GroundStone Holdings Morning Newsletter

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Morning Technical Newsletter

Morning Technical Newsletter

Dollar Broadly Lower on Policy Outlook

The US Dollar was broadly lower after the US mid-term elections which suggested that FX players expect the Trump administration to face some strong headwinds attempting to push through some of its fiscal policies given the Democratic party’s control of the House of Representatives. Currency strategists say that the greenback had rallied under Trump’s fiscal stimulus plan and the economic data which accompanied it, and that that may have forced the hand of the Federal Reserve which signaled its willingness to move to a higher interest rate environment. Now, all bets are off, they say.

As reported at 11:15 am (GMT) in London, the EUR/USD was trading at $1.15, a gain of 0.62% and just off the session peak of $1.152. The USD/JPY was trading lower at 113.06 Yen, down 0.31%; the pair has ranged from 112.948 Yen to 113.818 Yen. The GBP/USD was trading at $1.3163, up 0.55%, off the session high of $1.3175.

Trump Efforts Could be Hampered

What is also worrying Dollar bulls is that, with control of the House, the Democrats now have the ability to scrutinize the administration’s current policies. Looking ahead, analysts say that there is greater uncertainty as to the Fed’s policies relative to higher rates, and the ability for the President to move ahead with certain stimulus policies.

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Morning Technical Newsletter

Morning Technical Newsletter

U.S. Oil Output Hits Record Highs

The United States assumed the position of the world’s top crude producer when its production hit 11.6 million barrels per day, which it did last week, according to a report released by the Energy Information Administration (EIA) yesterday. The report showed that the U.S. has increased its crude production by 22.2 percent this year alone, increasing production by 2 million barrels per day from the same period last year, and has tripled its production in the past decade. The U.S. government has set its target to produce 12.1 million barrels per day on average in the coming year. Russia is currently producing around 11.4 million barrels per day and Saudi Arabia is currently producing 10.7 million barrels per day.

OPEC members are expected to meet this weekend and it is largely expected that they will focus on how to react to America’s increasing production. Analysts have noted that there is a real possibility that OPEC will implement production cuts as it has in the past, to prevent prices from dropping further. Oil prices have tanked recently due to worries about a global supply glut and the increase in U.S. production. In addition to production increases in the U.S., Russia, Saudi Arabia, Iraq and Brazil have all increased production in recent years, contributing to oversupply.

On Thursday, oil prices were modestly higher, with U.S. WTI futures up 11 cents per barrel to $61.78 per barrel as of 2:37 p.m HK/SIN. Brent crude futures were up 0.07 percent to $72.12 per barrel.

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Morning Technical Newsletter

Morning Technical Newsletter

Hawkish Fed Lifts Dollar

The US Dollar earlier saw positive momentum against its rivals during Asian trade on Friday. That came on the heels of the the Federal Reserve Bank’s reaffirmation of its commitment to raise interest rates in the near term. Though the Fed did leave rates at their current levels, the language suggested that a rate hike could come as soon as next month. With the mid-term elections now out of the way and with an outcome largely predicted, analysts say that demand for safe haven currencies is likely to continue to fade.

As reported at 10:37 am (JST) in Tokyo, the EUR/USD was trading at $1.1356, down 0.08%; the pair has ranged from a low of $1.13537 to a high of $1.13690. The GBP/USD was trading lower at $1,3056, down 0.07% and just off the session low of $1.3052 while the high was recorded at $1.3070.

USD/JPY Helped by Policy Divergence

Against the Japanese Yen, the greenback has appreciated 2.4% within the last two weeks, largely a result of the monetary policy divergence between the Bank of Japan and the Federal Reserve. According to the BOJ, the economic situation in Japan does not yet warrant their reining in of the Quantitative Easing policy it began several years ago. Presently, Japan’s inflation rate remains stubbornly below the central bank’s 2% target while economic growth and productive have been relatively stagnant. The USD/JPY pair was trading lower at 113.884 Yen, down 0.135%.

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Education post 13/100 – How to trade doji candlestick pattern?

