German Unemployment - Leaked Perhaps but good follow thru

This morning at 3:55 EST (8:55 GMT) the Unemployment data from Germany was released. It was a better print and with last night's agreement of Eurozone members at their latest meeting and also reports of a increased take-up by european banks of the next LTRO, the markets have been risk on.

Here is the data:

Germany Unemployment Change
Estimates- Median: -10k Average: -9k Range: -30k to +10k
Actual: -34k Prior: -22k Revised: -25k
Germany Unemployment Rates (s.a)
Estimates- Median: 6.8% Average: 6.8% Range: 6.6% to 6.9%
Actual: 6.7% Prior: 6.8% No Revision

The German DAX stock index had been selling off during the beginning of the european session, while the commodity currencies were rallying and the EURUSD and GBPUSD where holding near their swing highs for the overnight asian session.

Here is a 1 minute chart of the DAX, notice how it started rallying 3 minutes before the actual release:

Next is the 10 second chart of the EURUSD, the pair took out its swing highs from the Asian Session just below the 1.3200 round figure handle, making a swing low heading into 8:55 gmt:

Also the 5 minute chart of the EURUSD to show a bit more perspective of the overnight move leading into the European session:

UK GDP and MPC Meeting Minutes Vote Count - Lower deviation on GDP but no votes for raising APF leads to GBPUSD rally after sell-the-rumor move into the release.

This morning at 9:30 GMT (4:30 EST) the Preliminary GDP figures for Q4 2011 were released out of the UK. This came along-side the vote count of the MPC's January meeting, which complicated things a bit. There had been much talk of lower GDP figures for Q4 from various think tanks and the Chancellor of the Exchequer himself George Osborne. The GBPUSD forex pair had been near its highs for the week around 1.5615 as the European Session began, so no hint of selling this rumor of a lower print on GDP until about 15 minutes after the 8am London open, finally cable started to move down. Sometimes rumor lead moves can start the day before, but in this case it was just an hour or so before. Cable sold off 70 pips into the release and when the GDP did come out lower there was a slight further tick down for a lower low.

However the MPC Meeting Minutes Vote Count for the January Interest Rate Decision was released at the same time. Many are expecting the BOE to raise the APF (Asset Purchase Facility - the BOE'f name for QE or Quantitative Easing) even more as soon as February. However when the vote count came in unanimously at 9-0 against raising APF, this was bullish, even the arch-Dove Posen did not vote for it, although he has been talking about it. Raising APF is usually bearish for the GBPUSD because basically the bank is printing money, thus creating a larger supply of it and more supply means that its value is lower. However longer term raising APF can be bullish as it will stimulate the economy. When the BOE raised the APF on October 6th by 75 Billion, GBPUSD sold off quite hard to 1.5270, but then turned around and rallied non-stop thru-out October to 1.6165 on October 27th....anyway here are the Figures:

UK GDP (QoQ)
EStimates- Median: -0.1% Average: -0.1% Range: -0.7% to +0.2%
Actual: -0.2% Prior: +0.6% No Revision
UK GBP (YoY)
EStimates- Median: +0.8% Average: +0.8% Range: +0.2% to +1.1%
Actual: +0.8% Prior: +0.5% No Revision

Bank of England MPC Vote Count :
Unanimous to hold Rates Steady 0.5%
Unanimous to hold APF STeady at 275B


Here is the 5 second chart of the GBPUSD, you can see how initially price action was whippy and indecisive:

Here is the 1 minute chart of GBPUSD which shows the pair resolving higher after this intial wiggle (whippy on 5 second is a wiggle on the 1 minute), back to the 1.5600 round figure:

This 5 minute chart of GBPUSD shows the sell-off on the pair leading into the news starting from 8:15 GMT. This came off the 38% fibonacci retracement of the October 6th low of 1.5270 to the October 27th high of 1.6165 @ 1.5613:

This Daily Chart shows the fibonacci better:

