12 minutes ago | October 30th, 2014 23:37:23 GMT

Forex Trading Education: Anticipating the forex story from the price action

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The EURUSD did not do what I thought the “fundamental story” was telling us today.

  • FOMC was more hawkish yesterday.
  • US GDP was higher.
  • German CPI was lower.

The textbook tells us that the EURUSD should have gone lower given that fundamental story.

It did not. Why?

There are many reasons from profit taking, to options expires, to month end/week end flows.  All of those “other stories” are probably true today, but will they be true tomorrow too?  Will there always be profit taking or will the price sometimes trend lower when similar fundamentals point to a lower EURUSD?

I have learned that those “other stories” are unreliable.  I need something else to believe.

In this forex trading education video, I explain and show how to anticipate the “other stories” that make you think “HMMM”.  It involves looking for key technical levels. How do you find those levels?  How do you prevent yourself from not hearing the “other stories”?

Listen in to my story and learn.

 

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19 minutes ago | October 30th, 2014 23:30:09 GMT

Japan National CPI for September: 3.2% (vs. expected 3.3%) plus the rest of the Japanese CPI data

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National CPI y/y for September,  3.2%

  • expected 3.3%, prior was 3.3%

National CPI y/y excluding Fresh Food for September,  3.0%

  • expected 3.0%, prior was 3.1%

National CPI excluding Food, Energy y/y for September,  2.3%

  • expected 2.2%, prior was 2.3%

Tokyo CPI y/y for October,  2.5%

  • expected 2.7%, prior was 2.9%

Tokyo CPI excluding Fresh Food y/y for October,  2.5%

  • expected 2.5%, prior was 2.6%

Tokyo CPI excluding Food, Energy y/y for October,  2.1%

  • expected 2.0%, prior was 2.0%

Other data from today is here: Japan data – household spending, jobless rate and job-to-applicant ratio

The core and core-core (i.e. CPI excluding Fresh Food and CPI excluding Food, Energy) have come in either on expectations

  • National core for September
  • and Tokyo city core in October CPI y/y)

or a tic above

  • For the national core-core measure for September
  • and for the Tokyo city core-core for October

Remember:

The Bank of Japan has estimated that the sales tax hike – to 8 percent from 5 percent on April 1 – added 1.7 percentage points to the annual consumer inflation rate in April, and 2.0 points from the following month.

So, we gotta subtract 2.0 points from these results. Not great, but at or slightly above expectations will give the administration and BOJ maybe some cheer. We’re around 1% … the target is 2%.

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Yen little changed on the data release

2 Comments

49 minutes ago | October 30th, 2014 23:00:08 GMT

What is China’s key impact on New Zealand?

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The Reserve Bank of New Zealand has published analytical notes on economic linkages between China and New Zealand.

Bloomberg reports:

  • New Zealand’s “most significant economic linkage to China” may be via terms of trade rather than direct trade channel
  • China has contributed both to higher export prices (demand increasing in China) and lower import prices (China’s increasing industrialisation) in New Zealand
  • “If Chinese growth were to slow markedly, demand for New Zealand’s exports may be relatively robust if consumption continues to grow, but demand for capital goods and industrial raw materials from the rest of the world could be expected to slow significantly”

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Here’s the link to the full RBNZ note

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1 hour ago | October 30th, 2014 22:47:23 GMT

Economic data due from Australia

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Coming up from Australia today, some lower-tier economic data … but it all goes in the mix.

Most focus is already turning to next Tuesday (November 4), the market is looking forward to a HUGE day drinking and watching the Melbourne Cup horse racc meeting …. errr … I mean soberly watching the RBA policy meeting.

At 0030GMT

Q3 PPI:

  • For the q/q, prior was -0.1%
  • For the y/y, prior was +2.3%

These figures only come out once a quarter in Australia

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Also, again at 0030GMT … Private Sector Credit m/m for July,

  • expected is +0.4%, prior was +0.4%

Private Sector Credit y/y for July,

  • expected is +5.3%, prior was 5.1%

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Yep, the November RBA meeting is a big day ... but not as big as the hangovers

Yep, the November RBA meeting is a big day … but not as big as the hangovers

 

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1 hour ago | October 30th, 2014 22:28:56 GMT

Yomiuri: Japan may prepare economic stimulus of 3 to 4 tln yen

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The Yomiuri Shimbun reports that Japan may prepare economic stimulus of 3 to 4 trillion yen

Headlines on Bloomberg

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The yen is already weak again this morning in the early going. USD/JPY within spitting distance of overnight higs, EUR/JPY just slightly below.