– A Doji is a small bodied Japanese candlestick pattern whose opening and closing are at the same or nearly the same price.

– A Doji is usually part of common Japanese candlestick reversal patterns like the bullish Morning Star and bearish Evening star patterns

– Because Dojis are found in a large number of reversal patterns, traders automatically think that the single doji is a reversal candlestick. But in fact, the doji by itself represents indecision in the marketplace.



– A Doji breakout setup provides an excellent risk to reward opportunity for forex traders.

The lowly doji is very unassuming in appearance. Typically, it looks like a plus sign but can appear as a capital “T” in the Dragonfly doji pattern or the shape of a nail in the Gravestone Doji. We are going to be discussing the first two types of dojis found in the “cheat sheet” above. These small candles can lead to large breakouts that either continue trends or reverses them. We are going to look at the way to trade these power packed price patterns with limited risk for maximum potential gain

Typical candlesticks consist of a body that may be one of two colors; blue or red. A candle is blue if buyers were able to push prices above the opening price and were able to hold it until the close of the candle. A candle is red or bearish is sellers were able to push prices below the opening price and hold it there until the close.

On the other hand, the doji candles have no color. The doji and long-legged doji illustrate the battle between buyers and sellers that ended in a tie. The opening price and closing price are in the same place as bulls were unable to close prices higher and bears were unable to close prices lower.

How to Trade the Doji Breakout

Ideally, you want to find a doji that has formed near a level of support like a trend line. You want to identify the doji high and the doji low as this will determine the support and resistance levels of a potential breakout.

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How to trade hammer candlestick formation?

How to trade hammer candlestick formation?

What Is a Hammer?

Considered a reversal formation and forms when price moves well below open, but then rallies to close near open if not higher. (inverted hammer is the mirror opposite)
Forms a candlestick with a long lower shadow (tail), and a small body with little or no wick–looks like a hammer, or mallet. (inverted hammer is the mirror opposite)
Depending on the previous trend, a hammer may be referred to as a hanging man or shooting start, but the same concept applies. Bullish or bearish bias depends on previous price swing, or trend.

A hammer after an uptrend is called a hanging man.
An inverted hammer after an uptrend is called a shooting star.

Why are Hammers important?

May act as a leading indicator suggesting a shift in bullish/bearish momentum
Completed hammers may help to either confirm, or negate, a potential significant high or low has occurred. –price drives higher or lower “hammering” out a top or bottom before closing back towards open
Significance increases with length of shadow (ideally 2-3 times the size of the body) as well as timeframe

Hammers may also help confirm, or strengthen, other reversal indicators (i.e. may occur as part of tweezer formation, or next to doji, etc.)
A hammer “fails” when new high is achieved immediately after completion (candle), and a hammer bottom “fails” if next candle achieves new low.
A hammer “fails” when new high is achieved immediately after completion (candle), and a hammer bottom “fails” if next candle achieves new low.

Example:

 

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Morning Technical Newsletter

Morning Technical Newsletter

Oil Higher on OPEC Fears

OPEC and its allies have expressed serious concerns about global oversupply, prompting Saudi Arabia to announce a supply cut next month. The announcement sent prices over one percent higher during Monday’s Asian trading session. Brent crude futures were up 1.42 percent to $71.16 per barrel, and U.S. WTI Futures were trading up 0.85 percent to $60.70 per barrel as of 1:53 p.m. HK/SIN.

In a statement following its weekend meeting, OPEC and its allies hinted that several OPEC and non-OPEC oil producing countries may have to curb production in order to keep the oil markets balanced. In a separate announcement, Saudi Arabian Energy Minister Khalid al-Falih told reporters that the country will cut its supply by 0.5 million barrels per day. Taking the opposite position, Russian Energy Minister Alexander Novak said that he remains unconvinced that the oil market will remain oversupplied in 2019.

The announcements came only a few days after the Energy Information Administration (EIA) reported that U.S. production hit record highs of 11.6 million barrels per day earlier this month. On Friday, Baker Hughes reported that U.S. energy firms added 12 oil rigs last week, for a total count of 886 rigs, the highest number since March 2015.