Australian CPI - Conflict causes whipsaw which resolves higher

This Tuesday evening of January 24th at 19:30 EST (or 00:30 GMT on January 25th) the CPI figures were released from the Australian Bureau of Statistics. This is released quarterly like it is for New Zealand and unlike the USA or UK where it comes out monthly. Probably because it is only quarterly it seems to move the price of the Australian Dollar quite a bit. This data did become a bit tricky starting in 2008 when it split up into 3 sets of data with the Headline, Trimmed Mean and Weighted Mean. So 6 figures plus there revisions makes alot of numbers to look at. The past few releases all these have lined up more or less. In october the Headline was flat as expected, but the positive deviations on Trimmed & Weighted Mean lead to a rally in AUDUSD forex pair. This time we saw a -0.2 on the Headline and positive deviations on Trimmed Mean.

Here are the figures:

Australia Consumer Prices QoQ
Estimates- Median: +0.2% Average: +0.2% Range: -0.2% to +0.5%
Actual: 0.0% Prior: +0.6% No Revision

Australia Consumer Prices YoY
Estimates- Median: +3.3% Average: +3.2% Range: +2.8% to +3.6%
Actual: +3.1% Prior: +3.5% No Revision

Australia RBA Timmed Mean QoQ
Estimates- Median: +0.5% Average: +0.5% Range: +0.2% to +0.7%
Actual: +0.6% Prior: +0.3% Revised: +0.4%

Australia RBA Timmed Mean YoY
Estimates- Median: +2.4% Average: +2.4% Range: +2.1% to +2.6%
Actual: +2.6% Prior: +2.3% Revised: +2.4%

Australia RBA Weighted Mean QoQ
Estimates- Median: +0.5% Average: +0.5% Range: +0.2% to +0.7%
Actual: +0.5% Prior: +0.3% Revised: +0.4%

Australia RBA Weighted Mean YoY
Estimates- Median: +2.4% Average: +2.4% Range: +2.1% to +2.6%
Actual: +2.6% Prior: +2.6% Revised: +2.7%

The AUDUSD forex pair initially spiked down on the lower deviation on the Headline figure but then whipped around back higher on the better Trimmed Mean, there were also downward revisions. This seems to indicate that Trimmed mean is more important. Here is the a 5 second chart of the move on AUDUSD:

Basically the market probably expected a lower CPI figure to give the RBA move room to cut rates in February as most analyst now expect, this mixed CPI figure brings some doubt now to the likelyhood of that outcome. Here is a 30 second chart to show the way the AUDUSD forex pair resolved higher:

Finally the 5 minute chart of the AUDUSD forex pair shows how it came up to test the R1 pivot thru the asian session, bounced off, retested and slightly broke the former highs during the European Session before moving down on bad headlines about Greece & Portugal later in the European morning:

Canadian CPI - big lower deviation causes short spike and reversal

This morning at 12:00 GMT (7:00 EST) the Consumer Price Index was released out of Canada. This is the main inflation figures and were alot lower. Earlier in the week the Bank of Canada released their Interest Rate Decision along with a statement, and the next day there was a monetary policy report which did give some sense the Bank would be raising rates again at some point.

Here are the figures:
CAD Bank of Canada CPI Core MoM
Estimates- Median: -0.2% Average: -0.2% Range: -0.4% to +0.2%
Actual: -0.5% Prior: +0.1% No Revision

CAD Bank of Canada CPI Core YoY
Estimates- Median: +2.2% Average: +2.2% Range: +2.0% to +2.5%
Actual: +1.9% Prior: +2.1% No Revision

CAD Consumer Price Index MoM
Estimates- Median: -0.2% Average: -0.2% Range: -0.5% to +0.2%
Actual: -0.6% Prior: +0.1% No Revision

CAD Consumer Price Index YoY
Estimates- Median: +2.7% Average: +2.7% Range: +2.4% to +3.1%
Actual: +2.3% Prior: +2.9% No Revision

and here is a 10 second chart of the USDCAD, showing the spike from the news and then the reversal. CPI figures are a bit tough to trade in the current economic environment because interest rates are already lower, and the reason these figures traditionally have moved the currency is because they mean the Central Bank will adjust rates according to whether inflation is high or low...but this will not happen, although it does mean that Bank of Canada is less likely to raise rates again soon, which some had expected with the monetary report. USDCAD rallied from 1.0070 to 1.0150 from yesterday's new york session into today's CPI release, perhaps there was a leak, not surprising for Canadian Data. Anyway here is that chart:

and the 15 minute chart of the move heading into the release, also shows the 2 hours of whipsaw after the 12:00 GMT (07:00 EST) release, heading into the New York Cash Equity open at 14:30 GMT(9:30 EST):

