Tuesday, January 5, 2016
On today, we continued to see traders rout into the safe haven trade, as concerns over China's manufacturing slowdown, and geo-political concerns from the Middle East continue to weigh heavily on investor sentiment. The EUR/USD resumed its tumble lower, after Eurozone CPI figures decelerated during December, only reporting growth at an annual pace of 0.2% y/y versus the forecast of 0.4% y/y. This disinflation in consumer prices caused the EUR/USD pair to fall 128 pips, from the session high at 1.0839 to the session low at 1.0711, where it found support for the day. Lower than expected eurozone inflation data will always support the idea of selling euros since the ECB (European Central Bank) will have to ease further this year.
During today's webinar, we analyzed price action in the EUR/USD, GBP/JPY, and identified areas of potential support & resistane that could serve as good points of trade entry. We entered a position to short the euro that resulted in a failed entry and loss of 2.5%. This trade was recorded in the webinar session.
At the moment of writing, the common currency recovered a small bit of its losses after hitting a 1-month low at 1.0711. The pair is currently in consolidation under the 1.0750 resistance, which is serving as a temporary cap for the day.
Tuesday, December 29, 2015
For the FINAL V.I.P. Trading Webinar of the year, we conducted a live presentation highlighting the major themes that will have an effect on currency prices in 2016.
Here is a list of these topics below:
1. Central Bank Divergence
2. The Political Factor (US Presidential Election)
3. El Niño/Weather Conditions
4. Oil Supply Glut & Disinflation
5. The China Factor
After this presentation, we analyzed the EUR/USD and USD/JPY pairs and provided a simple forecast on what traders should expect from these two currency pairs in the approaching year.
For today, the EUR/USD fell 93 pips after the US Advanced Goods Trade Balance for November widened from -58.41B to -60.5B, which was slightly better than the forecast or -60.9B. Also, the US Consumer Confidence indicator assisted in today's US dollar strength, after it submitted a report of 96.5 versus the forecast of 93.9 during the month of November. The low market participation and thin trading volume, contributed to the exaggeration in price moves and intra-day volatility.