News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • The British Pound may fall if EU and UK negotiators fail to reach a consensus as the December 31 deadline nears. The third presidential debate is on deck, how might markets react? Find out from @ZabelinDimitri here:https://t.co/kDSYzBDA3t https://t.co/wmltuIVo5h
  • #BTC testing confluent resistance at the Ascending Channel midpoint and September high (12067) RSI hints at further gains as it surges towards overbought territory Is #Bitcoin poised to break back above key resistance at the $12,000 mark? https://t.co/YCPnKq0VcJ https://t.co/EgHA4jELhI
  • I thought it was make or break today by the close on whether they can get a fiscal stimulus before the Nov 3rd election... https://t.co/YgwnE9vDXC
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇨🇦CAD: 0.48% 🇪🇺EUR: 0.45% 🇨🇭CHF: 0.32% 🇯🇵JPY: -0.06% 🇦🇺AUD: -0.27% 🇳🇿NZD: -0.40% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/0YPpZ9dwBY
  • USD/JPY Price Outlook: Dollar-Yen Undermined by Fiscal Stimulus Hopes Link to Analysis via @DailyFX: https://www.dailyfx.com/forex/market_alert/2020/10/20/usdjpy-usd-jpy-price-outlook-dollar-yen-undermined-by-stimulus-hopes.html $USDJPY $USD $JPY #FX #Forex #Trading https://t.co/yNss3yhgt7
  • It’s been relatively quiet in FX-land, but the USD did push below a big zone of support earlier today. Get your $USD currency pairs technical analysis from @JStanleyFX here:https://t.co/ZC8g3lVxoO https://t.co/lchSrr9hBO
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Silver: 1.02% Gold: 0.15% Oil - US Crude: -1.06% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/SN5ZJQwiRu
  • White House Chief of Staff Mark Meadows: -Mnuchin and Pelosi made good progress on stimulus talks today -We still have a ways to go toward reaching a deal -Talks productive enough to continue again tomorrow -Trump admin offer currently stands at $1.88-trillion
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.81%, while traders in EUR/USD are at opposite extremes with 73.16%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/PUSjs4XLSS
  • US Treasury opposes extension of Federal Reserve's Municipal Lending Facility (MLF) -BBG $USD $SPX $XAU $RUT $DJI
China Trade Data Acts As Catalyst for Early Week Risk Off Price Action

China Trade Data Acts As Catalyst for Early Week Risk Off Price Action

2012-03-12 06:17:00
Joel Kruger, Technical Strategist
Share:
  • China trade deficit widens on much softer exports
  • Third phase of global crisis to impact China, commodity and emerging FX
  • Aussie most exposed and already showing signs of weakness
  • Yen continues to show signs of major top and structural shift
  • Investors start to focus on key event risk in form of FOMC rate decision

A wider trade deficit and disturbingly weak export numbers from China over the weekend have done a good job of weighing on sentiment into Monday, with currencies coming under some added pressure against the US Dollar. We have been warning for some time of a third phase of the global recession which should originate in China and spread to the commodity correlated economies and other emerging markets. Many of these economies have managed to outperform throughout the crisis thus far, with investors seeing these regions as attractive alternatives to a very troubled US and European economy.

However, we have always had a hard time digesting the safe haven flows into these traditionally risk correlated markets, and we finally think that things are catching up and we could soon see an aggressive liquidation of investment in these regions as the global recession enters its final phase. As far as the more major currencies are concerned, we are projecting underperformance in currencies like the Australian Dollar, New Zealand Dollar and Canadian Dollar going forward, and even see these currencies suffering against a recently beaten down Euro currency. Australian should be the most exposed given the wider yield differential and with recent economic data out of the country also disappointing (see latest employment and GDP results), we are getting added confirmation for a bearish outlook on the commodity currency.

Elsewhere, another major shift in the FX markets is underway with the Yen, as the currency continues to show evidence of a major structural shift which points to a significant top and material weakness going forward. The most compelling evidence for this structural shift comes from the weekly USD/JPY chart which shows the market closing back above the Ichimoku cloud for the first time since the summer of 2007. While short-term studies are looking a little stretched and could warn of some pullbacks, we expect any pullbacks to now be very well supported above 78.00 in favor of fresh upside into the 85.00-90.00 area over the coming months. As a reminder, the nice thing about shorting the Yen is that is doesn’t cost anything to hold the position on a daily basis.