This wouldn’t be the first production cut for OPEC in recent years. In January 2017 the group implemented production cuts to curtail a global surplus that caused prices to tank. The last production cut was partially canceled in June after oil prices returned to 3 ½ year highs.

A formal meeting of OPEC will be held next month, when the strategy will be formally unveiled.

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Morning Technical Newsletter-Brexit Noise Pressures Sterling

Until the Brexit is a “done deal in March 2019,” FX traders will have little choice but to ride a wave of uncertainty. Such is the case for trade in London today, with the Pound Sterling under pressure as worries mount that a soft Brexit might not be on the table.
The UK Prime Minister’s own party is in disagreement over her proposals as they relate to trade across the Irish borders. The latest news is that that four British ministers from Theresa May’s party, all of whom had supported staying in the Eu, are considering resigning.

As reported at 11:08 am (GMT) in London, the GBP/USD was trading lower at $1.2849, down 0.93% and near to the session trough of $1.2827. The EUR/GBP is trading higher at 0.8757 Pene, a gain of 0.21%; the pair has ranged from 0.87370 Pence to 0.87738 Pence.

Dollar Benefiting from Fed

In the US, the Dollar continues to strengthen as FX traders position themselves for a very probable December interest rate hike from the Federal Reserve Bank. Last week, the Fed reaffirmed its outlook of a tighter monetary policy, and the concerns over a possible failed Brexit strategy are helping to prop up the Dollar as a safe haven currency. Though FX traders perceive the Japanese Yen as a “safer bet,” the monetary policy divergence between the Fed and the Bank of Japan has provided a benefit to Dollar bulls. The USD/JPY is currently trading at 113.923 Yen, up 0.090%; the pair has ranged from 113.750 Yen to 114.214 Yen in today’s session.

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Morning Technical Newsletter-Hopeful Brexit News Lifts Pound

Hopeful Brexit News Lifts Pound

News that a Brexit deal, albeit still in draft form, was struck between the British government and the European Union was enough to provide a lift for the Pound Sterling. That news improved risk sentiment and gave investors the confidence to buy the Pound. Analysts offer a word of caution, however, and point out that this draft deal still needs to get approval from the British Parliament and that the Prime Minister may need to use all her powers of persuasion to receive the Parliamentarians’ blessing. Members of Parliament will be meeting tomorrow to discuss the merits of the draft.

As reported at 11:11 am (JST) in Tokyo, the GBP/USD was trading at $1.30, down 0.12% and moving away from the earlier high of $1.3036. The EUR/GBP is trading up 0.22% at 0.8688 Pence; the pair has ranged from 0.86674 Pence to 0.8710 Pence.

Dollar Outlook Improves

The US Dollar is coming under some pressure as well from the improvement in risk sentiment. Currency strategists expect that pressure to be short-lived given the outlook for the US economy, coupled with the Federal Reserve’s anticipated December rate increase. It’s position as a safe haven currency, especially relative to a weakening Japanese Yen, is also providing appeal to the greenback. The EUR/USD is currently trading at $1.13, up 0.13%, and off the session high of $1.13218.

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Morning Technical Newsletter-Bitcoin Loses $15B Value in One Day

Bitcoin Loses $15B Value in One Day

Bitcoin’s market capitalization sunk below $100 billion for the first time since October 2017 on Thursday, falling to low of $97,554,227,588 before reversing. As of 1:52 p.m. HK/SIN, the cryptocurrency’s value was $97,931,254,200 according to CoinMarketCap. Bitcoin was trading at $5,554.70 on Coinbase, the most popular bitcoin exchange, a $734.33 decline since yesterday or an 11.71 percent loss. The cryptocurrency has eased 25.47 percent since last year. Bitcoin traded at over $19,000 per coin as recently as December 2017.

