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    • Sterling Flash Crash To Fresh Crash

      currency trading strategies Comments Off on Sterling Flash Crash To Fresh Crash

      The effect of Sterling flash crash lasted longer than a flash.  Sterling is trading towards the flash crash low.  Will it break the key level of 1.20?

      The Brexit saga continues.  The latest episode is whether the court will rule that approval from Parliament is needed to invoke Article 50.  Parliamentary approval will delay the process beyond the first quarter of 2017.  If the court rule in favour of the approval, then we could see a rebound in the sterling.  Bank of England Governor Carney has expressed tolerance towards recent decline in the sterling; a weak sterling will go a long way to help the central bank to achieve their inflation target.  The GBP/USD current support of 1.21 is holding the fort, but for how long?  The flash crash has turned into a fresh crash for the sterling, creating a new low for the market to target.

      Dollar traded higher last week on the back of FOMC minutes and comments from various FOMC members.  Most members are opened to a December rate hike.  Even the most dovish member, Chicago Fed President Evans said he is open to a rate hike in December.  We would expect the dollar to remain strong on December rate hike expectation, unless there are downside surprises to the employment data in early November and December.

      Oil price has edged higher.  Russia President Vladimir Putin said last Monday, “Russia is ready to join in joint measures to limit output and calls on other oil exporters to do the same.”  WTI hit a high of $ 52 a barrel after the comment.   The momentum was lost towards midweek, because there were differences in opinion on the amount of output to be agreed upon.  This cast a shadow of doubt on the deal.  We could possibly see WTI heading to or beyond $ 52 if there is more concrete proof on the collective deal to limit production.  The rise in oil price has helped the loonie fend of the dollar bull.  This week is Bank of Canada (BOC) interest rate decision and rate statement.  With the recovery of oil price and positive data, with the exception of an underperformed CPI, we expect BOC to keep their interest rate unchanged and continue to maintain an optimistic outlook.

      Recent speculations on ECB’s QE commitment has aroused the curiosity of the market to hear what Mario Draghi has to say this week after their interest rate announcement.  We expect ECB to maintain their interest rate, but Mario’s tone in the statement and press conference will have impact on the market.  If he expresses confidence in Europe’s outlook, Euro should continue to be supported at 1.10.  If he expresses concern and emphasises on readiness for further easing, then Euro may head towards the next support of 1.08.

      Our Picks

      EUR/USD – Sell on rally.  Optimistic ECB statement could push EUR/USD towards 1.11.  Consider to go Short on Fed rate hike expectation after the rally.

      OIL/USD (WTI) – Breakout.  WTI is consolidating in a triangle.  Further news or rumours on production limit deal could result in breakouts.  Consider to Long/Short on the breakout of Resistance/Support respectively.

      XAU/USD (Gold) – Slightly bullish.  We expect Gold to remain in the range between 1250 and 1263, unless there are major surprises from the US data this week.

      Top News This Week
      (GMT+8 time zone)

      Canada: Overnight Rate.  Wednesday 19th October, 10pm.
      We expect figures to remain unchanged at 0.5% (previous figure was 0.5%).

      Europe: Minimum Bid Rate.  Thursday 20th October, 7.45pm.
      We expect figures to remain unchanged at 0.0% (previous figure was 0.0%).

      US: Philly Fed Manufacturing Index.  Thursday 20th October, 8.30pm.
      We expect figures to come in at 5.6% (previous figure was 12.8%).


      Mario Singh Official Website

    • Sterling Flash Crash!

      currency trading strategies Comments Off on Sterling Flash Crash!

      Sterling crashed more than 500 pips in minutes at the start of Asian trading hours last Friday.  Was it a case of “Fat-finger”, algorithmic trading systems or … ?


      The news in focus for last week was supposed to be the Non-Farm Payroll, but something happened 13 hours before the US jobs data, which shocked the market and had everyone scrambling for an answer.  The sterling plunged hundreds of pips in mere minutes at the start of the Asian session.  It was a shock to the market because there were no scheduled news or official statements at that point in time.  The market settled down after 10-15 minutes later, but the mystery of the plunge remains.  Hours later, theories started to surface.  Some point to possible “Fat-finger”, where dealer made an error while entering the price of an order.  Some point to comments made by French President Hollande, insisting UK must “pay a price” for leaving EU.  While others point to algorithmic trading systems for triggering massive sell orders at a time of low liquidity.  Investigation is still in progress by Bank of England.  Although we do not know what causes the crash, but traders can definitely draw some lessons from it:

      1. Have a Stop Loss in place
      2. Do not over-leverage
      3. Do not trade against the fundamentals


      Before the “flash crash”, sterling has been under pressure since the beginning of last week after UK Prime Minister Theresa May gave her clearest statement ever to invoke Article 50 by first quarter of 2017.  The path to exit EU is likely to be bumpy and slow.  UK will gain sovereignty in their policies but they will also need to pay the price for it.  Judging from recent data, UK is benefitting from their weak currency.  We expect upcoming UK data to reflect the benefit of a weak currency.  However, the price to pay for Brexit is likely to weigh down on the sterling.


