Non Farm Payrolls, the doubts of US economy disappear

The EURUSD was going down this morning but then it stopped. The traders were waiting maybe the most important figures of the month. Non Farm Payrolls was so much better than expected, 23% better than expected. What a really good news for the US Economy, they added 280000 people to the workforce. Also they have released a better: average hourly earnings, manufacturing payrolls, government payrolls and private nonfarm payrolls. The US unemployment rate was worse than expected but even with that it´s really good.
I was concern because the IMF suggested that the Fed should delay the rise of the interest rates until early 2016. But with today's figures I guess we will see this rise before the final of the year.

EURUSD 5Min

Also let me show the movement of the bond.

US 10Y T-Note 5Min 05/06/2015

As I commented some days ago, Greece has finally asked the IMF to bundle its June repayments to month-end. I will upload tomorrow a complete analysis of the EURUSD. Have a nice weekend.

#trading  #fx  #bonds  #US10Yt-note  #NFP  #NonFarmPayrolls

Why the EUR should go down?

I have three main reasons to bet that the EUR will go down against the USD. They are really simple to understand.
      -The upcoming rise of the US interest rates.
      -The accelerating buys by the ECB.
      -The problems with Greece.

1º Let me explain the things. Firstly the rise in the US interest rates, when a country rises its interest rates means that investing there is more profitable for investors. So they can draw money from abroad. This, can be really important because all the developing countries have interest rates near zero. Even when the FED denies this rise, sooner or later it will happen, and I guess that it will happen before the final of the year.

2º The Europe QE, the accelerating buys by the ECB tumbled the EURUSD last week. When a country injects money its currency lose value.

Simple Explanation of Supply and Demand

This explanation is really simple, but sometimes easy things help to understand. The reasons behind the movements are not as simple as that, but it depends about the timing of your trading strategy. You should have in mind all the things that can affect the Price.
To remark the importance of QE let me show you the next graph:

Behabiour of EURUSD Weekly  during US QE's . Source: www.axitrader.com

As we can see each time that the Fed releashed a quantitative easing the USD lost value against the EUR, maybe this is one of the reasons of the improvement of the US economy.

3º Again the problems with Greece. Tomorrow they will pay to the IMF, but we will see what happen in the next payments.
Also in my humble opinion Europe should be a real union, I mean, Europe should do a fiscal union and centralize some services.

#trading   #fx   #eurusd    #QE   #macroeconomics 

Where is the EUR going?

Firstly I want to say sorry because I haven´t written these two last days the EURUSD has risen a lot. Two days ago, the movement was greater than I expected.

Why does the EURUSD has gone up so quickly?
Let me sum up all the causes, I would divide on Tuesday and yesterday.
     Tuesday:
             -Good Spanish Unemployment change
             -Germany keeps 6.4% of unemployment rate
             -Astonishing UK construction PMI (55.9 vs 54.2)
             -Bigger UK mortgage approvals
             -Better than expected UK Net lending to Individuals
             -European CPI better than expected also Core CPI
             -Really bad US Factory Orders

      Yesterday:
             -Mixture of bad and good European Service PMI's (Germany and France showed good figures)
             -Good European Markit Composite PMI and really good Services PMI
             -Positive European Retail Sales
             -Better European Unemployment Rate
             -Better than expected US ADP Nonfarm Employment Change
             -Worse than expected US figures: Markit Composite PMI, Services PMI, ISM Non-Manufacturing Business Activity, ISM Non-Manufacturing PMI

The confirmation of the payment to the IMF by Greece has helped to boost the confidence in Europe. Also, a really good data for the Eurozone has helped the Euro to go up these days. I am quite skeptical about the situation of Greece. It is true that they are going to pay to IMF, but what will happen in the next payments. The opinions of the politicians are really different. Luis de Guindos, the Spanish finance minister, says that Greece won´t exit the Eurozone. In my humble opinion, it´s a really tough situation, if you are borrowing money you should reinvest this money and try to get bigger returns than the interest that you need pay to the lenders. It´s true that right now, the finance cost of Greece is cheaper than other countries that are in a better economic situation, but I think that its debt is really big.

Technical Analysis

EURUSD Daily 03/06/2015

As we can see in the chart in the last two days the Euro has strengthened according to the good inflation data of Europe. I keep the scenarios I say in one of my articles. For tomorrow this rate should move between 1.14474 and 1.10516.

 EURUSD Daily 03/06/2015

The major trend is bearish, but if the price goes above 1.14646 the bear trend will be finished. I can see some figures in the chart. The first one it's a triangle if this rate crosses the line above could go up even more if the price goes above 1.14646. If it breaks below it can look for the annual minimums.

EURUSD Daily Triangle



The next figure is a triangle, the explanation is the same.





EURUSD Daily Triangle

The next figure is a bear channel, I suppose it will go up a bit more and then it will fall.

 EURUSD Daily Bear Channel

Note
I quit my portfolio because I have to do some changes on the blog. I would like to create some portfolios, some of them discretionary trading and the rest will be algorithmic trading.
I have to admit that 2 days ago I did a big mess with my portfolio because when I did the analysis of EURUSD I didn´t include enough data to have in mind all the possible scenarios. When the price went more than X standard deviation I increased my position. So I would provide a new analysis including more sessions.
Have a good trading, keep on your rules and protect yourself from the improbable scenarios because sometimes happen.

