Daily Alert: For Friday 20th November 2015

Mark Nugent2015 H2, Daily Alert

Today’s slides are HERE.

Today’s Economic News

The Fed’s Open Market Committee minutes came out at 7pm GMT last night. They clearly show a majority view that there will be a rate hike in December and the institutions are saying there is around a 70% chance of this happening. The Fed however also made it clear that the future course of rate increases would be very shallow compared to previous upwards cycles. The USD has sold off today. Bloomberg blame the FOMC minutes but they came out last night and there was an across the board fall in USD as of 1400 GMT. Strange. The GBP followed suit, as it often does.

BoJ leave their rate unchanged, make no reference to more QE, but note some weakness in inflation.

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Current Trades

A big move down today caused by GBP weakness and NZD strength both working against the trade. I will keep my stop where it is. The institutions expect a NZ rate reduction in December.

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The weak USD is also seen here in the EURUSD short position. A Bloomberg survey says the USD will weaken taking the pair up to the 1.08000 level. That’s still well below my stop.

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Today’s M1 Trades

I traded the UK’s Retail Sales event on demo. My short was triggered but I then made a mess of moving the stop to breakeven, moving instead the stop of the long trade. By the time I realised it was too late and I made a loss. It was not my finest hour. Still, the trade was fundamentally breakeven if traded correctly and, more importantly, it was another trade that did NOT suffer from the huge volatility problem.

Other Opportunities

The Canadian dollar is seriously weakened by the oil price. The USDCAD currently sits between the EMA lines. If it stays there at NY close it might be worth considering a long. Be careful of the continuation of USD weakness that we saw today – I’d want to be sure it was moving up before entering so if you use a pending order, place your entry accordingly and have a big stop.

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I am in the GBPNZD as you know and as it approaches my stop it offers an entry opportunity for those not in the trade. If it closes tonight between the EMA lines, that’s a good long setup. The further up the candle you make your entry, the more you can be certain the down move has reversed.

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