chris.weston

chris.weston

The cross comes and goes from the radar, but AUDNZD is the crowd favourite when we're talking central bank divergence trades. The NZ unemployment rate at 4% has opened up a small chance of a 50bp hike in the 18 August meeting, although given the recent tighter lending practices, the RBNZ will go 25bp. Go further out the swaps curve and we see the NZ cash rate at...

chris.weston

We see gold in a pretty neutral spot - although todays candle is defined as an inside bar and subsequently a break of Fridays high-low range (1812 to 1796 - 1 & 2) should set a clearer ST trend. On the upside sellers have capped rallies into the 38.2 fibo at 1814 (1), so a break here takes price to the weekly XAUUSD implied volatility move of 1841 - we can hold a...

chris.weston

Baidu has been savaged 50% in just 58 sessions and as a CFD trader I would always recommend buying strength and selling weakness, we may be looking at an inflection point in the bear move. Consider George Soros just announced a sizeable $77m purchase of Baidu, buying the weakness in several the stocks that were sold down in the Archegos blow up. If it’s good...

chris.weston

The Tesla daily chart is one I have been pushing of late, with the multi-year trend break getting some airtime. The new development is that price has closed through the 200-day MA for the first time since 18 March 2020. The last time price broke the 200-day it was a one-day affair before we saw a monster 412% rally over the coming 80 days. Naturally, it's hard to...

chris.weston

US payrolls have reduced the need to taper the Fed’s QE program at the Jackson Hole Symposium in August, and US rates markets have rallied accordingly. We now see December as a more likely setting, but let's see how hot this week’s US CPI will prove to be. Aussie data this week (NAB business confidence, Budget, retail sales) should be seen as vol event....

chris.weston

Retail traders have been primarily momentum and trend based, so with this in mind, lets keep it simple and look at the longer-term uptrend and assess price action around this support in the near-term. Perhaps Musk can pull it out of the bag and promote a resumption of the bull trend, but the headwinds are growing and if they lose the momo crowd, the shorts could...

chris.weston

The FOMC meet showed the Fed are in absolutely no rush to taper, and the USD has lost ground and should continue to do so in the near-term. Commodity currencies should remain in vogue, and as we see from the set-up, NZDUSD printed a bullish outside day, rejecting the move below the 5-day EMA. A close below the 5-day EMA will suggest more choppy trade and confirm...

chris.weston

A compelling set-up on the EURJPY daily timeframe. The preference is to wait for a daily close through and above the ceiling of 130.50 before entering longs, as this would confirm that the bulls have the impetus to push price higher, and potentially a series of higher high and lows. We currently see price above the 5-day EMA, and the cloud, so the probability...

chris.weston

Tesla is always a trader favourite and this quarterly earnings report should garner strong interest. Few stocks create such fierce debate as to the near and longer-term prospects, and when you get such dispersion in the expected outcomes you get movement and this creates opportunity. Movement is always a draw card for short-term traders and Tesla is the poster...

chris.weston

AUDUSD is holding above the 5-day EMA, having found a platform from horizontal support at 0.7560 (the purple line). Price has broken out of the consolidation zone and above the former neckline of the head and shoulder pattern. Price action and the broad structure suggest a risk of a move into 0.7800 and the highs from mid-March. Look to re-assess the trading bias...

chris.weston

Gold has its eyes set on the neckline of the double bottom at 1755 – a daily session close through 1755, with a build in the rate of change (ROC), and the technical target sits up at $1830. More work is needed, but gold bulls will be encouraged that price is holding above the 5-day EMA, which is trending higher. I also like the fact that price rejected the re-test...

chris.weston

Small caps have underperformed of late and price action in the Russell is testament to that. We've seen three bearish outside days this year, and granted the sample size isn't huge - a function of viewing this on the daily - but in the prior two episodes, we saw the index fall around 9.5% on average in 7 trading sessions. With bond yields creeping higher, amid ISM...

chris.weston

Arguably one of the most important charts in global macro, the USD is pushing the 200 day MA, and horizontal resistance.. a cup and handle is in play too, but needs a bit more work. An upside break here, likely driven by higher real rates, would have big implication on the well positioned reflation trade - that being a pause in the commodity rally, with equities...

chris.weston

The chart does all the talking - two clear trend support levels, the full retracement from the August highs (measured off the June-Aug rally). Conditions are grossly oversold, but could remain so if real yields don't move lower. I write about the catalysts here - pepperstone.com Warming to longs, but buying strength is always the way to go with gold

chris.weston

Looking at the distribution of implied outcomes through to 1/1/2021 (end of Brexit transition period) in GBPUSD, we can see understand the probability set (by the market) for levels to be tested through this time. This allows us to quantify movement (source: Bloomberg FXFM), help mange expectations and help with our risk management For more info on trading this...

chris.weston

Policy divergence can be a powerful strategy for FX trader and AUDNZD often comes on the radar as one to look at here - We can look at the Aussie cash rate futures, or 3-year Aussie govt bond and see this at 14bp – more easing from the RBA is coming in November, but its priced. The RBNZ are talking negative rates, and tiering this system – they will go hard, and...

chris.weston

With the LDP party election in Japan (Suga for the win), and the FOMC later in the week, USDJPY has been consolidating in a triangle formation, with the RSI mid-range. If we look at USDJPY 1-week implied volatility it closed Friday at 5.7%, which hardly screams of the market expecting fireworks in the week ahead and the implied move here is around 76-pips (higher...

chris.weston

With the FOMC out next week, it’s clear the Fed need to bring out the big guns – convince traders they can boost inflation expectations and bring down real yields (a weaker USD is helpful). So, there are upside risks for gold, but the triangle pattern can go either way and that needs to be respected when it goes. In the ST, daily implied volatility in XAU sits...