Tagged "interest rates"

12-17-09

Email update: Server upgrade for signals is complete, but it has to be phased in for reasons out of my control so about half of you should have received an email letting you know there was a new signal, and about half of you didn’t receive anything. Almost everyone should get tomorrow’s signal and everything will be working smoothly by this weekend I promise :).

4:40a GMT – If you braved the news the yesterday’s signal yielded you good pips – no matter which trading idea you used (sell at 1.4580-1.4600 or sell on break of rising support) all targets would have been hit for over 100 pips. I did open 1 short on the initial jump to 1.4580 and took profit on first lot but second was stopped out at break even for no profit/loss.

Dollar gained heavily against the Euro yesterday, establishing a new low of the quarter amidst Bernanke’s words that the job situation was stabilizing. Traders see job data as the key factor in determining when the Fed will begin raising interest rates, and coupled with the positive non-farm payroll data from a week ago this makes rate hikes much more likely in the early part of 2010. Does this mean the dollar will continue gaining until next year? Of course not. The market will attempt to find a ‘fair value’ price for the pair. And in that fair value the Euro has the advantage because its interest rate is already higher than the dollar’s.

Daily Outlook: I am bearish below 1.4600 and will look for good areas to short around Fibonacci levels.  I expect to see a pattern similar to what we have seen over the past week where we have a long bearish flagpole followed by hours of bullish consolidation. As I mentioned before I am conservative in these thin-markets before the end of the year, so if I miss a trade there will always be another one.

Trading Idea: Shorts preferred below 1.4600, looking first at 61.8% fibonacci retracement around 1.4500. From this level short targets are 1.4455, 1.4420 and 1.4385. If 1.4500 is broken to the upside look for a re-challenge of 1.4600.

(click to enlarge)

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6-5-08

18:35p GMT – After the ECB’s announcement that the European Central Bank may actual raise rates by the end of the month the markets are looking for direction. It seems a shift is coming but theories abound as to which way that shift will go. The US signaled it will raise rates by the end of the year, NZ signaled it would start lowering rates during 2008 and ECB will possibly raise.

Meanwhile news out of the US economy is mixed at best.

Some argue we are at the beginning of the end of the worst in the US economy while Europe is just starting to have the bad news come out, especially in UK. The data coming out in the next month will help to determine the direction of these pairs. In the short-term, it seems the higher rates of the Euro and near-future hawkish raises could happen much sooner than a USD rate hike probably means further Euro strength against the greenback.

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6-4-08

21:57 GMT – RBNZ signalled that they would begin lowering interest rates by the end of the year to combat a softening economy. With Bernanke of the Fed signalling a stop or even a raise of interest rates by the end of ’08 look for the NZ to continue to weaken against the USD as “smart money” (big banks using carry trades) begin to pull out of this pair in favor of more stable pairs. This could be the start of a downtrend in this pair for a few years.

After the announcement the pair immediately dropped over 100 pips to .7700

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