crash in commodity prices. Now that they are recovering, the GBP/AUD remains biased lower for a continuation of the large Fibonacci move (see Quid Report, Volume 58). The inability of the GBP/AUD to close above the 1.7500-level also signaled bearish price action. While the GBP/AUD now has the room to move lower on a continuation of the bear trend, the bullish divergence remains on the weekly chart. The bullish divergence signaled the rally higher back above the 1.7000-level. The rally this week saw the $GBPAUD move back to the top of the channel.

The event risk of the week for the Australian dollar was the RBA interest rate announcement. The RBA did not move on interest rates this week after surprisingly cutting interest rates in August. The $GBPAUD moved slightly higher on Australian dollar weakness after the announcement with no new highs printed. If the lower highs lead to a break of the 61.8% Fibonacci level on the 1-hour chart, this break lower signals a reversal back to the long-term lows at 1.6720. The interim target for sellers, however, is the lows at 1.7208. Only a move back above the trendline invalidate the current bearish bias.

September 2, 2016

Euro Finally Breaks Under Weight of ECB

Despite breaking to new highs now at 0.8724, momentum is still unable to match the new highs in price with new highs on the RSI. The $EURGBP moved lower off the highs last week but found support at the 50% Fibonacci level at 0.8486. With price moving lower off the new highs, the $EURGBP is biased to move lower as the new trading week gets underway. Despite the close above the key 0.8500-psychological level, the $EURGBP remains biased to the downside to start the new trading week. If the $EURGBP is unable to move above the 0.8600-resistance level, then it can be expected to move to new lows. A Friday close below the 0.8500-support level may invalidate the current bullish bias in the short-term and supports a deeper correction of the summer rally.

The European Central Bank (ECB) Governor Mario Draghi has made it clear that the path for future monetary policy action is further easing and accommodation. This dovish bias includes cutting interest rates again, as soon as September. However, contrary to these euro fundamentals, markets continue to buy euro. It is likely that September will be no different. In fact, the euro may accelerate its rally higher if the ECB fails to deliver this highly anticipated move to further accommodate monetary policy. The economic calendar is very busy out of the Eurozone this week. A slew of PMI data from the core European economies are due for release this week. The event risk of the week for the euro is the release of the German jobs data. As the strongest economy in the Eurozone, a weak jobs report may accelerate $EURGBP weakness.

OUTLOOK FOR THE WEEK: After breaking back below the channel last week, the $EURGBP has been unable to move higher. The trendline of the channel has acted as resistance capping the rally out of the Fibonacci buy zone on the weekly chart. Sellers step in on rallies back to the trendline… [subscribe]

August 25, 2016March 20, 2018

#TBT to #FuturesRadio

I made my debut with the famous Anthony Crudele on #FuturesRadio last month just ahead of the Junior Olympics. It was an extremely hectic time and I know all my fellow “soccer” [insert any sport] moms and dads can relate. So I never got the chance to share this great interview that I had the pleasure to do. It was great to meet Anthony. He has interviewed many of the great traders on Twitter that I follow and respect. So when he reached out to me, I was thrilled to be considered.

The feedback has been awesome. Thanks to everyone who listened and shared it. Thanks again to Anthony. THANK YOU!

Subscribers receive my research on all major GBP pairs at the beginning of the week, including access to @faithmightfx on Twitter for intraweek updates on the pound. AVAILABLE NOW.

June 16, 2016June 16, 2016

ON AIR with Benzinga’s #PreMarket Prep Show

As a sterling trader, I feel inundated by talks of the UK’s upcoming EU referendum vote. Well all forex traders have been feeling the fatigue of Brexit news that has besieged the markets especially when the calendar turned to June. Today is exactly one week from the imminent vote. My homegirl, @piptrain, put this request out into the universe.

Hello. I’d like to request a panel discussion to include @faithmight and @nictrades to talk about #BREXIT. Anyone? #GBP #EUR

— E Pluribus Unum (@piptrain) June 7, 2016

So when I got on air with the guys at Benzinga the next day, they toyed with hosting such a panel. In case it doesn’t materialize, hear my thoughts on Brexit and the effects I believe are in store for sterling and how we should trade it.

June 15, 2016June 15, 2016

USD Leaves Markets In Suspense

This is our look at cable ahead of the FOMC meeting:

As price met resistance in the zone between the 1.4750 and 1.4800 levels, momentum exhausted in like fashion to move into bearish territory. The U.S. dollar looks to accelerate weakness after another disappointing non-farm payrolls report was released last week. This weak jobs report should have been evident in the midst of all the weak U.S. economic data that had been released prior, namely the weak GDP number, the weak retail sales, the weak manufacturing numbers and the weak inflation numbers. The weight of evidence points to a weaker U.S. economy. Many market participants would begin to think that all of the weak economic data out of the U.S. would now start to weaken the U.S. dollar more substantially. If markets begin to sell the U.S. dollar en masse, the $GBPUSD will move back towards the 1.4769 highs for a break higher to the major 1.5000-psychological level. However, this will not be the scenario that plays out. The market will begin buying U.S. dollars in anticipation of an interest rate hike by the Federal Reserve later this year. The Friday close below the 1.4350-support level signals a move to the bottom of the range at 1.4000.

