Implications of Risk (CAD, WTI and Bonus Chart)
CADJPY has been setting up to become a great selling opportunity on a macro-standpoint for the following reasons:
I was looking for a drop well-before today's action:
twitter.com/Lemieux_...s/691534271266328576
twitter.com/Lemieux_...s/693110115294121988
twitter.com/Lemieux_...s/694374130871721984
twitter.com/Lemieux_...s/694219668970737664
Fundamentals in a nutshell:
Price action rallied hard from an oversold position on two fronts: the rumor of a Saudi-Russian deal to cut production (which was refuted by Saudi twice), and the BoJ's decision to cut rates (which occurred as crude stalled). Clearly, if the production cut rumors amounted to something more than talk, clearly that is bullish. However, we must look at it as what is happening and what may happen (from highest probability) and not what we want.
The price action on the daily stalled within a long-term demand zone as both positive price action (+DMI) and ADX continued to slope downward. RSI is well out of oversold territory, which gives traders room to continue selling post-squeeze.
The stochastic indicator is giving a great sell-signal on the daily chart.
Note: indicators on tradingview do not mirror those on my MT4 but are close. I use a 9,3,3 on stochs.
BONUS CHART:
USDJPY, essentially risk appetite, is trending lower on the monthly chart (this particular chart I made last month but decided to show my awesome readers!).
If global fundamentals and aversion to risk occur as I believe, we could see 110 this year. I expect their will be more yen strength even as the dollar remains supported.
As I noted when I was on Dukascopy TV in 2014, the Bank of Japan is running out of "tool," as was unlikely to further increase QE. Moreover, traders would loose their faith in central banks and their ability to prop up markets. We're seeing that now.
Please feel free to comment and share charts! And follow me @Lemieux_26
Check my posts out at:
bullion.directory/ab...christopher-lemieux/
www.investing.com/members/200193197
www.teachingcurrencytrading.com
oilpro.com/chrislemieux
I was looking for a drop well-before today's action:
twitter.com/Lemieux_...s/691534271266328576
twitter.com/Lemieux_...s/693110115294121988
twitter.com/Lemieux_...s/694374130871721984
twitter.com/Lemieux_...s/694219668970737664
Fundamentals in a nutshell:
- CAD is highly correlated with WTI crudeoil, both on a fundamental and technical level. There still is no tangible catalysts to cause a significant rally in oil prices. Perceived catalysts have yet to amount to anything substantial. Still, there is no producer willing to cut production as of yet. Furthermore, the macro outlook for Canada is continuing to look like a poor one.
- JPY is a proxy for risk, which is signalling further turmoil in risk assets, and the correlation of such assets do not bode well for oil prices. Despite BoJ's meandering into NIRP territory, it has been dubbed a policy error almost as quickly as the Fed's single rate hike in seven years. Japan's Finance of Ministry may call of 10Y auction of bonds for the first time ever on fears of negative rates.
- Still forecasting the US business cycle ending, with a recession in 2016. As with my previous Russell 2000 posts (correct but early!), small caps are supporting the "FIFO" what it comes to domestic economic weakness. Still see a bear market in US equities.
Price action rallied hard from an oversold position on two fronts: the rumor of a Saudi-Russian deal to cut production (which was refuted by Saudi twice), and the BoJ's decision to cut rates (which occurred as crude stalled). Clearly, if the production cut rumors amounted to something more than talk, clearly that is bullish. However, we must look at it as what is happening and what may happen (from highest probability) and not what we want.
The price action on the daily stalled within a long-term demand zone as both positive price action (+DMI) and ADX continued to slope downward. RSI is well out of oversold territory, which gives traders room to continue selling post-squeeze.
The stochastic indicator is giving a great sell-signal on the daily chart.
Note: indicators on tradingview do not mirror those on my MT4 but are close. I use a 9,3,3 on stochs.
BONUS CHART:
USDJPY, essentially risk appetite, is trending lower on the monthly chart (this particular chart I made last month but decided to show my awesome readers!).
If global fundamentals and aversion to risk occur as I believe, we could see 110 this year. I expect their will be more yen strength even as the dollar remains supported.
As I noted when I was on Dukascopy TV in 2014, the Bank of Japan is running out of "tool," as was unlikely to further increase QE. Moreover, traders would loose their faith in central banks and their ability to prop up markets. We're seeing that now.
Please feel free to comment and share charts! And follow me @Lemieux_26
Check my posts out at:
bullion.directory/ab...christopher-lemieux/
www.investing.com/members/200193197
www.teachingcurrencytrading.com
oilpro.com/chrislemieux