Thursday’s dramatic losses followed a global selloff on Wednesday which may have been prompted by a “hard fork” being implemented by bitcoin cash, a breakoff of the standard bitcoin. A hard fork is the technical term for a form of cryptocurrency software upgrade that has been known to bring chaos to the relevant cryptocurrency. When traders become concerned about the technology surrounding a hard fork they tend to sell their holdings. Widespread selloffs lower the price of a cryptocurrency which then triggers stop losses for other traders’ open positions, amplifying the losses as traders mitigate their risks. Nevertheless, analysts don’t expect this selloff to start a long-term trend.

Oil Prices Also Head Lower

Oil prices were also lower on Thursday, pressured by rising supply and a distressing global economic outlook which could reduce demand. Data released this week by Germany and Japan, two of the world’s biggest industrial producers, showed economic contractions, while China’s economy remains depressed as well. China is the second-largest crude consumer in the world.

U.S. WTI futures were down 0.28 percent to $56.09 per barrel on Thursday afternoon in Asia, while Brent crude futures were down 0.12 percent to $66.04 per barrel. Oil prices have lost nearly one quarter of their value since last month. OPEC and its oil-producing allies are considering the possibility of implementing a supply cut similar to the one they implemented in 2017 in an effort to reduce supply and prop oil prices up. A formal decision is expected to be issued after the OPEC meeting next month.

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Morning Technical Newsletter-Pound Gets Some Relief from Battering

Pound Gets Some Relief from Battering
The Pound Sterling finally took a break from the recent free fall but FX traders remain clearly anxious that Britain might wind up without a Brexit agreement on March 29, 2019. The slide, which began early on Thursday after the news of the resignation of two prominent members of Theresa May’s party, had refused to ebb until recently. The concern is that the departure of these two key players may be the tip of the iceberg and that more party members might be unwilling to work with Ms. May to push through her proposal. If the Prime Minister is unable to secure Parliamentary approval, Britain would be left without the benefit of a safety net. The challenge to Theresa May’s leadership, the prospect of a hard Brexit and the possibility of slowing economic growth have all conspired against the Pound.

As reported at 11:08 am (JST) in Tokyo, the GBP/USD was trading at $1.2789, up 0.12% and moving away from the earlier trough of $1.2761. The GBP/JPY was trading at 144.999 Yen, up 0.01%; the pair has ranged from 144.878 Yen to 145.326 Yen.

Mario Draghi and EU CPI in Focus
Looking to later today, markets will focus on the release of inflation data for the Eurozone. At present, the latest poll suggests that October’s CPI and Core CPI will be stagnant on a year-over-year basis for the period, at 2.2% and 1.1%, respectively. Before then, however, Mario Draghi, as the keynote speaker will be addressing the European Banking Congress in Frankfurt. Mr. Draghi will likely be discussing the pulling back of the quantitative easing efforts the ECB has embarked on over the past several years and the governing council’s outlook as regards inflation and interest rates.

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Education post 15/100 – How to trade Psychological Price Levels?

What are Psychological levels?
Psychological levels are price levels whi
ch tend to draw big market attention and typically witness a reaction by price when tested. These levels are the main round numbers (whole numbers), referred to as “Double Zeros such as .9800, .990.

Plotting support and resistance levels is often a challenging and subjective task. It is also commonly one of the first areas of price action new traders attempt to tackle.

Support and resistance can be established in numerous ways, such as: trendlines, moving averages, pivot point levels, Fibonacci levels, key high/low points etc. A common complaint with a lot of these methods though is subjectivity.

This is why we believe psychological levels are appealing, as the numbers are effectively embedded within market structure and are entirely objective, as you’ll see going forward.

So…What are Psychological levels?
Say that you’re the proud owner of new car, and a buddy down the pub asks how much it cost. Assuming it set you back $10,999, it’s unlikely that you would tell him that exact figure. Instead, to keep things simple, you’d probably round the number to the nearest thousand i.e. $11,000. And this is exactly what happens in the financial markets! It is far more likely that a trader will select 1.2500 over 1.2493, for example.

Why do they work and how to trade them?

