Currencies Trader
Currencies Trader
Trading activity will be minimal during the Christmas break.
The next activity is the ADP Non Farm Payrolls at on Jan 3 2019. This is an LLA so will be overshadowed by the HLA, Unemployment Rate the day after, on Jan 4.
Trading plans going into these events will made a day or two before.
Merry Christmas and a Happy New Year.
Jeepson Trading
Jeepson Trading have a unique method to determine the performance of an economy. This method is two form, firstly high level analysis which looks at the key indicators. And then, low level analysis which is an analysis of the indicators of the central bank’s focus area.
High Level Analysis (HLA) is the process of analysing the key indicators of an economy and determining the subsequent performance. The key indicators are as follows;
The individual performance of each indicator is analysed over a twelve month period to determine the the high level economic performance.
The Federal Reserve is the central bank of the united states who has a dual mandate to maintain price stability and achieve maximum sustainable employment.
At their previous meeting on November 8 they stated that the focus areas are the labour market and inflation. These can be monitored by reviewing the performance of the Significant Indicators (SIND).
Jeepson Trading have identified the following SIND that are to be monitored for the low level analysis.
High Level Analysis: strong economy with an improving outlook
Low Level Analysis: strong indicators with an improving outlook
BUY from the Support levels of Technical Analysis.
Even though there has been a mix of data, the trend has been improving over the previous twelve months.
The release due on November 28th is expected at 3.50 percent which will maintain the uptrend.
Central Bank focus points
measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments
Orders to buy are good at appropriate levels determined by Technical Analysis here
Image credits: Aron Van de Pol
The Federal Reserve are planning to raise interest rates again and a decision to do so is based on the performance of Labour and Inflation.
On review, the SUIN are in great shape and support buying the US Dollar.
The SIND have been identified based on the focus of the Federal Reserve.
All indicators are performaing well and I expect the Inflation Rate Month on Month is being closely monitored. Should this show a strong result then a December hike is highly likely.
On review, the SUIN are in great shape and support buying the US Dollar.
There are six indicators that are used to judge the performance of an economy:
Balance of Trade and Government Debt to GDP are the only two that have worsened over the previous twelve months.
The Federal Reserve are monitoring the labour market and inflation to decide on further rate hikes. Fed fund futures have over 70 percent probability that a hike is happening, however this has dipped from over 75 percent.
Photo by David Everett Strickler on Unsplash
The trend has been improving over the course of twelve months although more recently has been falling from the high’s of June and July of almost three percent.
The consensus forecasts the inflation to rise again following on from five releases of month on month stagnation.
Recent comments from the central bank…
…supporting strong labor market conditions and a sustained return to 2 percent inflation.
Photo by James Balensiefen on Unsplash
The trend is rising over a twelve month period, held steady for a six month period and could be considered to have declined over a three month period.
With a consensus of 180 thousand, nothing changes too much from a trend view.
| Chart | Trend Direction | Trend Break Zone |
| Day | Up | 111.40 |
| Four Hour | Down | 112.70 |
| Thirty Minutes | Up | 111.70 |
“The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation.”
Buying up the dollar from low risk entry makes sense fundamentally in the run up to Non Farm Payroll release.
Image credits: Aron Van de Pol