UK Retail Sales - Mixed with lower revisions to previous month

This morning at 9:30 GMT (4:30 EST) the Retail Sales numbers for the UK were released. The expectations were up from last month and it is reporting for the Christmas period which is to be expected. The figures were mixed with the Ex Auto Fuel MoM 0.1 lower but the w/AutoFuel YoY coming in +0.2m, there were however some big downward revisions to the previous month, and the GBPUSD forex pair did sell off, which continued the trend since the 8:00 GMT (2:00 EST) European Cash Equity Open, when GBPUSD hit the big mid-century level of 1.5500 and sold off. This 5 minute chart shows this, but also shows the bounce after the news into the US open:

Note this is the high from Tuesday last week, before the pair got sold off on a rumor of a bad Industrial Production figure released on thrusday and followed the EURUSD down on Friday the 13th on the Ratings Downgrades by Standard & Poor's. Here is a 1 hour chart showing this:

Here are the figures:
UK Retail Sales Ex AutoFuel MoM
Estimates- Median: +0.7% Average: +0.6% Range: +0.2% to +1.3%
Actual: +0.6% Prior: -0.7% Revised: -0.8%

UK Retail Sales w/ AutoFuel MoM
Estimates- Median: +0.6% Average: +0.6% Range: 0.0% to +1.0%
Actual: +0.6% Prior: -0.4% Revised: -0.5%

UK Retail Sales Ex AutoFuel YoY
Estimates- Median: +1.7% Average: +1.7% Range: +1.2% to +2.3%
Actual: +1.7% Prior: +0.5% Revised: 0.0%

UK Retail Sales w/ AutoFuel YoY
Estimates- Median: +2.4% Average: +2.4% Range: +1.8% to +3.5%
Actual: +2.6% Prior: +0.7% Revised: +0.4%

and here is the 10 second chart of the Pound STerling versus US Dollar forex trading pair, GBPUSD:

UK CPI - Comes out lower as expected, risk-on rally continues

The Bank of England has been forecasting Inflation to come down this year. They have been saying this since inflation began to get very high last year, and it was the reason they did not go ahead and increase Interest Rates when things were looking a bit better in the middle of last year. And they made the right choice not to as when things got bad again toward the end of 2011 they actually raised the Asset Purchase Facility (the APF) by 75 Billion to 275 Billion. Which basically is Quantitative Easing or Printing Money. Although there was a wider range of estimates this month than last month (a 1.0% range compared to 0.4% in December 2011), the analysts like last month got it right and the main figure, the Headline CPI YoY came out at +4.2% as expected.

Here are the figures:

UK DCLG UK House Prices (YoY)
Actual: -0.3% Prior: -0.4% No Revisions

UK CPI (MoM)
EStimates: Median +0.4% Average +0.4% Range -0.2% to +0.8%
Actual: +0.4% Prior: +0.2% No Revisions

UK CPI (YoY)
EStimates: Median +4.2% Average +4.2% Range +3.6% to +4.6%
Actual: +4.2% Prior: +4.8% No Revisions

UK Core CPI YoY
EStimates: Median +3.0% Average +3.0% Range +2.8% to +3.2%
Actual: +3.0% Prior: +3.2% No Revisions

UK Retail Price Index
EStimates: Median 239.1 Average 239.1 Range 238.5 to 239.6
Actual: 239.4 Prior: 238.5 No Revisions

UK RPI (MoM)
EStimates: Median +0.3% Average +0.3% Range +0.1% to +0.7%
Actual: +0.4% Prior: +0.2% No Revisions