Trading support and resistance can be a fantastic way to approach the market and for many new traders this is one of the first areas of technical analysis that they come to properly understand. There are a great many varieties of support and resistance in the market that traders can look to build strategies around such as: key highs/lows, trend lines, Fibonacci levels, moving averages, pivots, Bollinger bands and more. However, there are also levels that are already embedded within the market that can act as powerful support and resistance and traders don’t need any tools or to perform any complicated analysis to find them. These levels are called “Psychological levels”

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Take a look at the USD/CHF D1 chart below:

 

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Education post 16/100 – How to trade market’s trend with HH,HL,LL,LH?

Education post 16/100 – How to trade market’s trend with HH,HL,LL,LH?

Price on a given time frame is in an uptrend if it is making higher highs (HH) and higher lows (HL) and in a downtrend, if it is making lower highs (LH) and lower lows (LL). If the price is doing anything else, it is in a consolidation pattern – range, triangle, pennant, rectangle etc.

The trend is considered in place until price is no longer making higher highs and higher lows in an uptrend or lower highs and lower lows in a downtrend. After a trend is broken, there is usually a period of consolidation that is easier to see on a lower time frame. With practice, you will be able to visualize this going on without looking at the lower time frame.

Example:

Market Phases with HH,HL,LL,LH?

Contrary to popular belief there are actually three ways the market can go;

Up
Down
Sideways
With the swing high/low definition now in mind we can start to build some layers on to the chart to identify these market phases and start to do a simple count of these swing highs and lows. In short

The market is going up when price is making higher highs and higher lows
The market is going down when price is making lower highs and lower lows
The market is going sideways when price is not making higher highs and higher lows OR lower highs lower lows

This may sound like child’s play and a statement of the obvious but you will be surprised at how often people will forget these simple facts. One of the biggest questions I get asked is, which way is it a market going? By doing a simple exercise you can see which way that price is going and decide on your trading plan and more importantly timing of a trade. What do I mean by timing? It may be that you are looking for a shorting opportunity as the overall trend is down but price on your entry time frame is still going up (making HH’s & HL’s). There is, at this stage, no point in trying to short a rising market until price action start to point down (making LH’s & LL’s. More on this shortly).

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Morning Technical Newsletter-Brexit and May Take Center Stage

The Pound Sterling edged higher during Monday’s trade in London as the UK Prime Minister makes yet another attempt to garner support for her Brexit plan. Many of the policymakers from Ms. May’s own Conservative Party have battled against her ideas for the so-called divorce deal and she has been fighting an uphill battle in an attempt to reach an agreement before a formal challenge to her leadership role materializes. Analysts say that it is somewhat surprising that a no-confidence vote has not yet been called, yet that delay is providing a lift to Sterling short sellers.

As reported at 11:13 am (GMT) in London, the GBP/USD was trading higher at $1.2869, a gain of 0.32% and falling just shy of the session peak of $1.2884; the low for the session is recorded at $1.2819. The EUR/GBP is trading lower at 0.8877 Pence, down 0.24%; the pair has ranged from a trough of 0.88674 Pence to 0.89020 Pence.

No Confidence Vote Count Eyed
Theresa May is defending her proposal today at the annual conference of the CBI Business Lobby. Analysts say she regardless of the support she can obtain from business leaders, if she continues to receive letters from her Conservative Party parliamentarians which call for a no-confidence vote, her ability to push through her Brexit agenda will be limited. She has not yet met the “threshold” of receipt of 48 letters which would trigger a vote, but at least 20 Ministers of Parliament claim to have already submitted the letter to her.

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Morning Technical Newsletter-Global Stock Markets Plunge on Tech Woes

Morning Technical Newsletter-Global Stock Markets Plunge on Tech Woes

Global stock markets were broadly lower on Tuesday after a dramatic day of selling on Wall Street on Monday which was spurned by weakness in the technology sector. The previously strong FAANG stocks (Facebook, Apple, Amazon, Netflix and Google) are now down over 20 percent from their one-year highs, bringing them into bear market territory. Facebook shares headed lower after reports that CEO Mark Zuckerberg will be taking a more aggressive management style. Apple shares slumped after reports that the company reduced production for iPhones this year and that it has cut orders for its newest models. Tech shares were also under pressure because of reports of alleged misconduct in other tech brands including Micron Technology, Samsung and SK Hynix. The Nasdaq was the hardest hit, closing 3.03 percent lower, while the S&P 500 and the Dow Jones Industrial Average closed 1.66 and 1.56 percent lower respectively.