The event risk of the week for the U.S. dollar is the Federal Reserve monetary policy announcement. In response to the disappointing U.S. jobs reports, markets have already discounted this month’s Federal Reserve monetary policy meeting as a non-event. Rather, markets have begun to price in an interest rate hike at the July meeting. Market participants will, therefore, be keen to hear hints about a rate hike taking place either as soon as July or delayed further until December. Hawkish hints will trigger more dollar buying flows.

Premium trade setups with targets and stops are published in the GBP/USD Outlook for the Week in Volume 66, this week’s Quid Report.

June 2, 2016

ECB Keeps Euro Happy

This was our look at the EUR/GBP at the beginning of the week, ahead of the ECB:

The recent consolidation in the EUR/GBP was signaled by the bearish divergence at the highs. Now, the end of this move lower is being signaled by a bullish divergence at the lows on the RSI of the daily chart. The EUR/GBP starts the new trading week bouncing along the bottom of the buy zone. Buyers continue to keep price bid as momentum builds despite being in bearish territory. Though not a true bullish divergence because price is not at new lows on the daily chart, it is noted that momentum is no longer making new lows despite the new lows to 0.7564. This may be a nascent signal of bullish price action in this new trading week. Furthermore, after the move to 0.7564, the subsequent higher lows coinciding with building momentum on the RSI give the EUR/GBP a bullish bias. Despite the recently bearish price action, the EUR/GBP targets a move to the upside in the new trading week. A continuation of the rally is confirmed on a close above the key 0.7700 level.

Premium trade setups with targets and stops are published in the EUR/GBP Outlook for the Week in Volume 64, this week’s Quid Report.

May 30, 2016July 31, 2016

NEW: The Monday Morning Call

If you haven’t already noticed, Mondays are silent as the Quid Report is finalized for release later that day after the close. But the market doesn’t care what any of us have going on. And, very rarely does it develop in a way that could set off the entire week.

Sterling can move right at the beginning of the week when the forex market first opens. Big moves can happen at the Sunday/Monday open. Most times, though, sterling will retrace its market open move and trade right back to those opening levels you thought you missed. This often allows late and patient traders the opportunity to set up at those great price levels. So NEVER feel like you missed a trade on Monday.

But sometimes, there are opportunities that truly set up in the Monday session. The moves just keep going and going and you wish you got in at the Monday open. When sterling has the potential to move like that, I want you to know about it. My followers get these Monday morning calls.

Premium trade setups with targets and stops are published later in this week’s Quid Report.

Cheers to another week of life, peace, kindness and markets!

April 19, 2016

Cable is Breaking but Not Really

The U.S. dollar remains in consolidation after the past year’s rally. Now that the Federal Reserve has actually taken hawkish action, there is a possibility that the U.S. dollar weakens even in the face of a hawkish Federal Reserve. Therefore, the $GBPUSD remains bullish for as long as price remains above the 1.4000-level. However, as the $GBPUSD has attempted to move higher, price currently finds strong resistance at the 1.4500-level. While holding below the 1.4500-support level is actually a bearish signal for future price action, price has been unable to gain traction in either direction. The $GBPUSD has actually become rangebound between the 1.4500-resistance level and the 1.4000/50-support levels. As price action coils in this range, the $GBPUSD has actually found resistance within the greater range at the 1.4350-level. As the new trading week gets underway, there is no action to take whatsoever while the $GBPUSD trades within the range. Prudent traders wait for price to move to the range extremes before setting into action.

Premium trade setups with targets and stops are published in the GBP/USD Outlook for the Week in Volume 59, this week’s Quid Report.

April 18, 2016April 18, 2016

Remember, The Euro Is a Safe Haven

The $EURGBP has made new highs to 0.8117 after a four-month rally. Though this month could mark a fifth month, the rally might have finally reached a point of exhaustion. There is a very similar example of price action during the very beginnings of the financial crisis in 2007. A sharp move to the upside found resistance at 0.8100 and corrected as low as the 0.7700-support level. The next six months were spent rangebound in the zone between 0.7940 and 0.7860. This support zone also held up price action in 2014. During its descent in 2014, the $EURGBP loosely found support between the 0.7940 level and the 0.7860 level. Day-to-day price action was very choppy at that time too. There is good reason to believe this trend may see the start of consolidation last week. That might have been the end of consolidation too. Price has managed to find support at the 0.7940-support level, which is also the top of the support zone. While the move to new highs broke above the 0.8100-resistance level, the $EURGBP has already consolidated 38.2% of the last bullish wave of the rally. As a Fibonacci move on the $EURGBP, this is very bullish price action and signals a resumption of the rally in the new trading week.

Premium trade setups with targets and stops are published in the EUR/GBP Outlook for the Week in Volume 59, this week’s Quid Report.