Best Thread FXCM/DailyFX Signals and Strategies

[Jason Rogers]

FOMC Minutes out Early; Policymakers Signal QE3 to Taper in 2013

Note: An administrative error at the Federal Reserve forced the world’s most important central bank to make an uncommon decision: release the prior month’s meeting Minutes at 09:00 EST/13:00 GMT as opposed to the typical release time of 14:00 EST/18:00 GMT. With the March Minutes being released on Tuesday at 14:00 EST/18:00 GMT to several dozen Congressional leaders and trade groups, it was necessary for the Fed to release the Minutes early today to limit potential trading on material nonpublic information.

You can stay on top of the latest news as it happens with the Real-Time News Feed at DailyFX.com

Typically, reactions in the EURUSD and the USDJPY (among the other USD-based majors) tend to be quite volatile following the release of the Fed’s Minutes, but with their leak earlier yesterday, the direct impact on trading at 09:00 EST/13:00 GMT is less clear and accordingly, a degree immeasurable.

Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) 1-minute Chart: April 10, 2013

Past performance is not necessarily indicative of future results.​

Those market participants got off guard by the early release, however, viewed the Minutes as constructive for the US Dollar, bidding the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) up from 10486 to as high as 10495, the session high. At the time this report was written, however, prices began to pullback and move towards the release reaction low of 10478.

 

[Jason Rogers]

Trading Crowds Go in One Direction, DailyFX Trading Signals Gain Doing Opposite

The SSI-based trading signals on DailyFXplus.com have had a great week trading the Japanese Yen meltdown, and retail forex crowd extremes offer a number of attractive trades in Yen and US Dollar pairs.

Past performance is not necessarily indicative of future results, but the fact that trading crowds have continued buying into Japanese Yen and US Dollar weakness suggest this move is far from over.

Past performance is not necessarily indicative of future results​

Indeed, Euro and British Pound short positions against the USD surged an almost-unbelievable 82 and 158 percent since last week. We would be very careful about joining the crowd at these levels—in fact we like doing the opposite.

Past performance is not necessarily indicative of future results​

Elevated volatility expectations in JPY pairs makes the Breakout2 trading signals particularly attractive on the EUR/JPY, while outperformance in our streak-prone Momentum2 suggests its USD and JPY-shorts may continue to do well in the days ahead.

Past performance is not necessarily indicative of future results​

These DailyFX trading signals are available as automated strategies at FXCMapps.com

 

[Jason Rogers]

SSI: Gold Long Positions Grows, Careful of Trying to Catch Falling Knives

The last report for the week on the Speculative Sentiment Index (SSI) was just posted on DailyFXplus.com. It reveals that the ratio of long to short positions in Gold (XAU/USD) stands at 3.83 as 79% of traders are long.

Yesterday the ratio was 3.28; 77% of open positions were long. Long positions are 3.4% higher than yesterday and 7.0% above levels seen last week. Short positions are 11.5% lower than yesterday and 19.6% below levels seen last week.

Open interest is 0.1% lower than yesterday and 0.5% above its monthly average. We use our SSI as a contrarian indicator to price action, and the fact that the majority of traders are long gives signal that the XAU/USD may continue lower.

Past performance is not necessarily indicative of future results.​

The trading crowd has grown further net-long from yesterday and last week. The combination of current sentiment and recent changes gives a further bearish trading bias.

 

[Jason Rogers]

Gold Bear Market

Today's big mover is gold down 6%+, and now down over 27% since the peak of $1920 reached in September 2011. A decline this large puts gold in bear market territory. Take a look at the chart:

Gold (XAU/USD)

So where does gold head next? This is a very long term view going all the way back to the 2000 low around $250, and adding a fibonacci retracement finds major support near $1,281 which is the 38.2% fibonacci level.

Gold charts can be found through, and gold trading is not available for US residents. As with any form of speculative trading, please bear in mind that your capital is at risk. Good luck with trading this week!

 

[Jason Rogers]

Gold Outlook

What's next for gold?

DailyFX Analyst Jamie Saettele sees another dive to the $1300 level before bottoming out. Here's the chart he posted to his twitter account @JamieSaettele a little earlier:

Traders were very aggressively long gold going into the gold sell-off and they remain long though less so than last week. Below is a screenshot of the SSI positioning overlaid with the price of gold. Green bars indicate net long positioning and red bars indicate net short positioning. You can see the large amount of long interest in gold that has persisted throughout gold's decline since 2012.

 

[Jason Rogers]

EUR/USD Trading Signal

The Tidal Shift Strategy in DailyFX PLUS is now short EUR/USD. Here's a look at the chart and the strategy setup:

The trigger for this drop seems to be speculation of a possible rate cut by the ECB:

The ECB could lower interest rates further if economic data so warrants, ECB Governing Council member Jens Weidmann was quoted by The Wall Street Journal as saying on Wednesday.

"The ECB is a central bank that likes to prepare the market for any potential changes in monetary policy and that is why Weidmann's comments are so important because it could be the first of many to follow," said Kathy Lien, managing director at BK Asset Management in New York.

