UK Retail Sales in 2 Hours

 Posted by at 3:19 PM  FX Market
Feb 202020
 

We will be having UK retail sales announcement at 530pm (+8GMT). Analysts’ forecast is at 0.7%.

Trade idea is simple.

A higher than expected result may drive GBP up. If so, I will sell GBP against USD.
A lower than expected result may drive GBP down. If so, I will buy GBP against AUD.

Take away should be around 0.30 to 0.50% move.

Brent Yesterday

 Posted by at 10:59 AM  FX Market
Feb 192020
 

We saw a huge 2+% drop on oil yesterday. AUDJPY dipped 0.6% as well. It was fear at work. But somehow the market just bought them back up near midday.

I thought that the more Brent went up, the lesser the possibility of an emergency supply cut will be implemented because OPEC will not see the need for them to act.

Given the price action, Brent seems to have priced-in the full effect of the COVID-19 outbreak. The number of new infected cases start to trim down. The threat of COVID-19 seems to have decreased.

Now, we should reassess what are the events forthcoming that would affect movement.

Possible reasons pushing oil up:
– OPEC+ decides to prolong supply cut beyond end of March – during March 5 meeting
– OPEC+ decides for deeper cuts – during March 5 meeting
– COVID-19 is under control and travel bans are being lifted
– China goes back to normal operation
– Middle east tension escalates

Possible reasons pulling down oil:
– Libyan conflict resolution
– Oil’s price increase beyond 60 will keep OPEC+ from intervening

It seems that as of now, the price of oil is more bullish. 60 and beyond might turn it bearish as it will keep OPEC+ from intervening.

On the flip side, any drop on oil price seems like a chance to buy.

Thoughts on the Week Ahead

 Posted by at 12:17 AM  FX Market
Feb 162020
 

Equities market has been shrugging off COVID-19 fears this past week. This is market greed at work. The asset injection by the PBOC is helping fuel this greed. There are 2 ways of looking at this. It’s either the market is trying to trap more investors at the top or the recent drop was already enough to price-in the impact of the COVID-19. Either way, we can expect some sell offs to continue as the recent rally seems to be over done.

I continue to be bearish on risky currencies AUD, NZD and CAD for the short-term. EUR is fundamentally bearish because of the ECB. GBP will have its down days caused by uncertainties in securing a deal with the EU. However, it can act as safe haven when paired with risky commodity currencies.

USD, CHF and JPY will continue to act as safe haven for the next 4-6 weeks.

For oil, I am anticipating 2 events that has yet to unfold. One is for Russia to decide if they will cut oil production that has a short to medium term impact to pushing price higher, perhaps Brent @62 +/-2.00. Second is when Libya resolves her conflict and start oil production again that could cause a short-term sell off, perhaps Brent @56 +/-2.00.

The tricky part is we don’t know which event could happen first. OPEC+ plans to meet earlier than the scheduled March 5 meeting. If they meet in the coming weeks, then it justifies the current technical rally on oil. If Russia decides to cut output, then it might just be sell on news scenario.

If Libya resolves conflict ahead of the OPEC meeting, we might see oil price drop for a while but rebound in anticipation to production cuts by OPEC+.

Brent Oil Short

 Posted by at 11:00 AM  FX Market
Feb 122020
 

Technical Levels
58.00 level is confluence of fibonacci numbers – 23.6, 38.2 and 61.8. It is a role reversal resistance as well.

Fundamental Catalyst:
– Corona Virus fears
– Indecisive OPEC and OPEC+ supply cuts
– US continuous production of oil

Headwinds to Short Position:
– Continuing Libyan conflict
– Any Middle East tension

Speculative Catalyst:
– Resolution to Libyan conflict. Libya is losing money with the current situation. If they resolve and decide to continue oil production, supply of oil will go up, pressing price down.



Brent Oil Short by traderh on TradingView.com

AUDUSD Short

 Posted by at 4:46 PM  FX Market
Feb 042020
 

Short 73.4 or 74, TP 71.7 to 69.00

Fundamental Catalyst:
– Coronavirus global epidemic affecting China growth and Global growth
– Uncertainty of China fulfilling her phase 1 trade deal with US
– Phase 2 deal won’t happen until after US elections
– Rate cutting for RBA is still on the table
– Australian bush fires would have some economic impact

Possible Headwinds:
– BOJ easing is always a probability
– Finding a cure for Coronavirus



AUDJPY Short by traderh on TradingView.com

GBPUSD Short

 Posted by at 10:46 AM  FX Market
Feb 042020
 

Short 1.3000 TP 1.26

Near-term support levels:
1.292
1.274

Fundamental catalyst:
UK faces uncertainty forming trade deals with EU and with other nations. Moreover, BOE has hinted rate cuts before. They may just do so on their next meeting.



GBPUSD Short by traderh on TradingView.com