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Global Forex Outlook Pre-Bank Of Japan Emergency Meeting

Trade Desk Signal Outlook
 
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Global Outlook:
A burst of energy on Friday that reversed earlier 2% losses pushed risk and dead markets higher, and the Usd lower. That feat may be harder to repeat on Monday, with a quiet economic calendar and a U.K. Bank Holiday.
 
S/P futures held above 1050 on the week, but failed to break 1075 resistance. Over-bought oil trade may struggle to break 76.00, with any long-Dollar Index trades requiring S/P below 1060 and oil below 75.00.
 
Near-term Forex Signals:
Eur/Usd- Short because of potentially weak equities. Hedges long Gbp/Usd. Seven sessions of sideways moves now has the pair entrenched between 1.2950 and 1.2650, The only way this will break is following massive moves in equity markets.
 
Aud/Usd- Short on global growth concerns. Hedges any short Usd/Cad signals. Caught in the 2007/8 price range with exactly the same weekly chart set-up that dropped 40% in 4 months.
 
Gbp/Usd- Long in reaction to strong U.K. GDP numbers. Hedges short Eur/Usd. A mixed looking pair in regard to speculative interest and sustainable price action. A 200 pip range between 1.5600 and 1.5400 is in play.
 
Usd/Cad- Straddle long and short. Hedges oil and equity separation. A weak period of Canadian economics is in play, and with oil trade holding support Usd/Cad has found fair value at 1.0590.
 
Usd/Chf- Short in-line with short Treasury Yields. Hedge against short Eur/Usd. Looking for a near-term long reversal off any failed short tests of 1.0200.
 
Usd/Jpy- Looking for an emergency Bank of Japan meeting to move the Jpy overnight. A powerful reversal appeared at 90.00. A bearish trend is in place, with 86.00 a pivotal upside area.
 
Eur/Jpy: Long from reversals off support- Hedges short Eur/Usd.
 
Gbp/Jpy- Short for 15-20 pips that quickly lock in risk. Hedges long Gbp/Usd.
 
Global Markets:
The dollar index is holding 82.50 support at a time that the global market is buying and selling risk at will, and supporting the Treasury-based move to the Usd on days that stocks are sold.

The inverse correlation between the dollar and equities is in full force, and so long as S/P 500 futures trade is under 1075 the dollar will dominate Gbp, Eur, Cad, and Aud. Conversely, a weaker equity and Treasury yield market will empower Jpy and Chf. Favor both long and short near-term trade plan targets.

Asian, European, and U.S. equity markets recently put in volatile 4-hour chart swing point highs with sporadic moves and decreasing participation. That has allowed consolidation to take place around neutral swing points , with ESUO giving forex traders a great read each day on risk direction. On the days of ESUO S/P futures weakness the Usd gains ground, and vice versa. Favor both long and short near-term trade plan targets.

There has been a 10% slide in value since August 11th on WTI in response to weak equity trade, and that has allowed global growth question marks to put crude speculators on the back foot. The technical bounce off 70.75 looks to now favor Long trade plan targets.

The need to hedge the Usd moves has allowed gold trade to stake a claim to be a stand-alone asset class that seems to have few peers when global expansion is in doubt. Look to buy the dips and then favor the Long trade plan targets.
 


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