It’s a big day in Japan for data and the BOJ:

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1 hour ago | October 30th, 2014 22:25:06 GMT

AUD/USD & NZD/USD orders

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AUD/USD

  • Sellers 0.8850 and layers up to 0.8925, stop loss buyers notable above 0.8860, 0.8890 and 0.8950
  • Buyers 0.8800/10 then 0.8750/60, stop loss sellers gathering below 0.8745/50

Currently 0.8832

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I had some earlier levels on the kiwi, here:  Economic data due from New Zealand today – coming up real soon! And some early levels to watch

and then the big miss on building permits:  New Zealand September Building Consents (Permits): -12.2% m/m (vs. expected +1.0%) … sending the NZD a few tics lower

NZD/USD orderbook:

  • Sellers 0.7860 and layered up through 0.7910, some stops above 0.7870 then above 0.7900
  • Buyers 0.7800 then prevalent all the way down to 0.7700

Currently 0.7836

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1 hour ago | October 30th, 2014 21:55:10 GMT

EU, Russia, Ukraine signing gas supply accord

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A European Commission spokeswoman:

  • EU, Russia, Ukraine signing gas supply accord

Also, Russian Energy ministry confirms accord on winter gas supplies to Ukraine (that from RIA News Agency)

Headlines via Reuters

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Gas delivery secured to Ukraine through to March 2015

4 Comments

2 hours ago | October 30th, 2014 21:45:16 GMT

New Zealand September Building Consents (Permits): -12.2% m/m (vs. expected +1.0%)

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September Building Consents (also known as Building Permits) -12.2% m/m

  • expected +1.0%,
  • prior was flat at 0.0% m/m (while the trend is strong, the rate of growth is slowing)

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Yuck … NZD down a few pips on the announcement

Comment from Statistics New Zealand:

  • “The trend for new dwellings was previously at its highest level since August 2007. While it’s now easing, the trend is still about 10 percent higher than at the same time last year,” business indicators manager Neil Kelly said.
  • In September 2014, the seasonally adjusted number of new dwellings consented decreased by 12 percent. Excluding apartments, this number fell by 10 percent.

NZ building consents permits 31 October 2014

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2 hours ago | October 30th, 2014 21:33:18 GMT

Preview of the CPI data due from Japan today (and also of the BOJ due later)

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I did a Preview of the BOJ announcement due on 31 October 2014. And here is a preview of today’s CPI data due.

Prior to the BOJ announcement, there is a big bucket of data to be dropped on the market.

Today its all due at 2330GMT (a little earlier than the normal time we get data from Japan).

  • 2330GMT Overall Household Spending y/y for September, expected is -4.3%, prior was -4.7%
  • 2330GMT Jobless Rate for September, expected is 3.6%, prior was 3.5%
  • 2330GMT Job-To-Applicant Ratio for September, expected is 1.10, prior was 1.10
  • 2330GMT National CPI y/y for September, expected is 3.3%, prior was 3.3%
  • 2330GMT National CPI y/y excluding Fresh Food for September, expected is 3.0%, prior was 3.1%
  • 2330GMT National CPI excluding Food, Energy y/y for September, expected is 2.2%, prior was 2.3%
  • 2330GMT Tokyo CPI y/y for October, expected is 2.7%, prior was 2.9%
  • 2330GMT Tokyo CPI excluding Fresh Food y/y for October, expected is 2.5%, prior was 2.6%
  • 2330GMT Tokyo CPI excluding Food, Energy y/y for October, expected is 2.0%, prior was 2.0%

If you are looking at those prior CPI results and what is expected today you may well think that the BOJ has done its jon, easily hitting the 2% inflation target, and indeed exceeding it.

BUT … and I noted this earlier (and last month, and the month before that, and ….). Here it is again:

The Bank of Japan has estimated that the sales tax hike – to 8 percent from 5 percent on April 1 – added 1.7 percentage points to the annual consumer inflation rate in April, and 2.0 points from the following month.

I’ve also posted this recently … Useful chart from the Financial Times (FastFT – subscription required):

So, inflation is not at target, nor is it moving in the right direction.

BUT …  Note, this week we have had some better data from Japan:

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