UK RPI (YoY)
EStimates: Median +4.7% Average +4.8% Range +4.5% to +5.2%
Actual: +4.8% Prior: +5.2% No Revisions

UK RPI Ex Mort Int.Payments (YoY)
EStimates: Median +4.9% Average +4.9% Range +4.7% to +5.2%
Actual: +5.0% Prior: +5.3% No Revisions

The GBPUSD forex pair actually rallied about 15 pips after the release as seen in this 10 second chart:

but this was probably just a continuation of the rally seen overnight since the better GDP, Retail Sales and Industrial Production figures out of China. However during the European Morning Cable again was the laggard as while the AUDUSD and EURUSD were near their respective highs for the day, the GBPUSD forex pair was 35 pips or so off its highs. The pair was frontrun ahead of its Daily R2 pivot but retraced back down to its R1 daily Pivot heading into the UK CPI news release. There is also the 50% of last weeks 1.5500 high to 1.5233 low at 1.5366. Here is a 5 minute chart which shows these levels:

Finally a 30 second chart of half hour or so leading into the 9:30 GMT (4:30 EST) release, which shows Cable bouncing off this R1 a few times heading into the release, and it makes a slightly lower low at this level right when the data hit the wire which punctuates the swing low and lead to a nearly 1.5400 the figure:

Higher Chinese GDP, Retail Sales & Industrial Production leads to Broad Rally in markets

Overnight at 2am GMT (9pm EST Jan 16th 2012) a bunch of figures were expected from China. There has been some worries that China would start to contract and this would not a good development with a debt crisis in Europe. About 10 or 11 minutes before the release the Xinhua news agency released the GDP data before it came out over the wire. There were also Retail Sales and Industrial Production numbers, all of which came out as expected or higher. This has at least for now pushed away fears of a contraction in China although the GDP is lower for the 10% it was in 2010 and approx. 9.5% area thru most of 2011.

Here are the figures:


China Industrial Production YTD YoY
Estimates: Median +13.8% Average +13.8% Range +13.8% to +13.9%
Actual: +13.9% Prior: +14.0% No Revisions

China Industrial Production (YoY)
Estimates: Median +12.3% Average +12.4% Range +11.8% to +13.6%
Actual: +12.8% Prior: +12.4% No Revisions

China Real GDP YTD (YoY)
Estimates: Median +9.2% Average +9.2% Range +8.9% to +9.4%
Actual: +9.2% Prior: +9.4% No Revisions

China Real GDP (QoQ)
Actual: +2.0% Prior: +2.3% No Revisions

China Real GDP (YoY)
Estimates: Median +8.7% Average +8.8% Range +8.5% to +10.2%
Actual: +8.9% Prior: +9.1% No Revisions

China Retail Sales YTD YoY

Estimates: Median +17.0% Average +17.0% Range +17.0% to +17.1%
Actual: +17.1% Prior: +17.0% No Revisions

China Retail Sales (YoY)

Estimates: Median +17.2% Average +17.3% Range +16.2% to +17.1%
Actual: +17.1% Prior: +17.0% No Revisions

China Fixed Assets Inv Excl. Rual YTD YoY

Estimates: Median +24.1% Average +24.0% Range +24.4% to +24.4%
Actual: +23.8% Prior: +24.5% No Revisions

The Australian Dollar is the best pair to trade on Chinese news due to the fact that Australia is a major trading partner and supplies China with alot of Raw Materials required for production of goods. Here is the first chart of the AUDUSD 1 minute which shows the reaction to the release. Notice that the move started 10 minute before the official 9pm EST release...it then chopped for awhile before leading on to rally further as the middle east and then Europe woke up and arrived at their trading desks.