The euro earlier came under pressure after a media report cited former member of the ECB Executive Board Lorenzo Bini Smaghi as saying the central bank should find ways to stop the euro from gaining.

Source: Euro falls on ECB rate cut talk; yen slips before G20 | Reuters​

Now we wait to see if the EUR/USD can make a clean break through the technically significant 1.3000 level.

 

[Jason Rogers]

SSI: AUD/USD Breakdown Gathers Pace as Retail Fades Sell-off

The Speculative Sentiment Index (SSI) is a contrarian indicator to price action, and the fact that the majority of traders are long AUD/USD gives a signal that the pair may continue lower.

Past performance is not necessarily indicative of future results.​

The ratio of long to short positions in the AUD/USD stands at 1.97 as 66% of traders are long. The trading crowd has grown further net-long from yesterday and last week. Yesterday the ratio was 1.19; 54% of open positions were long.

Past performance is not necessarily indicative of future results.​

Long positions are 35.3% higher than yesterday and 40.0% above levels seen last week. Short positions are 18.2% lower than yesterday and 1.2% above levels seen last week. The combination of current sentiment and recent changes gives a further bearish trading bias.

 

[NVP]

Jason

whats the spread on the US Dollar index on FXCM and what instruments do you offer to trade it

Thanks
N

 

[Jason Rogers]

Dollar, Yen Rally as Global PMIs Disappoint; EUR/USD Under $1.3000

Dollar, Yen Rally as Global PMIs Disappoint; EUR/USD Under $1.3000

The Euro declined below 1.3000 against the US Dollar following a contraction in German services activity for the first time in five months, according to Markit’s Purchasing Managers’ Index (PMI). The sharp downturn in German PMI’s pulled the Euro about 80 points lower against the US Dollar, and the pair fell below 1.3000 for the first time in two weeks.

EUR/USD Daily Chart

Past performance is not necessarily indicative of future results.​

The Chinese HSBC PMI Manufacturing (APR) index also dropped to 50.5 from 51.6 in March, well-below the 51.5 consensus forecast. China is a key trading partner of Australia and as was to be expected, the Aussie also declined further against the US Dollar.

AUD/USD Daily Chart

Past performance is not necessarily indicative of future results.​

The SSI-based trading signals on DailyFX PLUS are currently saying to short the Euro, Aussie and other "risk-on" currencies versus the US Dollar and Japanese Yen.

Past performance is not necessarily indicative of future results.​

These trading signals are available as automated strategies at FXCMapps.com

 

[Jason Rogers]

Jason

whats the spread on the US Dollar index on FXCM

Hi NVP,

The spread on USDOLLAR is variable, but it's typically 2 or 3 pips.

and what instruments do you offer to trade it

Thanks
N

You can trade USDOLLAR on Trading Station, MT4 and NinjaTrader.

If you are asking what components make up the Dow Jones FXCM Dollar Index, then here's a link with details: S&P Dow Jones Indices » Dow Jones FXCM Dollar Index » Overview

If I have misunderstood your question about instruments, please let me know.

Jason

 

[Jason Rogers]

Worse-than-Expected UK GDP Could Boost Dollar Index

Past performance is not necessarily indicative of future results.​

Tomorrow's top news for the Dow Jones FXCM Dollar Index (ticker: USDOLLAR) will be the release of the UK GDP report. If the data falls short of forecasts, the Dollar Index may jump by some 11 points based on historical averages.

Past performance is not necessarily indicative of future results.​

Research shows that price movement may be significant if the outcome is disappointing. Last quarter, the UK's output contracted by 0.3 percent, on the heels of a temporary boost due to the Olympic Games. The following table summarizes the average 1-minute changes in the US Dollar Index following the release of UK GDP quarterly data, from between January 2011 and March 2013.

Past performance is not necessarily indicative of future results.​

A worse-than-expected report has historically lead to the greatest increase in the Dollar Index, significantly differing from the overall average one-minute change in two years—effectively zero. Furthermore, it appears evident that trading on positive data is difficult, as an increase in GDP data will not necessarily result in a bullish Pound.

 

[Jason Rogers]

After GDP-Related PullBack, USDOLLAR Outlook Hinges on FOMC

The US economy saw a solid improvement in the 1Q’13 relative to the 4Q’12, but growth still managed to disappoint what proved to be an overly-bullish forecast. According to a Bloomberg News survey, economists were expecting the world’s largest economy to grow at annualized pace of +3.0% in the 1Q’13; however, the US economy only grew by +2.5%

Past performance is not necessarily indicative of future results.​

Following the release, the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR), an equal-weighted basket of the Australian Dollar, the British Pound, the Euro, and the Japanese Yen against the US Dollar, continued its intraday declines, falling from 10509 to as low as 10494.

Past performance is not necessarily indicative of future results.​

A look at longer-term charts shows that the USDOLLAR is finding support ahead of channel support off of the April 2 and April 16 lows, at 10475.

Past performance is not necessarily indicative of future results.​

The greenback weakened against three of the four components, led by a 1.46 percent rally in the Japanese Yen, and the low-yielding currency may continue to gain ground against its U.S. counterpart as the Bank of Japan (BoJ) moves to the sidelines.

