Initial claims for state unemployment benefits ticked up 2,000 to a seasonally adjusted 304,000 for the week ended April 12, the Labor Department said on Thursday, but stayed close to a 6-1/2 year low touched the prior week. Economists had forecast first-time applications for jobless benefits rising to 315,000. The four-week moving average for new […]

The post US Unemployment Claims Stay Close to 6 Year Low appeared first on MarketPulse.

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Factory activity in the U.S. mid-Atlantic region expanded in April at a faster clip than expected, a survey showed on Thursday. The Philadelphia Federal Reserve Bank said its business activity index rose to 16.6 from 9.0 in March, topping economists’ expectations for 10.0, according to a Reuters poll. Any reading above zero indicates expansion in […]

The post US Factory Activity Picks Up in April appeared first on MarketPulse.

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Canada’s CPI data for March came in at 0.6% on the month and 1.5% on the year. The forecast around 0.4% for the monthly rate, and 1.4% for the annual rate. Although not at the 2.0% target, the inflation rate in the past 3 months (Jan: 0.3%, Feb: 0.8%, Mar. 0.6%), eases any deflationary risk concerns. The annual rate also rebounded from the 1.1% in February, so it was a good sign that inflation stabilized and is working back towards the 2.0% target…

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Cable ($GBPUSD) bull theme re-energizing

  • We stated in our last report to clients on Wednesday that “we look for the 1.6625 level to hold this week to provide a platform for a push back higher, given the early April rally up through 1.6785 set a more bullish tone”.
  • A more robust tone through midweek for a prod back above 1.6800 and overnight a push to a new recovery high through 1.6820/25.
  • This now leaves the threat still higher to target a longer term level at 1.6877, potentially today and certainly into next week.
  • The risk for late April is now still higher to psychological 1.7000 and the multi-year high from 2009 at 1.7042.
  • WHAT CHANGES THIS?
  • Below 1.6625 eases bull risks; through 1.6550 signals a neutral tone, only shifting negative below 1.6465.

Please see full report with levels and latest audio-visual analysis here: http://members.marketchartist.com/Daily/GBPUSD.pdf

 Monthly GBPUSD

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      Treasury managers across the planet for multinational corporations are scurrying about this week in preparation for an event that rarely happens during the year – a four-day holiday weekend. It is truly a rare occurrence for banks and trading markets to be shut down for a 96-hour period. There are actually laws in the United States that prevent banks from being closed for more than 72 hours, but not so in many other countries in every region of the world. In Europe, it is called Easter Monday, as it is in British Commonwealth countries and others that couple Good Friday with the following three days to take time off for both family and religious reasons.

      Are you prepared from a trading perspective for the next few days? Treasury managers are busy hedging their foreign exchange exposures, primarily with options, but issuers of those options are also busy locking down their positions in the market, as well. These activities lead to anomalies in market activity that can provide an advantage for those that are willing to take a chance.

      Veterans, however, rarely encourage trading during the periods leading up and following extended holidays. The reasons cited mostly have to do with lower liquidity, wider Bid/Ask spreads, and whipsaw reactions to the slightest hint of event risk in the market, since a good portion of the trading community will be away from their desks, enjoying the festivities and the time off for good behavior. The sage advice is to join the revelers, since there are always new opportunities around the corner. You won’t miss anything.

      But wait — what about Post-Holiday trading? Let’s begin with the following chart:

      Believe it or not, there have been studies conducted to determine if there is a repeating pattern before and after holiday periods. John Kicklighter, one forex industry strategist, approached the topic from a highly skeptical position, but then was amazed at what he found. Here is a brief summary of his findings:

      • As expected, volatility and trends curbed their intensity, leading up to the holiday period. As market participants hedged their risks, a tight range formed. Without the disruption of a holiday, the momentum of prevailing trends might continue on until an economic event or profit taking stalled the pricing exuberance;
      • The holiday literally caused the market to stop and ponder the situation with a higher degree of scrutiny;
      • The resulting complacency gives way to a re-evaluation, and, in many cases, a strong move to change course takes hold, and a reversal occurs;
      • The activity of the USD, S&P 500, and VIX around holidays heavily favors a reversal on a statistical basis.