Looking ahead, the key event risk for the week will come in the form of the FOMC rate decision. The central bank meeting will take on added significance with US economic data showing more consistent signs of recovery and increasing speculation that the Fed may need to reconsider their ultra accommodative stance. While we do not expect the Fed to reverse policy just yet, Mr. Bernanke and company could look to firm things up just a bit by removing the keeping rates ultra low through 2014 language. Should the Fed move in this direction, then we could see added pressure on US equities as market participants become less comfortable with the idea of higher interest rates. We would also see a stronger US Dollar on a narrowing of yield differentials.

ECONOMIC CALENDAR

China_Trade_Data_Acts_As_Catalyst_for_Early_Week_Risk_Off_Price_Action_body_Picture_5.png, China Trade Data Acts As Catalyst for Early Week Risk Off Price Action

TECHNICAL OUTLOOK

China_Trade_Data_Acts_As_Catalyst_for_Early_Week_Risk_Off_Price_Action_body_eur.png, China Trade Data Acts As Catalyst for Early Week Risk Off Price Action

EUR/USD: Friday’s aggressive pullback strengthens the prospects for the end of a corrective move in 2012 which has in fact stalled just ahead of 1.3500. From here, the risks are tilted to the downside and a break below next key support by 1.2975 will be required to officially put the pressure on the downside and open an acceleration of declines back towards the 2012 lows at 1.2620. At this point, only a break back above 1.3300 would alleviate downside pressures and delay outlook.

China_Trade_Data_Acts_As_Catalyst_for_Early_Week_Risk_Off_Price_Action_body_jpy2.png, China Trade Data Acts As Catalyst for Early Week Risk Off Price Action

USD/JPY:The market is doing a good job of showing the potential for the formation of a major cyclical bottom after closing above the weekly Ichimoku cloud for the fist time since July 2007. This further solidifies basing prospects and we could be in the process of seeing a major bullish structural shift that exposes a move towards 85.00-90.00 over the coming months. At this point, only back under 77.00 would delay outlook and give reason for concern. However, in the interim, it is worth noting that gains beyond 82.00 over the coming sessions could prove hard to come by with shorter-term technical studies needing to unwind from their most overbought levels in over 10 years before a bullish continuation. As such, we would caution buying breaks above 82.00 for the time being and instead recommend looking for opportunities to buy on dips.

China_Trade_Data_Acts_As_Catalyst_for_Early_Week_Risk_Off_Price_Action_body_gbp2.png, China Trade Data Acts As Catalyst for Early Week Risk Off Price Action

GBP/USD: The market has been costly confined to trade between the 100 and 200-Day SMAs since early February and the latest break back below the 100-Day SMA therefore suggests that we could be on the verge of a bearish break. The key level to watch comes in by 1.5645, and a break and close below this level will reaffirm bearish outlook and open the door for a more significant bearish decline towards the 1.5000-1.5300 area further down. Inability to establish below 1.5645 however, will suggest that more choppy directionless trade is in the cards.

China_Trade_Data_Acts_As_Catalyst_for_Early_Week_Risk_Off_Price_Action_body_swiss1.png, China Trade Data Acts As Catalyst for Early Week Risk Off Price Action

USD/CHF: Setbacks have stalled for now just ahead of 0.8900 and the market could finally be looking to carve the next medium-term higher low ahead of a bullish resumption and eventual break back above 0.9660. Look for additional gains over the coming sessions back towards 0.9300, with a break above to confirm and accelerate. Ultimately, only a drop below 0.8930 negates and gives reason for pause.

--- Written by Joel Kruger, Technical Currency Strategist

To contact Joel Kruger, email jskruger@dailyfx.com. Follow me on Twitter @JoelKruger

To be added to Joel Kruger’s distribution list, send an email with subject line “Distribution List” to jskruger@dailyfx.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES