Take profit in EURGBP short recommendation

Yesterday we took profit at 0.8800 in our short EURGBP recommendation opened last October 20th at 0.9000.

The cross is just in the upside trend from Dec 2015. Ahead of the SuperThursday with the BoE and the IR this week it could be broken (if any hawkish signs from Carney are seen) with next support on the 0.85 zone.

Note: This analysis is a personal opinion based on my experience, not a professional signal service. For trading, you must base your decisions on your own criteria

Daily Comment

Daily Comment,

At the beginning of the European session we say a "Risk off" movement without a clear catalyst coinciding with the 30th anniversary of the 1987 crack, the famous black Monday as a backdrop. Movement towards safe havens like the JPY or CHF that corrected considerably and with stock American futures in red. Little by little the movement corrected to find us now practically at the same levels where we began yesterday's session.

The Budget approval by the US Senate has attracted demand for USD, next step will be the approval of the long awaited tax reform.

Yesterday's President Trump's brief meeting with Janet Yellen strengthen even more Jerome Powell as her favourite successor, which would mean keeping the same line in rates as the current Federal Reserve.
Just as a reminder of Trump's comments during the 2016 campaign, saying that "They're keeping rates artificially low", we are seeing again a President who differs a lot between his campaign proposals and the measures that he is currently carrying out.

The Euro demand continues against its main crosses, especially JPY, CHF and GBP. EURCHF has set new highs during the Asian session at 1.1630, levels not seen since the floor was withdrawn in January 2015.

Nevertheless, we continue to hold 1.17/1.19 range in the EURUSD and 111.50/113.50 in the USDJPY.

On Sunday the presidential elections will take place in Japan where, with a high probability, the current president Shinzo Abe will win again. We expect some volatility in the Asian opening this weekend especially in the crosses against the yen if the survey forecasts are not fulfilled .

H&S formation in the Daily EURUSD graph. To nice to be true. 1.1650 level to watch on the downside to confirm.

Sell ​​EURGBP 0.90 - TP 0.88 - 0.91

Note: This analysis is a personal opinion based on my experience, not a professional signal service. For trading, you must base your decisions on your own criteria

Daily Comment

Daily Comment,

Yesterday was a transition day ahead of the holidays in the USA and Japan.

Investors will be looking at the possible unilateral declaration of independence from Catalonia and consequently the Spanish State response, with a clear impact on the stock market and Spanish debt as well as the euro.

USD lost ground despite the good data published last week (ISM, NfP and unemployment rate) in a more technical correction than a trend change that in the case of the EURUSD could take us over 1.18/1.1850

The polls in Japan continue supporting the current President Abe for the 22th elections. We continue to see an asymmetric risk in the election event, if the current status quo is maintained, the JPY would weaken, although not having a large majority the appreciation of the Japanese currency would be much more important, with the replacing of Kuroda (President of the BoJ) and probably modifying the current stimulus program.

Yesterday the modification of the last salary data, because of a computer error with wages up from 1.6% to 2.4% give support to the GBP. The market discounts near 80% probability for a rate increase in the November meeting and an additional for the whole year 2018, so there would be scope to allocate more rises next year with the consequent support to the GBP.

USDCNH (white/blue) vs EURUSD (orange, inverse). Really good inverse correlation because of the currency diversification from the Bank of China.

If USDCNH contiue the downtrend will give support to the EURUSD

Stop profit executed at 1.1750 in short EURUSD position, opened at 1.20

Note: This analysis is a personal opinion based on my experience, not a professional signal service. For trading, you must base your decisions on your own criteria

EURUSD Stop modified

Ahead of the US employment data, we modified the stop loss of our short EURUSD position to protect part of the profit.

EURUSD Short 1.20 - TP 1.1650 - SL 1.1750 (from 1.1850)

Note: This analysis is a personal opinion based on my experience, not a professional signal service. For trading, you must base your decisions on your own criteria

Daily Comment

Daily Comment,

Election`s in Germany, political situation in Spain, Trump's long-awaited tax plan and Yellen's replacement are the main arguments to see an offered euro and bid USD that has led the EURUSD to trade below 1.17 during the Asian session.

In addition, the good manufacturing ISM data published yesterday (60.8 vs 58.8 in August), highest mark since May 2004 with the employment component and paid prices at highs since 2011 confirms the good momentum for the American economy.

The British manufacturing PMI data surprised to the downside, with a severe punishment to the GBP that lost slightly more than 1% against the USD while the Conservative Congress that is being held in Manchester this week.

In Japan the polls continue to be favorable to the current president Abe. We clearly see an asymmetric risk that in the event of a defeat could lead the USDJPY to the 105 zone and in case Abe`s victory going to the 115/116 zone.

As expected, the Bank of Australia has kept unchanged the official rate talking again about the risks of an AUD appreciation for its forecasts.

Light day in terms of macroeconomic data, Eurozone PPI and English construction PMI. Additionally, Powell's statement (14:30) will be analyzed because he is in good position to replace Yellen next year.

BBDXY Daily - Topping with the downside chanel

BBDXY Hourly - First divergences

EURUSD Daily - Good support to 1.16

 EURUSD Daily - Ichimoku cloud support is 1.16

EURUSD Short 1.20 - TP 1.1650 - SL 1.1850 (we modifiy the stop loss to protect part of the profit)

Note: This analysis is a personal opinion based on my experience, not a professional signal service. For trading, you must base your decisions on your own criteria

Daily Comment

Daily Comment,

The downward move in the single European currency continues negatively affected by several factors: uncertainty after the German elections, where governance seems a little more complicated than before and a recovery of the USD, that started after the meeting of the Federal Reserve last week, and also supported by the expected fiscal reform expected to be announced today, although last night Donald Trump has unveiled part of his plan: lowering the maximum tax rate to 35% and reducing the business tax to 20 %.
Since the election of the new President this reform has been one of the greatest uncertainties of his mandate, so if it is finally approved we should see again a return to the "Trumptrade."

Yesterday we got Janet Yellen's remarks, in line with last week's comments during the press conference, saying that the "Fed should be wary of moving too gradually"or it'd be "imprudent to keep policy on hold until inflation at 2%". Quite hawkish comments that did not have a big impact on the market.

All this together set new lows in the EURUSD in the last month breaking important key levels that would point to a further correction with possible target area of ​​1.16.

In terms of data the references of the day will be durable goods, as well as statements by Bullard (19:30), Brainard (20: 00h) and Trump with the presentation of the tax package (21: 00h) in the US and a statement of Poloz from the Central Bank of Canada at 17:45

We also have a rate decision in New Zealand where we expect the RBNZ to remain cautious, waiting for government formation after the weekend's election, arguing the need for a more depreciated currency despite the fall suffered since its last meeting of more than 2.5%.

EURUSD Daily 5 months trend broken

EURUSD H&S formation. 1.1850 neckline broken, objective 1.16ish

Short EURUSD 1.20 - TP 1.1650 - SL 1.21

Note: This analysis is a personal opinion based on my experience, not a professional signal service. For trading, you must base your decisions on your own criteria

Daily Comment

Daily Comment,

Finally the Fed meeting came out in a more positive tone than some analysts had expected.

They left unchanged the rate forecasts for this year, so members are expecting a new hike from here to December, they also maintained the three expected hikes for 2018. The negative note came from the long-term rate forecast, modifying it slightly from 3% in June to 2.80% now, hence the initial USD reaction that corrected downward in the first few bars after the announcement. Also they upgraded their forecast of 2017 GDP growth by 0.2% and the unemployment rate down to 4.1% by the end of the year.

During the press conference we saw the more hawkish version of Janet Yellen, assuring that the recent downward preassures on inflation is something temporary and considering also that the impact of the hurricanes Harvey and Irma will not have a great effect in the economy.

Since the announcement, the market has adjusted the probability of a rate hike for December, going from 50% to almost 70%, with treasuries offered increasing their yields to 2.28% in the 10y  and reaching a 9 year high in the 2y at 1.445%.

USD purchases against major exchanges with important movements in those currencies whose central banks maintain, at least for the moment, the accommodative policy, see BoJ or SNB.

In terms of data the most remarkable in the US are the weekly jobless claims, the Philadelphia Fed index, and the leading indicator index.

EURUSD H&S formation. 1.1850 neckline, if it was broken 1.16ish objective

Short EURUSD 1.20 - TP 1.1650 - SL 1.21

Note: This analysis is a personal opinion based on my experience, not a professional signal service. For trading, you must base your decisions on your own criteria