      The above chart presents the daily pricing behavior of the “EUR/USD” pair over Easter for both last and this year. In 2013, the market gapped lower, before reversing and heading directly for the 100-Day EMA, a prudent guidepost when none other exists. Fast forward to this week, and we see the market beginning its stall, once again. Treasury managers are doing their thing, hedging their forex exposures, while traders close open positions before Good Friday.

      The question is will the Euro fall this year to the 100-Day EMA again, as if on cue? Fundamentals and political pressure support a decline, but there will be resistance, as indicated by the prominent Kumo Cloud and diagonal support line. The odds may be setting up for a post-holiday trend, after all.

      In the forex world, all markets will not be shut on Good Friday and Easter Monday. There will be some activity somewhere, but liquidity will be strained. Are there other extended holidays? Ever heard of Boxing Day?

        continue reading »

            Treasury managers across the planet for multinational corporations are scurrying about this week in preparation for an event that rarely happens during the year – a four-day holiday weekend. It is truly a rare occurrence for banks and trading markets to be shut down for a 96-hour period. There are actually laws in the United States that prevent banks from being closed for more than 72 hours, but not so in many other countries in every region of the world. In Europe, it is called Easter Monday, as it is in British Commonwealth countries and others that couple Good Friday with the following three days to take time off for both family and religious reasons.

            Are you prepared from a trading perspective for the next few days? Treasury managers are busy hedging their foreign exchange exposures, primarily with options, but issuers of those options are also busy locking down their positions in the market, as well. These activities lead to anomalies in market activity that can provide an advantage for those that are willing to take a chance.

            Veterans, however, rarely encourage trading during the periods leading up and following extended holidays. The reasons cited mostly have to do with lower liquidity, wider Bid/Ask spreads, and whipsaw reactions to the slightest hint of event risk in the market, since a good portion of the trading community will be away from their desks, enjoying the festivities and the time off for good behavior. The sage advice is to join the revelers, since there are always new opportunities around the corner. You won’t miss anything.

            But wait — what about Post-Holiday trading? Let’s begin with the following chart:

            Believe it or not, there have been studies conducted to determine if there is a repeating pattern before and after holiday periods. John Kicklighter, one forex industry strategist, approached the topic from a highly skeptical position, but then was amazed at what he found. Here is a brief summary of his findings:

            • As expected, volatility and trends curbed their intensity, leading up to the holiday period. As market participants hedged their risks, a tight range formed. Without the disruption of a holiday, the momentum of prevailing trends might continue on until an economic event or profit taking stalled the pricing exuberance;
            • The holiday literally caused the market to stop and ponder the situation with a higher degree of scrutiny;
            • The resulting complacency gives way to a re-evaluation, and, in many cases, a strong move to change course takes hold, and a reversal occurs;
            • The activity of the USD, S&P 500, and VIX around holidays heavily favors a reversal on a statistical basis.

            The above chart presents the daily pricing behavior of the “EUR/USD” pair over Easter for both last and this year. In 2013, the market gapped lower, before reversing and heading directly for the 100-Day EMA, a prudent guidepost when none other exists. Fast forward to this week, and we see the market beginning its stall, once again. Treasury managers are doing their thing, hedging their forex exposures, while traders close open positions before Good Friday.

            The question is will the Euro fall this year to the 100-Day EMA again, as if on cue? Fundamentals and political pressure support a decline, but there will be resistance, as indicated by the prominent Kumo Cloud and diagonal support line. The odds may be setting up for a post-holiday trend, after all.

            In the forex world, all markets will not be shut on Good Friday and Easter Monday. There will be some activity somewhere, but liquidity will be strained. Are there other extended holidays? Ever heard of Boxing Day?

              continue reading »