Sep9 – Market Analysis

Market update

  • Equity markets are fairly flat.  Gold and Oil are flat.
  • Nikkei has been rallying – because they were awarded the 2020 Olympic Games?
  • Chinese data has come out positively.
  • The CMC Markets ‘morning call’ does seem to be a rather useful summary of fundamental events – it doesn’t always come out around the same time – but usually it’s early – today it was at 7am.
  • There was also a landslide victory in the Australian elections, for a party that is expected to be more accommodative to businesses.  Could this start a long strengthening of the Aussie dollar?
  • Last week was a heavy one for the FX markets, with three interest rate announcements and NFP.
  • Spent time on the phone with Active Trades, to finalise the setting up of an account with them.

FX Market

  • CHF has been losing, at the expense of USD.  The strongest pairs are now USD, EUR and GBP.  CHF is neutral, with AUD and JPY being weak.  In terms of moving though, there is favourable momentum for AUD, GBP and USD and negative movement on JPY and CHF.
  • GBPJPY continues to be the only pair with a valid strength/weakness combination.  I looked at the 4H chart.  There was a big up-gap on Sunday night – from Fri close of 154.88 to 155.68 – around 80 pips – same as the prior week. Two of the completed candles have touched the faster MA, and bounced off it, turning it into bullish pin bars.  The previous highs on the daily chart are not far off, however in the bigger picture of things there’s a long way to go for this pair.  Well, price had last been beyond the previous recent highs in 2009 – 4 years ago!!
  • Well although there’s some argument from the 4H chart, the odds are against making a trade here (based on the traditional STAM strategy) because the previous highs are too close, and thus do not allow for a good risk-reward ratio.  Consider this trade again if the pair undergoes further retracement, such as back to the lows around 154.00.
  • None of the other strength/weakness combinations have a valid S1 or S2 setup.  Thus, no orders to enter into the market.
  • I am starting to have some frustrations with this strategy because it does seem to be a lagging one.  Will discuss this with my trading coach this week.
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