9 hours ago | September 19th, 2014 17:56:45 GMT

All the talk this week was about the Fed, ECB, SNB and Scotland. So where was the best trade? None of those places

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Sleepy Canada and slumpy Japan was the Friday-to-Friday forex trade this week.

FX performance versus USD this week

FX performance versus USD this week

The best trade this week was buying CAD/JPY. What’s next?

The Canadian dollar was the leader while the yen lagged. All the focus was on the Fed decision, ECB TLTRO, Scottish referendum and the SNB decision but these were the headlines that mattered:

  • PBOC pumping 500bn yuan through SLF to top 5 banks
  • Poloz getting optimistic on Canada
  • Japan to lower economic estimate (they followed through today)

The Canadian CPI numbers today gave the loonie a final flourish but it’s since evaporated.

What’s the lesson in this?

If you strip out all the volatility, hype and headlines it’s all about growth. The Bank of Canada talked about better growth and Japan warned about slower growth.

What’s next? There’s a doji shaping up on a few Canadian dollar charts today and the hype-train in the stock market is looking a little overdone. I worry about a slide in risk trades so I’d take profits on CAD/JPY longs and look for some downside.

(Warning: tire pumping ahead) I’ve been touting CAD/JPY longs since they broke out.

3 Comments

10 hours ago | September 19th, 2014 17:21:39 GMT

The first European referendum was so much fun they’re planning a sequel

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There hasn’t been this much demand for a sequel since The Hangover (shame how that one worked out).

Catalonia is having a referendum on November 9.

Ok, the referendum in  Spain was already planned. The question is: Will it go ahead?

The Spanish government has promised to block the planned referendum but from a practical perspective, that sounds like a tough chore. I mean, how do you block a vote? With tanks?

In any case, the Catalan parliament approved the legal framework for the succession vote today so it’s moving ahead.

1 Comment

10 hours ago | September 19th, 2014 17:03:01 GMT

USDCAD Technical Update: Lap completed and the Loonie takes the checkered flag

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A full lap has been completed. ARRR… I want to take a VICTORY LAP (see http://www.forexlive.com/blog/2014/09/19/its-international-talk-like-a-pirate-day-heres-how-to-trade-like-a-pirate/ )

The USDCAD tested topside channel trend line, moved down to the lower trend line and now has crossed the finish line by kissing the topside trend line again. I repeat.. you gotta love USDCAD to trade USDCAD (or be Canadian –  like Adam).  SEE PRIOR POST.

“Let’s do some driving, Lucius.”

PS This is not a solicitation to do a deal. We are in the last lap of the trading day

You have to be loonie to trade the loonie.

You have to be loonie to trade the loonie.

5 Comments

11 hours ago | September 19th, 2014 16:20:40 GMT

Australian dollar breaks support, hits lowest since March

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AUD/USD is at six-month low as risk trades being to sour.

The positive catalysts in a No vote, the Fed and the Alibaba IPO are out of the way and now the market is left asking — what’s next?

AUDUSD 10 minute chart

AUDUSD 10 minute chart

There is some support at the 0.8900 and 0.8891 level so the short-term downside might be limited. That also represents the measure target of the break of the March-August range.

14 Comments

11 hours ago | September 19th, 2014 16:20:26 GMT

The beast is alive. Alibaba opens at 92.70, but can it be tamed

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No  it is too soon to make a technical opinion on the stock.

 

I will ride the BABA if I can tame it first.  To do it, I need to define my risk

I will ride the BABA if I can tame it first. To do it, I need to define my risk

In reality this is the worst time to trade a stock.

Traders in the stock are driving  blind as risk can not be defined.

Sure analysts can make judgments on the value vs. the revenue. They can compare it to other companies in the genre. They can speculate that in 5 years it will likely double which is a pretty good return on an annualized basis.

But why did they value it at $68 and it is now at $92.70?  What if it goes back to the IPO price first?   What will traders/investors feel like then?  Will all the buyers at $95 and $98 feel good?  Probably not.

For me, the picture (i.e., chart)  where I can put a line on it, or a moving average of 100 or 200 hours. A picture that has some history of days, where I can see where buyers came in, or sellers sold.  Those are more important to me.  They allow me to tame the savage beast and judging from the first few minutes of trading, BABA is a beast.

I don’t mess with a beast unless I can tame it.

2 Comments

11 hours ago | September 19th, 2014 16:16:24 GMT

Prices delicately poised as the week draws to a close

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It’s been a roller coaster of a ride this week and as we approach the end of it the greenback looks wanted, but there’s some key levels still to be breached as we’ve been highlighting in this session

So, on that note I’m going to leave you in Adam and Greg’s masterful hands and wish you all a great week-end. Make sure you find time to turn off your screens and chill.

This welcome return of a degree of volatility ( it’s all relative when you’re an ol’ git like me!) won’t be going away anytime soon so if this week wasn’t one of your best, fret not. Just learn from any mistakes, dust yourself down and look for another opportunity, because there will be many more coming along

Thanks for all your great input and banter again this week and I hope we’ve helped navigate you through the jungle along the way.

Enjoy

4 Comments

12 hours ago | September 19th, 2014 15:14:25 GMT

Technical Analysis Update: USDJPY squeezes a bit higher, but peak finds sellers

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The earlier post asked for patience, and to watch the underside of the broken trend line (see post here)

The good technical news….

Are the patient sellers keeping the lid on it?

Are the patient sellers keeping the lid on it?

The not so good technical news..

The intraday sellers did not have not been as anxious as I hoped.

The intraday sellers did not have not been as anxious as I hoped.

The market is moving toward the London close so the patient short trade will need to see the price move lower to take on the weekend risk. Otherwise, will revisit the idea that a high is in place on Monday.

 

10 Comments

12 hours ago | September 19th, 2014 15:13:15 GMT

Salmond calls it a day as Scotland’s First Minister

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  • Scottish National Party leader announces he’s stepping down in November from leadership of the party and as Scotland’s First Minister

If at first you don’t succeed, give up

Just kidding all you Yes voters out there. I know he’s been championing the cause for years but nonetheless the timing of his announcement is a little strange when, despite losing the battle, he has certainly moved lines forward in the war.

I guess he thinks the movement needs new legs. We’ll find out when we get more detail

Update:

Salmond says

For me as leader my time is nearly over but for Scotland the campaign continues and the dream shall never die

I have no intention of retiring from Scottish politics – there are a large number of things you are able to do when you’re not first minister or leader of a political party

I had to make a judgement as to whether I’m best placed to take that opportunity forward – and I think others are.And the party I’m sure will make a wise choice and take party and country forward. The most important thing is not about First Minister

The Beeb has more here

Damn, those Russian bombers failing left me no choice . Freeeeeeeeeedom!

Damn, those Russian bombers failing left me no choice . Freeeeeeeeeedom!

2 Comments

12 hours ago | September 19th, 2014 15:02:11 GMT

Talk the first trade in Alibaba is about 30 minutes away

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The whole market is swept up in the Alibaba CNBC hype-fest at the moment.

The latest chatter on the opening price is $88-$94 — which is a cool 38% premium at the top end for those lucky enough to get the $68 IPO.

This has the potential to be an incredible intraday pump and dump. If it opens above $90, a $100 trade today is virtually in the bag.

With the fast money focused on this, there is a risk that broader risk takes a dip.

5 Comments

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