      In midweek, the EUR/USD went through a little roller coaster after headlines reported ECB was considering tapering their quantitative easing (QE) before it ends in March 2017.  EUR/USD shot up briefly, but gave up most of its gain after ECB reacted and denied the tapering topic was discussed.  ECB is still a long way from their inflation target and impact from UK’s exit is unclear.  We expect ECB to continue with their QE until March 2017.


      Non-Farm Payroll came in at 156K, fell short of expectation and unemployment went up to 5.0%.  The data is not bad enough to write off a December rate hike completely.  We think the next Non-Farm Payroll would need to be an encouraging number of at least 180K, in order to see a higher possibility of rate hike in December.

      Our Picks

      GBP/USD – Range bound.  Unless there are fresh news regarding Brexit and Fed rate hike.  We expect GBP/USD to be range bound this week.

      USD/JPY – Slightly bearish.  USD/JPY may retrace towards 102 leading up to the next non-farm payroll.  December rate hike is still on the table.  Possible to consider near term Short or mid term Long.

      XAU/USD (Gold) – Slightly bullish.  Gold sellers may take profit while waiting for the next non-farm payroll.  Possible to consider going Long if price breaks above resistance around 1263.

      Top News This Week
      (GMT+8 time zone)


      Europe: German ZEW Economic Sentiment.  Tuesday 11th October, 5pm.
      We expect figures to come in at 3.7 (previous figure was 0.5).

      US: Unemployment Claims.  Thursday 13th October, 8.30pm.
      We expect figures to come in at 255K (previous figure was 249K).

      US: Core Retail Sales.  Friday 14th October, 8.30pm.
      We expect figures to come in at 0.3% (previous figure was -0.1%).


      Mario Singh Official Website

    • BOJ Governor Kuroda: Don’t expect JGB supply to run out for QE

      currency trading strategies Comments Off on BOJ Governor Kuroda: Don’t expect JGB supply to run out for QE

      TOKYO, OCTOBER 6, (CNBC): Bank of Japan Governor Haruhiko Kuroda said on Thursday that he does not expect the central bank will run out of government bonds to purchase for its quantitative easing program.

       Kuroda, speaking in the upper house budget committee, also said the BOJ is prohibited from directly underwriting government debt and that the BOJ conducts all its debt purchases in the secondary market.

      Kuroda also said quantitative easing will not lead to hyperinflation.

      Source: CNBC

      Mario Singh Official Website

    • Non-Farm Rules

      currency trading strategies Comments Off on Non-Farm Rules

      The main focus this week will be the non-farm payroll.  Will it boost or dampen December rate hike expectation?

      Last week’s volatility in the market were driven mostly by events rather than data.  Clinton beat Trump in their first presidential debate.  It was not a “significant” victory, as Trump did not lose badly.  Both parties still stand an equal chance of winning the election, which means uncertainties will continue to plague the markets.  Judging from the reactions seen in the markets, we have made a simple conclusion.  A swing towards Clinton favours the dollar, where else a swing towards Trump weakens the dollar.  Their next debate is scheduled for 9 October.  If Trump is able to turn the table around, the bear is likely to return to the market.

      A commercial bank hit the headlines last week; Deutsche Bank’s share price plunged to all-time low.  The German bank was slapped with a 14 billion dollar claim by US Department of Justice on investigations related to mortgage securities.  German Chancellor Angela Merkel’s recent comments ruled out any bailout for the bank from the government, struck fear in investors.  Without any bailout, many feared Deutsche may face cash issue and unable to tide over this crisis.  Many investors pulled out their funds.  If this situation continues, Deutsche may face the greatest fear of all banks – a bank run, which could possibly trigger a domino effect throughout Europe and the rest of the world.

      After months of speculations, OPEC has finally agreed to reduce production to as low as 32.5 million barrels a day.  The current output is close to 34 million barrels a day.  This is the first time in 8 years OPEC has agreed to such a deal.  WTI rallied beyond $ 48 per barrel.  The reason why we did not see a strong rally towards $ 50 is because the deal did not include non-OPEC countries.  Non-OPEC countries will have to play ball as well in other to benefit from the rising Oil price.  Central banks around the world, who are struggling to hit their inflation target, welcomed such a move.  If there are further actions to ensure oil price goes and maintains beyond $ 50, central banks could possibly see inflation edging closer to their targets.

      The Aussie is fluctuating between 0.76 and 0.77 cent.  As it stands now, there are enough uncertainties looming around.  Reserve Bank of Australia is unlikely to rock their own boat, we expect them to maintain interest rate and their neutral stance in their upcoming statement.  Fed will continue to hog the lime-light as they are the only major central bank in the world we have a chance of seeing a rate hike this year.  Investors around the world will be looking at the non-farm payroll this Friday to speculate on a rate hike in December.  A figure beyond 165K is likely to give the greenback some push.

      Our Picks

      EUR/USD – Slightly bearish.  A pennant has formed in the H1 chart.  If price breaks below the immediate support around 1.1225, may consider going Short.

      GBPJPY – Slightly bullish.  The support around 130 should hold.  The downside risk would be disappointing PMI data this week.

