Daily Alert: For Wednesday 18th November 2015

Mark Nugent2015 H2, Daily Alert

Today’s slides are HERE.

Today’s Economic News

UK CPI came in on expectation showing a slight reduction of 0.1% year-on-year. US CPI also came in on expectation at an increase of 0.2%.

Perhaps the biggest news of the day is the third consecutive Global Dairy Trade negative number in New Zealand. It was thought that the dairy market had managed its supply and demand issues but now this is looking doubtful. This will add to the central bank’s dovishness, increasing the chance of a rate reduction sooner rather than later.

DA18 (1)

Current Trades

The poor GDT figure in New Zealand has helped to add more pips to my GBPNZD trade. Now up around 970 pips vs stop of 840 pips. I am relaxed about my stop being at entry but then I look at my charts regularly. If you cannot, you can move your stop up. Don’t get too close to the current price. ATR today on the D1 chart is 256 pips. Around 1.5 x ATR below current price as a minimum I’d say (i.e. no closer).

DA18 (2)

Monday’s EURUSD candle closed below the important 1.0700 line, offering a sell signal as explained in the Weekly Review and Outlook. I have re-entered the EURUSD pair on a pending sell order at yesterday’s low. It was triggered today. My stop is safely out of the way NOT at the obvious peak formed by last Thursday close and Friday’s open, but higher still, as indicated. The stop is 234 pips vs ATR of 96 pips. Risk is 2%.

DA18 (3)

Looking at the zoomed-out EURUSD chart below which shows the next support points and as such areas where this trade may stall, we can see that they are not very far away from the entry and may limit the reward:risk that we can expect from this trade. This is a reason to avoid this trade. However, I think the propect of more QE is such an unusual event that will have such a weakening effect on the Euro, I was prepared to take the trade as I believe the support will not in fact support this pair.

DA18 (4)

Today’s M1 Trades

As I mentioned in the Weekly Review and Outlook, I am going to trade important M1 events on demo only at the moment as I need to understand how important is the extreme volatility issue that I have seen a few times recently (fortunately not on live trades).

I traded both the UK and US CPI events today and I saw NO unusual volatility at all. This is good news. The UK event made around 0.8% and the US trade was break-even, both on 1% risk.

There is a single video detailing both trades HERE.

Other Opportunities

I do not see any other attractive set-ups at this time.