and here is a 5 minute chart of the AUDUSD which shows some Key Levels from the lead into the Tokyo Open on January 17th 2012...it bounced off the 1.0300 round figure which was Daily Central Pivot (Yellow Line at the bottom of the chart)...the AUDUSD forex pair then moved back up to the 1.0336 area where the turquoise line is. This is the 61% fibonacci retracement of the October 27th high of 1.0652 to the November 23rd low of 0.9663. This level had been tested during the Monday January 16th 2012 trading session and bounced off it back to the 1.0300 round figure. When the Xinhua News Agency announced the GDP figures 10 minutes early this fib aread was broken and the pair pierced the R1 Daily Pivot as the figures hit the main wires at 9pm...this Pivot did stall the pair for awhile until more bids came in 20 minutes after the release, moving it to the R2 Pivot which it overshot with a strong candle but did fold over a bit until more bids came in to take it over the 1.0400 handle, this time with the R2 Pivot supporting the pair from below, giving it the foundation to lead the assault on cracking the 1.0400 figure. Europe opened and the pair tagged the 1.0433 area which is the 61% of the larger swing of the July 27th high of 1.1080 to the October 4th 0.9387 as German ZEW Economic Sentiment improved and not bad Bond auctions from Spain, Greece and Belgium occurred. More detail on ZEW in next post.

Scalping the Loonie USDCAD pair - Don't trade in low volume holiday markets?

Many will warn of the dangers of trading when volume gets light and liquidity in the market drains away in the run up to Christmas, Thanksgiving, Easter and the August Summer holidays. Well definately it is good to take some time off, recharge the batteries and unplug from the dam computer, eat real home cooked food and enjoy the company of friends and family...but why not make some pips if you are waiting for that turkey to bake or family to arrive or to catch your plane.

If you have some good analysis why not. Holiday markets can take 2 shapes, 1. moves can be exacerbated because some big-pockets can swing things around on the cheap, or 2. things might not move much at all or in tight ranges.

Today was Friday December 23st, how lucky that Christmas is on a weekend this year and the Forex market is open Sunday night December 25 all the way to Friday December 30th because somewhere on the planet they don't have Christmas...joking...lol. Not alot of news out of Europe but North America had Canadian GDP and the USA had a bunch of smaller economic news reports. I showed up and posted a chart of the Fibonacci cluster on the Daily Chart of the USDCAD to my members at SecretFXTrading and followers on twitter.

So the 38% of the late July 26th of 0.9405 to the October 4th high of 1.0667 comes in around 1.0179. Also the 38% of the same October 4th high 1.0667 to the October 28th low of 0.9894 comes in around 1.0184....but gosh that October 4th pin bar was such a beauty!!! Almost every major forex pair had a sharp reversal that day...only Cable the GBPUSD forex pair went lower to 1.5270 on October 6th when the Bank of England raised the 'Asset Purchase Facility' (APF) by 75 Billion to 275B....basically printing more money. More supply of paper, less value, however this was good news cloaked as bad because it will help the Economy, hopefully adding a few points to GDP, which would strengthen the Pound-Dollar...but perhaps it will raise inflation, which is a stealth tax...hmm good or bad or a bit of both....grey area, well you can shout, you can scream, but what offering solutions, we can all click a mouse button and place a trade, don't be too drastic, remember social cohesion, the status quo, don't want to rock the boat too much. Wow I got way off topic! Back the Loonie.

Anyhow the CAD GDP was basically flat, and all day the USDCAD pair bounced off this fib cluster. Generally I take 15-20 pips on either a half or a third of the position and move the stop to breakeven. Sometimes I stack entries and build a position up. There was a possibility that the 1st blue October fib level would break and the yellow july-early october fib would be tested which it nearly did but was front-run by a pip or two. Also notice how when the previous swing high was tagged the loonie would reverse back down into the fib cluster zone again for another go. Well how many times can you make 15-20 pips on half a position? After awhile you have racked up quite a few pips...of course it is easy to get greedy, hold the full position for a further move higher, just to get stopped out, give up your patience and leave the charts to start Christmas celebrations. Anyhow it turned out to be a good day and an extra nice bottle of champagne is in order. Here is the 5 minute chart of the fibonacci cluster zone mentioned above, with a summary of entries and exits, most exits were only half the position and the other half got stopped out, just to reenter...so did pay more spread than needed if the position had some more wiggle room but better safe than sorry, if the stop was 10-20 pips below there may have been a reason to hit it...remember the market wants to do business, even on Christmas.