#trading     #fx     #EURUSD    #Europe     #US

Up and Down EURUSD

During the Asian trading session the EURUSD went down reaching a minimum (1.08969), but the overnight movements of this rate usually are not important. Let me analyze what has happened today. During the morning the European PMI's has been released, all of them have been better than expected but not the German one (51.1 instead of 51.4 expected by the market). If the German PMI is bad, the European PMI will be bad. We have seen this affirmation today (European PMI 52.2 instead of 52.3 expected) Also, this rate has gone up because there was a rumor about a good conversation between Merkel, Hollande and Tsipras. I was short because I am quite skeptical with the problems that Greece has. The strengthen of the Euro has finished at 14:45 when the Chicago PMI showed a good figure (54). It wasn't better than the forecast but it's good enough to let the traders know about the improvement of the US Economy. Fifteen minutes later a really good ISM PMI was released. 52.8!!! What an amazing new for USD!!! This rate has fallen until 1.08889. Then it rebounded.

EURUSD 5Min 01/06/2015

Tomorrow you need to be aware of unemployment data of Europe, the construction PMI in UK, the Europe CPI and PPI and US Factory Orders. Also keep an eye on Greece, because it can be really important for the price of our rate.

As I said in my other article
The EURUSD has crossed the 1.09661 and then it went down really quickly. So I was right in my last article an is a really good level to have in mind.
Anyway keep on the rules of your trading strategy. What I express in this blog are only my opinions, you must have your own criteria. Good night, have a good trading day tomorrow.

Analysis of EURUSD daily

As I commented days ago I promised to upload a detailed analysis of the EURUSD.

The daily evolution of this rate is the following:

EURUSD Daily 29/05/2015

As we can see the major trend is bear. The most important levels for me are 1.14646, 1.09661, 1.07333, 1.04932. If the last two days bull trend continues and the price goes above 1.14646, it means that our bear trend will have finished by then. This scenario doesn´t have so much probability at the moment, but I think is good to have in mind. Yesterday the US figures weren't good and if we add the Greek confirmation of the payment to the IMF on the 5th of June, we realize the reason because it closed up. The next level is 1.09661, well EURUSD closed above this level, if the price goes below this rate it´s highly probable that this rate can go around 1.0733. For me the second scenario is the most probable, but we will see the evolution during the next week. The third scenario is that if the price goes bellow 1.07333, it will go down looking for the minimums of this year (1.04932)

Charting Analysis

EURUSD Daily

In the daily chart I draw a doble botton and two bear triangles.

EURUSD 4Hour 29/05/2015

As we can see the bear movements are more aggresive than the bull ones.

Statistical Analysis

I really like the statistical analysis because maths are always right, also you can realize about a lots of things.

N	312
Min Yield	-2,12%
Max Yield	2,14%
Range	4,26%
Intervals	20
intervals var	0,21%
Mean	-0,070%
Variance	0,0031%
Std Deviation	0,5586%
Variation Coef	-0,1255
Asymetric Coef	-0,1808
kurtosis	1,9232

This table represents the statistical analysis of the daily yield of EURUSD.

Maybe with this graphs I can help you to understand more or less the movements of the EURUSD. Also you can adapt your strategy. In the future I would add tecnical indicators, correlation with other pair of currencies, correlations with other assets. trading sistems. Anyway if you are interested in asking me something, feel free to ask me. Thank you, have a good weekend. 

Again EURUSD up!!!

For my own surprise, EURUSD has finished up, at least I have made profit. As I'm commenting these days I´m negative with the Euro. The main reason is the Greece doubts. Today Deutsche Bank has published a report of the different outcomes to the Greek tragicomedy. Let me share a link from Zero Hedge:
"The Greek Endgame Is Here": Probability Of IMF Default Now 70%, Says Deutsche Bank


The next reason is the rise of interest rates in US. I have another reasons but they are political. Europe in my humble opinion should be a real economic union, and agree a fiscal standard for all of the countries.

EURUSD 5Min 28/05/2015




This picture shows the trading session for EURUSD. I drew a resistance in the 1.09197 level but finaly was broken at 17:45. My forecast is that the euro should weak against the dollar. The US economy is improving step by step. In my opinion the implementation of the different QE's was successful at least for the markets.




What can we expect tomorrow?


This pair will move tomorrow between 1.10328 and 1.08797. The most important figures tomorrow are:
 -US GDP Price Index (QoQ)
 -Chicago PMI
 -Michigan Consumer Expectations
 -Michigan Consumer Sentiment

Good Luck tomorrow I wish you a good trading day. I will upload more detailed analysis in the future.

Difficult trading session for EURUSD

At the  beginning of the sesión EURUSD was falling until the 1.08250,showing the strenghten of the US Economy. In my opinion this movement was normal, but I was surprised when the price went bellow 1.08302 because this level was an important support for me. My biggest surprise has occurred when during the afternoon the price went up to the levels of the beginning of the sesión.

EURUSD 5Min 27/05/15

We have the Greece problem. J.P. Morgan said that: "Greece is not investable". But anybody know about the negociations. I'm not positive. Trading with these enviroment it's quite tricky because a little rumor can produce a big movement.

EURUSD 1Day 27/05/15

I think it should go down, but we will see. Keep your trading rules always. Have a good trading!!!