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Trader's Library: Quantitative Easing in 5 minutes

A hilariously funny video that explains not only QE, but most of the key-economic indicators and their inter-relationship.

Please note this video doesn't express my opinion and it should be regarded from an educational perspective only.
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NZD/USD technicals deteriorated

Monthly chart:
The pair has busted 100 month SMA, 38.2% retracement of 2009 to 2011 rally and the low of the 2011 - 2014 trading range around 0.7350. Besides strong technical breakout, RBNZ has just changed its stance from hawkish to neutral. Further losses are expected and 50.0% retracement (of 2009 to 2011 rally) at 0.6868 is the first strong support level ahead of 200 month SMA.
Weekly chart:
Having broken from 0.7600 - 0.8050 range, there is potential to at least 0.72 initially, then 0.70. O…
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al_dcdemo avatar

The pair closely followed Aussie on Tuesday in both directions and performed the reversal part in even stronger fashion. Although RBNZ dropped its hawkish bias and reaffirmed their view of overvalued currency, yields are still very attractive compared to other major currencies. There is shorter-term scope to retest the bottom of the Q4 2014 consolidation, which coincides with 61.8% retracement of the January 15 2015 to February 3 2015 decline.

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al_dcdemo 15 Feb.

In a bout of weaker Dollar, Kiwi benefited the most. The pattern was similar to that in other major pairs, sideways action in the first part of the week and then reversing sharply higher on Thursday. It closed the week just below prior week's high around 0.7450. This 0.7450 - 0.7500 resistance zone will need to be broken on a holding basis to signal that this is something more than just a normal pullback.

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al_dcdemo 22 Feb.

After it broke above 0.7450 - 0.7500 resistance zone early in the week, the pair has been confined to a less than 100 pip range for the rest of the week. It topped around 0.7570 on Wednesday after dovish FOMC Minutes. 50 DMA, 0.75 level and the bottom of the previous range at 0.7615 may provide enough supply for the pair if it wants to continue lower.

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USDJPY gains on the back of further easing from BOJ

The pair has seen a significant jump to close out the month as the BOJ have announced further measures in easing.
Although the pair is quite overbought as the annoucement came as a surprise (expectation was for the annoucement to come in Dec). Any form of dips will be bought on the pair.
Levels
109.87 - Previous High
113.95 - Weekly Support / Resistance
115.00 - Major Psychological level
115.93 - Fib expansion / Resistance
First chart simply shows a bollinger band breakout with a clear contracti…
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Jignesh 5 Nov.

After gapping higher to start the week, the USDJPY has continued full speed ahead with it's bullish momentum.  In fact, we are hovering around the monthly targets only a few days into the month.  Some of the other Yen Pairs are signalling a possible pull back.  For now 115 should offer an area of profit taking, but the potential this month to take out the targets for higher is a viable option.

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Jignesh 10 Nov.

The pair made a high at 150.50 last week, which was not a level I was watching nor included in the analysis.  So far we've broken through the 1H trendline (from start of week).  Major resistance for the pair this week will be the 115 target price.  With some signals of USD weakness to end the past week we may see the pair pulling back towards 114 - 114.2

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Jignesh 17 Nov.

CORRECTION: the previous comment was meant to read a high of 115.50 not 150.50

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Jignesh 17 Nov.

After touching highs at 117.05 last week, the pair has started on a bearish tone on the back of a JPY risk event to start the week.  Currently the previous high area, and 50% of the last leg up confluences at 115.46-115.50.  This area can offer some intern support.  A break of this level will expose the monthly target level 115 which will also be support.  The USD is largely looking like it has been an intern top and targets are looking very likely for this pair.

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Jignesh 25 Nov.