Merry Christmas, Happy Hanukkkah or Happy Holiday

Magister Pips

Australian GDP - positive deviation leads to pop higher and then trend

Australian GDP is released only quarterly and has a good reaction to price. There are some issues with Australian data in terms of the way it is released. Apparently only the Interest Rates are released electronically while the other data is at first transmitted by phone so various news services pick it up at slightly different times.

Tonight's q/q data came out at +1.0% above the +0.8% expect and thus a +0.2 deviation above the median expectation. The previous quarter's release was also revised up from +1.2% to +1.4% so again a positive deviation. This is all for the quarterly figures.

There was also y/y numbers which were also higher coming out at +2.5% above the +1.9% median expectation for a +0.6 deviation higher. Also the previous month was revised from +1.4% to +1.9 for a +0.5 deviation.

First the 1 minute chart shows how the initial reaction all came in the 1st minute, then things went sidewise for over 90 minutes.

then after a pullback to the 61% fibonacci level of the initial news release reaction spike, price again turned to the upside to rally further. Here is the 5 minute. The price action was very similar to the September release, only with the exception that this time there was more of a pullback over 3 hours after the release before things further rallied, but again profit taking did occur an hour or so after the London open, just like September.

EURUSD short trade during London Open - Live Trade Room Forex Entry Signal

This Thursday morning Nov.25th 2010 we were live in the ProfitMongers Live Forex Trading Signal and Eduction Room when the EURUSD setup for a nice scalp trade short. It is Thanksgiving so the markets in the USA are closed, however there was still some decent price action during the European Session.

The chart shows how a initially at the 8am GMT London Open the EURUSD moved up to 1.3350, this corresponded with the 50% retracement of Wednesday's sharp move down during the European Session from 1.3413 to 1.3284. We did not get the live forex trade entry signal right on this fibonacci retracement level, rather we waited for price action to confirm a key reversal candlestick formation and some news hit the wires at 8:44am. Basically Moodys said they were placing several Irish banks ratings under review for a possible downgrade. The reaction was not automatic but when price showed us evidence of responding to this we did not hesitate to pull the trigger and enter the short EURUSD trade. As price moved in our favor, more news continued to come thru the news wires which supported the EURUSD short. ECB's Makuch said the Euro was slightly overvalued and then talk of an expected sovereign ratings downgrade for Italy was rumoured to be circulating the dealing desks. We took some profit around 1.3315 and were targeting 1.3290, but stretched this out to just above the big 61% fib of the September rally at 1.3270. The EURUSD 5 minute candlestick did close with a long lower wick doji right at 1.3290 while I was away, so this was a good reason to take the rest here, but regardless the stop loss was moved to lock in profit on the remaining position at 1.3320

UK Halifax House Prices Index initiates USD sell-off post FOMC

After the FOMC's announcement last nite to increase QE another 600 Billion, the major pairs (EURUSD, GBPUSD, AUDUSD) had retraced some of their gains. Prices had mostly consolidated below the FOMC spike high during the asian session and as Europe opened for trading price was near the lows of this mini-range, with EURUSD just above 1.41 and GBPUSD just above 1.61. The Halifax House Prices index for October had been on the schedule for tuesday, but it is one of these reports where the date and time of the release is not set in stone.

Having had a long day yesterday with so much news, this news really was not on the radar, and there is not much reliable past history to be totally sure about it. Regardless the number did come out higher and the pound responded instantly with a move of 20 pips in the first minute. Here are the numbers:

*(UK) OCT HALIFAX HOUSE PRICES M/M: 1.8% V 0.6%E; 3M/Y: 1.2% V 0.8%E
- Prior MoM revised lower from -3.6% to -3.7%

This release coincided with the London open and initiated a further USD sell-off against the majors, with EURUSD following the move up in GBPUSD in the next minute, and broke out of the consolidation range cut out during asia of 1.4105-1.4140. Prices shot up above the 1.42 handle without any decent pullback. However after consolidating above 1.42 for half an hour in the ProfitMongers Live Forex News Trading Room a trade was given to go long. Some 45 minutes later our target was hit near the big quarter penny at 1.4250 for 35 pips.