The Daily Edge is authored by Ivan Delgado, 10y Forex Trader veteran & Market Insights Commentator at Global Prime. Feel free to follow Ivan on Twitter & Youtube weekly show. You can also subscribe to the mailing list to receive Ivan’s Daily wrap. The purpose of this content is to provide an assessment of the conditions, taking an in-depth look of market dynamics – fundamentals and technicals – determine daily biases and assist one’s trading decisions.
The Daily Edge is authored by Ivan Delgado, Market Insights Commentator at Global Prime. The purpose of this content is to provide an assessment of the market conditions. The report takes an in-depth look of market dynamics, factoring in fundamentals, technicals, inter-market in order to determine daily biases and assist one’s decisions on a regular basis. Feel free to follow Ivan on Twitter & Youtube.
The Euro, the US Dollar, and the Canadian Dollar ended up as the best performers, while the Sterling went for a wild rise, initially boosted by Brexit positive headlines only for the market to realize there wasn’t much to chew on as I elaborate in today’s report, leading to the market to revert the entire move back down. Meanwhile, the AUD was punished in response to the unambiguous clarification by RBA Goveor Lowe that lower interest rates in Australia will be a consideration to make in the next June meeting. The Kiwi, highly correlated to the AUD, followed the aggressive sell side action in the AUD in locksteps as market participants now anticipate further easing measures by the RBNZ too. Lastly, the Japanese Yen, judging by the fluctuations in equities or fixed income, continues to trade under excessive supply effects, defying Intermarket flows logic.
* The Information is gathered after scanning top publications including the FT, WSJ, Reuters, Bloomberg, ForexLive, Institutional Bank Research reports.
The improvement in risk dynamics is evident by the bullish slopes in the S&P 500, both micro and macro, even if one must be respectful of the fact that the hourly structure still remains bearish. In the fixed-income space, the US 30y bond yield has gone up to the top of its weekly range circa 2.85%, which considering the fluid situation between the US and China, appears to be a fairly rich valuation. The DXY, through its price action, reveals bullish clues. The reason being is because a sudden aggressive supply candle was reverted back up in what’s often described as a V-shape rebound. Whenever this occurs, it’s a sign of underlying strength as setbacks are met by excessive demand pockets, hence sellers scramble to build acceptance, likely caused by outstanding unfilled limit orders. When it comes to the Yen, the bearish price action continues to really defy normal logic, which is why for hedging purposes, it starts to look very attractive to accumulate JPY longs to be hedged against longs on the ES or US30y, as the disparity between equity/stocks vs JPY performance widens. In terms of Chinese assets, USD/CNH continues to find a higher area of acceptance through the balanced achieved above the 6.93 bullish breakout point for more than 3 days now. As long as the Chinese Yuan remains with a bearish outlook, the risk profile should be relatively subdued. Lastly, the junk bonds and the VIX are on the verge of risk-friendly breakouts as both trades near the edges of its most recent balanced areas, which would encourage a further rise in equities.
EUR/USD: Range Expansion Eyed, Sellers Weak-Handed?
GBP/USD: Bounce Met With Supply Excess
USD/JPY: En-route To Next Projected Target At 110.80-85
AUD/USD: RBA Shifts Exchange Rate Bias To The Downside
USD/CAD: A Highly Messy Affair As Bottom-Side Liquidity Tested
Projection Targets: The usefulness of the 100% projection resides in the symmetry and harmonic relationships of market cycles. By drawing a 100% projection, you can anticipate the area in the chart where some type of pause and potential reversals in price is likely to occur, due to 1. The side in control of the cycle takes profits 2. Counter-trend positions are added by contrarian players 3. These are price points where limit orders are set by market-makers. You can find out more by reading the tutorial on The Magical 100% Fibonacci Projection