The pair is in a strong breakout and continues to post highs week after week.  The next main level of reistance will come at 120

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Yen Pairs Fall as BOJ Unexpectedly Announces New Easing

The yen got sold across the board as the Bank of Japan announced new easing steps. With a vote of 5-4 the Bank raised its bond buying program from 70 to 80 trillion. The BOJ also trippled its ETF buying to 3 trillion yen. The move was unexpected and it's no wonder the result is a massive selloff in the yen pairs.
I managed to take a small slice of the move, +36 pips on the GBP/JPY, +22 on the USD/JPY, +21 pips on the EUR?/JPY and +32 on the AUD/JPY. I also took some small GBP/JPY scalps that end…
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Previous Week in Summary


This past week we saw some big move developments and was a very busy week for the markets and the euro pairs generating the most interest. The past week risk events have been also generating some volatility which over the past weeks was hitting new lows.
First we have ECB which as expected has delivered and backed up Mario Draghi's words. Although ECB has introduced more easing than expected EUR/USD reaction took many by surprise. But this only add to t…
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EUR/USD Long Term View

Last time I've spoke about EUR/USD was on my latest webinar, that I had to do after coming in the second place in Article contest, and I spoke in more details about the chart I posted in this blog post: FED tappers Effect
Although the chart I posted suggested you should go long EUR/USD, the trade was only good for 100 pips, but on my webinar I've said that we also need a weekly close above 1.3800 which we have not, so that trade was invalidated but still you could have made 100 pips.
Also , my s…
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Metal_Mind avatar

Uuuuu.....this is one comprehensive analysis. Well it definatly looks hard for the euro to break the barier.

Metal_Mind avatar

The us dollar index  looks almost to good to be true...but who know, i will definatly keep it on my radar waiting for the big move. Thanks buddy for the great insights.

Daytrader21 avatar

Thanks buddy, you're right timing is very important on this one

Berkeley avatar
Berkeley 7 Apr.

I can't get enough from your blog posts! Impressive work here!

Daytrader21 avatar

Berkeley you da man, Thanks for your good words.

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Preparing the week ahead


Last week was definitely hot in terms on high risk events as on one hand we had the ECB monetary policy and on the other hand we had NFP figures which saw 3 straight monthly increases in the labor market, and S&P500 hitting a new all time high. The fact that ECB has not acted on the deflationary pressures is becoming an increasingly bigger threat to EU zone this puts a higher risk on the upcoming inflation figures from different countries withing EU zone that are abo…
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Convallium avatar

interesting post as always! )

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ECB Monetary Policy Statement

This is definitely the most awaited ECB meeting since awhile. After weaker EU inflation reading, the CPI figures came in worse than expected at 4 years low, at 0.5% and is well below the ECB's 2% target. Although ECB may feel some pressure as inflation hits new lows, I'm not sure if ECB is going to easing or not as there is no clear view if they are
ready to act and tame down deflationary pressure.
ECB is pretty stationary when it comes to the perception of his monetary policy standing.

A…
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Convallium avatar

            You always write good and useful things! thank you, Daytrader21!

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Preparing the Week Ahead


Not only the market it can become very sensitive to the current geopolitical event which is Ukraine, but next week the economic calendar is very hot as we have the FED monetary policy announcement and the Fed peace of MBS and Treasury purchase program. Don't be fooled that recent event like the EM crisis or this geopolitical event can interfere with tapering, FED tapering is already on autopilot and we should see further $10B/meeting reduction in assets purchase and we should see Fed moving fur…
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Convallium avatar
Convallium 16 Mar.

Great blog post!  We should always plan our deal if we want to have profit)

Daytrader21 avatar

Convallium true, trading is all about preparation and execution.

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Convallium 16 Mar.

Thank you, Daytrader21, I will use it on this week)

jezz avatar
jezz 16 Mar.

I'm not sure if Draghi can help. His statements are... without authority, to be gentle. The overall negative exchanges between US and Russia are not helping USD at all. If I were Chinese, I would buy the dollar now :P

Convallium avatar
Convallium 16 Mar.

Thank you, Jezz ,for your vision)  I also try to operate with Chinese and USD)

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