In Asia, markets also faced steep losses, with the Shenzhen Composite suffering the worst losses. The index was down 1.90 percent as of 1:10 p.m. HK/SIN. The Shanghai Composite was down 1.63 percent, the Hang Seng Index was down 1.83 percent and South Korea’s Kospi was down 1.14 percent. Japan faced its own troubles after the chairman of Nissan, one of the country’s largest car manufacturers, was arrested for financial misconduct. Former Chairman Carlos Ghosn was immediately removed from his position, but the damage spread to other companies as he was responsible for the alliances between Nissan and other automobile makers including Mitsubishi and Renault.

Currency Movements

On the currency markets, Bitcoin continued its downward spiral on Tuesday, plummeting to $4,630.57, a 15.27 percent decline since yesterday. The cryptocurrency is now more than 28 percent lower than its price last month. The fall of the cryptocurrency has spread to other cryptocurrencies and has also reflected investor jitters as the market takes a new turn.

The U.S. dollar was trading mixed again on Tuesday, easing slightly against the yen to trade at 112.53. The greenback rose slightly against the euro to trade at $1.1448. It was unchanged against the Canadian dollar.

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Morning Technical Newsletter-Global Stock Selloff Continues Amid Trader Fears

Global Stock Selloff Continues Amid Trader Fears

The global stock selloff that started on Monday continued into Wednesday’s Asian trading session as traders show concern about global growth. Tuesday was another difficult trading day on Wall Street with energy shares falling on lower oil prices and retailers struggling after weak earnings and fears about slowing global economic growth. The Nasdaq closed at a seven-month low on Tuesday while the Dow Jones Industrial Average and the S&P 500 saw their weakest trading day since October.

Asian markets were pressured on Wednesday by continuing trade fears after Washington criticized Beijing on Tuesday for failing to change its “unfair, unreasonable” trade policies. The condemnation of Beijing came from an investigation into China’s intellectual property and technology transfer policies which was a precursor to a meeting between U.S. and Chinese leaders at the end of this month. Most analysts are pessimistic about the potential for a deal to be reached at the upcoming meeting.

As of 2:02 p.m. HK/SIN all major Asian indexes were trading lower, with the exception of the Shenzhen Composite which was up 0.16 percent. Japan’s Nikkei 225 was down 0.22 percent, Hong Kong’s Hang Seng Index was down 0.04 percent and Australia’s ASX 200 was 0.51 percent lower. South Korea’s Kospi was also down 0.29 percent. The sea of red followed another brutal day of losses on Wall Street on Tuesday, with the S&P 500 closing down 1.82 percent, the Nasdaq 1.70 percent lower and the Dow closing down 2.21 percent. These losses followed a day of significant losses on Monday.

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Morning Technical Newsletter-Brexit Moves To End Of Second Act

Brexit Moves To End Of Second Act

Theresa May is expecting to endorse the withdrawal deal between the UK and the EU at a meeting of European heads of state on Sunday. However, this is not straightforward for a number of reasons.

Domestically, the “deal” has been widely criticised. Remainers feel that it gives away all the advantages of EU membership for no return. Brexiters feel it ties the UK too closely to the EU, potentially in perpetuity should it be impossible to find a workable solution to avoiding a customs border on the island of Ireland. They argue that it turns the UK into a “vassal state” forced to abide by laws that it has no hand in shaping (odd that this should come as a surprise to them so late in the day…). The DUP whose 10 MPs provide the government with a working majority claim that the deal is unacceptable since it could result in Northern Ireland and the rest of the UK having diverging trade rules.

Defenders of the deal claim that it is the best deal that could be forged between the two parties and that it will prevent a (now nearly universally accepted) harmful and chaotic no deal exit.

