Daily Alert: For Thursday 14th April 2016

Mark Nugent2016 H1, April 2016, Daily Alert


Video Below
Fundamentals and Sentiment – New Information (Economic Calendar)

Numbers are quoted in the following format: (actual; expectation; prior.)

Tuesday night – news on the wire is that there are unconfirmed reports of an agreement to freeze oil production between Saudi and Russia. This has sparked a surge in the CAD.

Wednesday – China Trade Balance misses (195B; 203B; 210B) due to exports being higher than expected and imports less than expected.

US Core Retail Sales miss (0.2%; 0.4%; 0.0%, revised from -0.1%) as does PPI but the market is unperturbed.

Canadian Overnight Rate remains unchanged (0.5%; 0.5%; 0.5%). From the statement –

– Total CPI likely to reduce further before returning to 2.0% target, as the effect of the exchange rate passes through and low energy prices unwind.

– Raise annualised Q1 growth forecast to 2.8% from 1.0%, cuts Q2 forecast to 1.0% from 2.2%.

РForecasts average quarterly annualised growth at 1.7%, up from 1.4% .

– Output growth likely to be weaker as economy adjusts to lower commodity prices and weaker business investment.

Fundamentals and Sentiment – Market Reaction

Global stocks all up so clearly risk-on. Oil and commodities up. All seems bright. USD index rises significantly despite poor Retail Sales, on positive statements from multiple Fed members. JPY continues to weaken. All commodity currencies rise for the fourth consecutive day.

Fundamentals and Sentiment – Financial Media



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1. JPY Strength

Tempting although it is to jump in here, there is not a good technical setup. I will reconsider when we get to the last known place where there were real buyers, and that’s at the bottom of the channel around 110.6.

2. GBP Weakness

EURGBP at support. A poor statement tomorrow from the BoE may be a trigger for going long. You could trade this intra-day on the H1 or H4 charts or, as per my preference, assess tomorrow at 10pm BST on the D1 chart.

3. OPEC Meeting

At 10pm BST last night I assessed this trade. The news said that there were rumours that there would be agreement on a production cap. This caused oil to rise along with the CAD and push the trade further into profit. I was keen to hold onto this gain and felt that this kind of news-related move can quickly reverse. So I looked for in-the-money stops that made sense. Both the D1 and H4 charts gave in-the-money stops that I felt were too large. So I looked at H1 and set the stop 5 pips above the last bar of 12/4. It was triggered 5 hours later for a gain of 1.54% on risk of 1.00%.

4. USD

Nothing to report.


Euro – Final Core CPI y/y. The UK’s monthly interest rate, votes and Monetary Policy Summary jamboree. US Core CPI.


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