Past performance is not necessarily indicative of future results.​

The deviation in the policy outlook should drive the USD/JPY higher over the longer-term, and we may see the pair threaten the 100.00 figure should the FOMC talk down bets for more QE.

 

[Jason Rogers]

Crude Oil and Gold Recover on Fed, ECB Stimulus Hopes

Crude oil and gold prices are on the upswing to start the trading week as optimism about policy support from the Fed and the ECB boosts risk appetite.

DailyFX Economic Calendar

Times above are in GMT​

The Fed is expected to strike a dovish tone, reinforcing the continuity of QE3 in the wake of recently soft US data. Meanwhile, consensus forecasts now point to a rate cut from Mario Draghi and company.

Daily Chart for WTI Crude (US Oil)

Past performance is not necessarily indicative of future results.​

Prices are testing support at 92.62, the 76.4% Fibonacci retracement. A break back below this barrier exposes the 61.8% mark at 91.28. Near-term resistance is in the 93.84-94.79 area, marked by the April 10 and 25 swing highs. A push above that eyes rising trend line support-turned-resistance now at 97.46.

Daily Chart for Spot Gold (XAU/USD)

Past performance is not necessarily indicative of future results.​

Prices put in a Spinning Top candlestick below resistance at 1469.28, the 50% Fibonacci retracement, pointing to indecision and hinting a pullback may be ahead. Near-term support is 1434.43, the 38.2% Fib, with a break beneath that aiming for the 23.6% expansionat 1391.30. Alternatively, a break above 1469.28 on a daily closing basis exposes the 61.8%level at 1504.14.

 

[Jason Rogers]

New Data Points to an ECB Rate Cut

Today, we received another batch of soft European data that paints an even gloomier picture of the region: a deepening recession that will easily take the rest of 2013 to see some of its effects reversed.

The Euro-zone estimate for inflation in April rate fell to +1.2% y/y today, its lowest such rate since February 2010, as consumer demand has been absolutely demolished in the world’s largest economic region.

Moreover, unemployment in Germany increased another 4K in April after expanding a revised 12K the month prior, and we may see the European Central Bank (ECB) carry out its easing cycle throughout 2013 as the region struggles to return to growth.

The SSI-based trading signals on DailyFX PLUS are currently buying EUR/USD. These trading signals are available as automated strategies at FXCMapps.com

Past performance is not necessarily indicative of future results.

 

[NVP]

Hi NVP,

The spread on USDOLLAR is variable, but it's typically 2 or 3 pips.

You can trade USDOLLAR on Trading Station, MT4 and NinjaTrader.

If you are asking what components make up the Dow Jones FXCM Dollar Index, then here's a link with details: S&P Dow Jones Indices » Dow Jones FXCM Dollar Index » Overview

If I have misunderstood your question about instruments, please let me know.

Jason

ok thanks - thats not bad .....and good to see you guys are not tradeweighting the damn thing ........thanks

 

[NVP]

Jason

so - is that Yen index also now tradeable on FXCM ?..........probably wider spread though right ?

N

 

[Jason Rogers]

Dollar at Risk of Reversal if Fed Hints at More QE

With Tuesday's 0.3 percent decline, the Dow Jones FXCM Dollar Index (ticker: USDOLLAR) has dropped for five consecutive days. Matching the longest series of declines since January 2012, we may see a true break to trend reversal depending on how the Fed judges policy.

Past performance is not necessarily indicative of future results.​

It is important to recognize something immediately with the upcoming Federal Open Market Committee's (FOMC) rate decision: the policy group is unlikely to change its actual policy. That means that we shouldn't expect a change to the current extracurricular stimulus program (also called QE3) - much less a change in rates.

Past performance is not necessarily indicative of future results.​

However, that doesn't mean the event is not going to be market-moving. In fact there is a high probability of a significant reaction from the dollar and other risk-sensitive assets depending on how the deliberations go. The Fed's influence is tied to the market's speculative effort to time the slowing and eventual end of the $85-billion-per-month stimulus effort.

 

[Jason Rogers]

Heads up! At 5pm New York time today, there will be quintuple rollover on JPY pairs due to the Golden Week holidays. That means you will earn or pay 5 days worth of rollover interest for any JPY trades that are still open at the stroke of 5pm.

You can use the Rollover Calendar at DailyFX.com to keep up to date on when holidays will affect the rollover schedule.

 

[Jason Rogers]

ok thanks - thats not bad .....and good to see you guys are not tradeweighting the damn thing ........thanks

Glad you think so

Our feeling was that the ICE Dollar Index (USDX) was too Euro-centric, and so with the Dow Jones FXCM Dollar Index (USDOLLAR), we wanted to make the formula simpler and also acknowledge the growing importance of the Asia-Pacific region. I feel this decision has been justified by the JPY driven moves we have seen in the markets, not to mention the growing prominence of AUD.

 

[Jason Rogers]

Jason

so - is that Yen index also now tradeable on FXCM ?..........probably wider spread though right ?

N

It's not available for trading at this time, but I'll let you know should that change