      XAU/USD (Gold) – Slightly bearish.  Possible to consider placing a pending Short order below the support around 1309 in anticipation of a favourable non-farm payroll.

      Top News This Week
      (GMT+8 time zone)

      Australia: Cash Rate.  Tuesday 4th October, 11.30am.
      We expect figures to come in at 1.5% (previous figure was 1.5%).

      UK: Services PMI.  Wednesday 5th October, 4.30pm.
      We expect figures to come in at 52.3 (previous figure was 52.9).

      US: Non-farm employment change.  Friday 7th October, 8.30pm.
      We expect figures to come in at 168K (previous figure was 151K).


      Mario Singh Official Website

    • Fed’s Janet Yellen: No fixed timetable for interest rate moves

      currency trading strategies Comments Off on Fed’s Janet Yellen: No fixed timetable for interest rate moves

      NEW YORK, SEPTEMBER 29, (CNBC): The Federal Reserve does not have a “fixed timetable” for removing the current accommodative stance, central bank Chair Janet Yellen told Congress on Wednesday.

      Still, many of her Fed colleagues indicated in their recent projections that it would be appropriate to remove some of that accommodation this year if no significant new risks arise, she added.

      Stocks declined slightly while Yellen was testifying.

      Yellen’s testimony follows the Federal Reserve’s decision last week to hold steady on the federal funds rate at 0.25 percent to 0.5 percent.

      Eventually, she said, continued job creation at the pace it has been running would cause the economy to overheat. If this happens, the Fed could be forced to raise rates faster than policymakers would like to, she added.

      Source: CNBC

      Mario Singh Official Website

    • Forex & Bullion Outlook, Thailand 2016

      currency trading strategies Comments Off on Forex & Bullion Outlook, Thailand 2016

      Mario Singh Official Website

    • MNC World News Interview, Jakarta 2016

      currency trading strategies Comments Off on MNC World News Interview, Jakarta 2016

      Mario Singh Official Website

    • Hike or Hike Not Continues

      currency trading strategies Comments Off on Hike or Hike Not Continues

      Fed hawks remain cautious.  Where will the dollar be heading this week?

      A summary of last week’s FOMC meeting, Fed interest rate remains unchanged.  Fed Chair Janet Yellen indicated a rate hike in 2016 is still on the table, if US recovery remains on track.  It is obvious investors will focus on US data in the upcoming months to speculate on the possibilities of rate hike this year.  There are two more FOMC meetings in 2016.  The November meeting is just before their presidential election, chances of policy changes before such a major political event is low.  That leaves us with only December for any possible rate hike announcement.  If their non-farm payroll remains around 150,000 on average for the next few months, the bet for December rate hike is likely to increase and strengthen the dollar.

      For this week, we have the consumer confidence, core durable goods and final GDP.  Consumer confidence and core durable goods are expected to drop slightly, while the final GDP to remain steady.  If there are no surprises, the dollar could be trading in a range this week.

      As mentioned last week, it would be difficult for Bank of Japan not to disappoint investors again.  And true enough, they did.  They only made modest changes to their policy with no indication of any further rate cut.  Although they maintained their inflation target, judging from the current situation, it would be difficult for them to hit their target without more aggressive actions.  A less hawkish FOMC coupled with a disappointing BOJ, drove the USDJPY towards the 100 level.  The 100 level could be an attractive price for the mid and long term investors.

      Reserve Bank of New Zealand held their interest rate unchanged as well.  In the official statement, Governor Graeme Wheeler said, “Further policy easing will be required to ensure that future inflation settles near the middle of the target range.”  This sent a strong signal to the market to expect a rate cut again before end of the year.  Since RBNZ has made known their intention, it would be wise to exercise caution before buying the Kiwi and look for selling opportunities after rallies.

      There are no central bank policy announcements this week, but heads of central banks are scheduled to speak in various events.  We do not expect them to deviate too much from their policies; Short-term volatility in the currency market may still arise from these speeches.

      Our Picks

      USD/JPY – Slightly bullish.  Fed rate hike is still on the table.  It would hurt Japan if  BOJ allows USD/JPY to fall below 100.  Can consider placing a mid to long term Buy position around 100 with a stop loss below it.

      GBPJPY (Gold) – Slightly bearish.  A strong downtrend with the immediate support around 130.50.  If price breaks the support, it would be a potential breakout trade.

      AUD/NZD – Slightly bullish.  Price rallies on dovish RBNZ versus a neutral RBA.  We expect the trend to continue, possible to look to go Long when price retraces towards 1.0450.

      Top News This Week
      (GMT+8 time zone)

      US: Final GDP q/q.  Thursday 29th September, 8.30pm.
      We expect figures to come in at 1.2% (previous figure was 1.1%).

      UK: Current Account.  Friday 30th September, 4.30pm.
      We expect figures to come in at -25.8B (previous figure was -32.6B).

      Canada: GDP m/m.  Friday 30th September, 8.30pm.
      We expect figures to come in at 0.4% (previous figure was 0.6%).


      Mario Singh Official Website

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