Whilst Mrs May appears to have escaped a challenge against her leadership of the Conservative party for now, critics suggest that it may come if/when the deal is rejected by parliament. Five members of her cabinet are said to be pushing for last minute adjustments to the deal that they want May to get the EU to agree to, but this will be a bridge too far.

However, criticism of the deal is not confined to the UK. The Spanish are threatening to refuse to endorse the deal (which means it would fail) unless the future trading status with Gibraltar is clarified and a number of nations are keen to see the future fishing rights between the UK and EU to be more clearly presented.

For her part, Mrs Merkel has stated that she is not willing to enter any negotiations with the UK during Sunday’s endorsement meeting (take it or leave it) and has strongly suggested that the EU ought not to change the text either.

My guess is that the EU will endorse the agreement as it is such that the political drama in the UK can come to a head.

May has been giving conflicting messages about the consequences of the UK’s parliament rejecting her deal. On the one hand she suggests that come what may, the UK will leave the EU on29/3/19 with or without a deal. On the other hand, she has suggested that a rejection of the deal could lead to “no Brexit” happening at all. One of her ministers stated that it would not be possible for the UK to leave the EU without a deal since parliament would never agree to it. In any event, the curtain will fall on act two of Brexit on Sunday. We must wait and see if act three reveals the beast to be a tragedy, a comedy or a farce, or just possibly, all three.

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Morning Technical Newsletter-Holiday Trading Can’t Stop Oil’s Decline

Holiday Trading Can’t Stop Oil’s Decline

Even thin trading due to the Thanksgiving holiday weekend in the United States couldn’t prevent oil prices from dropping to 2018 lows on Friday. As of 2:03 p.m. HK/SIN, U.S. WTI futures were down 2.58 percent to $53.22 per barrel. Brent crude futures were down 1.25 percent to $61.82 per barrel. Brent had fallen to $61,52, its lowest price since December 2017, earlier in the trading session, before rebounding slightly. WTI futures were trading within 5 cents of their October 2017 low on Friday.

Even hints from OPEC and Russia that they would be implementing a supply cut in the coming days did little to stop the decline or to calm trader concerns about the state of the oil market and the ongoing supply glut.

Oil prices in the U.S. are somewhat tighter than they are in other parts of the world, due to increased supply in the region. The U.S. is now producing at record highs and has become the world’s biggest producer. Russian and Saudia Arabian production is close behind – for the moment. Together, the three leading producers are yielding nearly 100 million barrels per day.

The high production itself wouldn’t necessarily cause prices to drop, but increased production coupled with the fear of a global economic slowdown which could reduce demand has caused oil prices to drop quickly, falling over 30 percent since last month. Saudi Arabia is lobbying for OPEC to reduce supply by up to 1.4 million barrels per day to prevent stocks from rising further. An official decision will be released after the group’s next meeting on December 6th.

In response to recent price movements, JP Morgan has cut its outlook for oil from an average of $83.50 per barrel in 2019 to $73 per barrel. JP Morgan has said that in order to balance the market, OPEC will need to cut production by at least 1.2 million barrels per day.

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Education post 18/100 – How to trade Bullish Flag Patterns?

Education post 18/100 – How to trade Bullish Flag Patterns?


There are many different patterns that traders follow to help time entries and exits. The flag pattern is one that tends to catch my interest when I find it because they can provide explosive moves. The GBP/AUD appears to be in the middle of a potential bull flag pattern. Today, we will look at how to identify higher probability trading opportunities off the bull flag pattern.

The flag pattern is fairly simple with just three components.

1. The flag pole
2. The flag
3. A strong up trend

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[GroundStone Holdings]

Morning Technical Newsletter-Stocks, Currencies Start Week Mixed

Stocks, Currencies Start Week Mixed

Asian markets were searching for direction on Monday as traders looked towards the meeting between U.S. President Donald Trump and Chinese President Xi Jinping that will take place at the end of the week. Monday’s choppy trading comes after a quiet holiday weekend in the U.S. that was marred by lingering trader concerns about global trade issues and the ongoing oil supply glut.

