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katetrades
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I'm a currency trader with more than 10 years of trading experience. My trading framework involves both fundamental and technical analysis. Currently I'm working as a market analyst at Forex and CFD broker Trader's Way.
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  • AUD/USD: RBA Interest Rate Cut Setup (May 7, 2013)

    The RBA just cut interest rates by 25 basis points from 3.00% to 2.75% earlier in today's Asian session. This pushed AUD/USD below the support level around 1.0230 to a low of 1.0178 right after the statement.

    In past rate decisions where the RBA cut interest rates, the pair usually makes a strong break to the downside then makes a small retracement prior to the European session. The pair could still pull up to the 38.2% Fibonacci retracement level before heading any lower in the later trading sessions.

    A good entry point could be the 1.0230 mark, which is in line with the 38.2% Fib and the former support level. Stochastic is already heading lower on the 15-minute chart though, which suggests a further move down. After all, European and American traders have yet to react to the surprise rate cut earlier today.

    A stop above the highest Fib level or at 1.0300 with a target of 100 pips or more would yield a good reward-to-risk ratio for a day trade.

    (click to enlarge)

    Tags: Forex
    May 07 2:29 AM | Link | Comment!
  • Forex Major Currencies Outlook (May 7, 2013)

    USD

    The U.S. dollar bounced back on its feet in yesterday's trading when risk aversion popped its head back in the markets. There were no major reports released from the U.S. but the new set of economic problems from a few major economies kept risk taking in check. Disappointing Chinese and Australian data, as well as Draghi's remarks stating that the ECB was open to further easing, discouraged traders from parking their money in higher-yielding currencies. For today, there are no major reports due from the U.S. so the dollar could continue to trade on risk sentiment.

    EUR

    The euro started the week on a poor note as the shared currency slid back down against the U.S. dollar. As it turns out, ECB President Draghi said that the central bank is still considering further stimulus if necessary. This revived talks of negative interest rates since the ECB just slashed its benchmark rate to 0.50% last week. Only a few medium-tier reports are set for release from the euro zone today, starting with the French industrial production data and Germany factory orders. Weak data could continue to weigh on the euro for the rest of the trading day.

    GBP

    GBP/USD continues to tread carefully below the 1.5600 major psychological resistance level as though awaiting further economic clues. Unfortunately, there are no new pieces of data due from the U.K. in today's trading sessions, which suggest that GBP/USD could continue to move sideways. Be mindful of potential changes in risk sentiment though as dollar pairs have been selling off during risk-off market environments.

    CHF

    Switzerland's SECO consumer climate figure came in worse than expected as the reading landed at -5. Economists had expected a larger improvement from -6 to -3 for the past three months. However, the Swiss franc barely reacted to this report, probably because the unemployment rate held steady at 3.1%. No other reports are due from Switzerland for the rest of the day, which suggests that USD/CHF could either move sideways or be sensitive to market sentiment.

    JPY

    The Japanese yen regained a bit of ground against its major counterparts in yesterday's trading as the lower-yielding currency trumped the higher-yielding ones in a risk-off market day. There are no major reports due from Japan for the rest of the day, which suggests further risk flows from the yen.

    Commodity Currencies (AUD, CAD, NZD)

    The RBA just cut their interest rates by 0.25% in today's Asian session, pushing AUD/USD below the 1.0200 major psychological support level. This rate cut came as a surprise since Australian data hasn't been as bad as those of other major economies. There are no reports due from Canada but New Zealand is set to print its RBNZ financial stability report in the late U.S. session.

    Tags: Forex
    May 07 2:27 AM | Link | Comment!
  • USD/CAD: Trading The Ivey PMI Release (May 6, 2013)

    After last week's strong selloff, USD/CAD is currently stalling around the 1.0075 resistance turned support level. This is in line with the 50% Fibonacci retracement on the 4-hour time frame.

    During the previous release, the Ivey PMI came in much stronger than expected at 61.6. For the month of April, the Ivey PMI is projected to dip to 58.3, reflecting a slight slowdown in the manufacturing industry.

    A weaker than expected reading could trigger a bounce from USD/CAD's current levels back above 1.0100 while another strong reading might push USD/CAD to the next support level near 1.0020. Take not that this is in line with a former resistance area and is the 38.2% Fibonacci level.

    Stochastic is pointing down, indicating a potential move south, but the oscillator could turn as USD/CAD finds support at any of the Fib levels. A stop below parity with a target around 1.0100 to 1.0150 would yield a decent reward-to-risk ratio.

    After last week's strong selloff, USD/CAD is currently stalling around the 1.0075 resistance turned support level. This is in line with the 50% Fibonacci retracement on the 4-hour time frame.

    During the previous release, the Ivey PMI came in much stronger than expected at 61.6. For the month of April, the Ivey PMI is projected to dip to 58.3, reflecting a slight slowdown in the manufacturing industry.

    A weaker than expected reading could trigger a bounce from USD/CAD's current levels back above 1.0100 while another strong reading might push USD/CAD to the next support level near 1.0020. Take not that this is in line with a former resistance area and is the 38.2% Fibonacci level.

    Stochastic is pointing down, indicating a potential move south, but the oscillator could turn as USD/CAD finds support at any of the Fib levels. A stop below parity with a target around 1.0100 to 1.0150 would yield a decent reward-to-risk ratio.

    (click to enlarge)

    Tags: Forex
    May 06 1:00 AM | Link | Comment!
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