On the Asian markets, Monday’s leaders included South Korea’s Kospi which was up 1.24 percent as of 3:06 p.m. HK/SIN, Hong Kong’s Hang Seng Index which rose 1.44 percent by the late afternoon, and Japan’s Nikkei 225 which was up 0.76 percent. Australia’s ASX 200 fell 0.78 percent while China’s leading indexes, the Shanghai Composite and the Shenzhen Composite slumped 0.31 percent and 0.19 percent respectively.

On the commodities markets, oil prices recovered slightly from Friday’s widespread selloff that sent prices to 13-month lows. Rumors began circulating that OPEC will implement a ‘secret’ supply cut that will help boost prices without upsetting President Trump who has voiced public satisfaction about the declining oil prices. According to reports by CNBC and the Wall Street Journal, the cut would require Saudi Arabia to curb production by 1 million barrels per day. Brent crude futures jumped 2.19 percent on renewed trader optimism, bringing the commodity to $60.09 per barrel. U.S. WTI futures were 1.47 percent higher to $51.16 per barrel.

Currency Movements

In Europe on Sunday, EU leaders gave their official endorsement to UK Prime Minister Theresa May’s Brexit plan. The news sent European currencies higher, with the euro trading up 0.18 percent against the dollar to $1.1361. The pound was also up against the dollar, trading at $1.2825, a 0.10 percent gain.

On Sunday, Bitcoin prices fell below $3500 for the first time since September 2017, another steep drop since the cryptocurrency fell below the $6000 mark for the first time earlier this month. The cryptocurrency was trading at $4,010.01 in Asia’s late afternoon according to Coinbase, a 37.43 percent decline since last month, and a 35 percent drop since last week.

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DXY:

Intraday target: $97.03
Long-term target: $100

EUR/USD:

Intraday target: 1.3333
Long-term target: 1.0800

APPLE:

Intraday target: $172.30
Long-term target: $100

SPX:

Intraday target: $2570
Long-term target: $2000

GOLD:

Intraday target: $1220
Long-term target: $1183

USOIL:

Intraday target: $52
Long-term target: $40

BITCOIN:

Intraday target: $3500
Long-term target: $3000

ETHEREUM:

Intraday target: $104
Long-term target: $80

 

[GroundStone Holdings]

Morning Technical Newsletter-Brexit Sentiment Soured by Trump

Brexit Sentiment Soured by Trump
Investors’ sentiment for a Brexit deal soured in the overnight hours after the US President negatively commented that the Brexit deal might negatively impact trade between the US and Britain. While the Prime Minister is already fighting to get the backing of her own Conservative party to endorse the latest proposal in the Parliament, Trump’s comments couldn’t have come at a worst time. Analysts fear her Parliamentary critics will use Trump’s rhetoric to dismiss and deny the latest proposal, which has resulted in sell pressure for the Pound.

As reported at 11:55 am (GMT) in London, the GBP/USD was trading at $1.28, down 0.50% and off the session trough of $1.2734 while the high was recorded at $1.2820. The EUR/GBP is trading at 0.888 Pence, a gain of 0.43%; the pair has ranged from 0.88378 Pence to 0.88830 Pence.

Trade War Worries Build
Trump’s comments on trade, in general, have helped push the greenback broadly higher. On the flip side, higher risk currencies with ties to China are likely to soon see some negative sentiment as the trade war between the US and China escalates. Currently, the AUD/USD was trading higher at $0.7242, up 0.43% while the NZD/USD was trading at $0.6795, up 0.37%. The G20 summit begins on Friday in Buenos Aires.

DXY:

Intraday target: $97.50
Long-term target: $100

EUR/USD:

Intraday target: 1.1250
Long-term target: 1.0800

APPLE:

Intraday target: $173.50
Long-term target: $100

SPX:

Intraday target: $2660
Long-term target: $2000

GOLD:

Intraday target: $1212
Long-term target: $1183

USOIL:

Intraday target: $50.50
Long-term target: $43.00

BITCOIN:

Intraday target: $3750
Long-term target: $2000

ETHEREUM:

Intraday target: $106
Long-term target: $80