Ransquawk

Trading “bug” has bitten me

I read an article recently about a guy who was saying it is possible, as a trader, to train the eye to spot market levels and take positions accordingly. It was likened to a “sixth sense” of market stress points. He said that “traditional” technical analysis models and indicators can be “supplemented” rather than replaced by his method. I searched the author out on social media and we started corresponding.

His ideas intrigued me and led me to consider if this is just another way of saying that experience is the one commodity that cannot be taught when trading FX markets.

This thought in turn led me back to comments that were made to me when I spoke at last year’s Price Action event in Warsaw. I was approached by several attendees and asked that given my market experience, why I wasn’t trading. At the time this resonated with me but has stayed on my mind since.

So, I am pleased to say I have started to trade again but have had to limit myself as the old addiction returns. I must say so far so good. I am learning one other important factor too. Trading FX as an independent trader has completely different points of reference to trading professionally.

I will provide more insights into what I am doing in the run-up to FxCuffs next month.

Barnier’s comments start march lower

Sterling’s recent rally has petered out just as many similar rallies did during stage one of the Brexit process last year. While there was no official comment and negotiations were in a consultancy stage an irrational optimism grew and the pound rallied. Then. as soon as press conferences took place, reality set in and the pound retreated.

The same has been true so far this year. Following the capitulation of the UK Government which allowed the EU Commission to approve the move to stage two, a level of optimism, had grown which led traders to believe that the UK would get the transition deal it wanted and that a soft Brexit would be possible.

Since the start of the year, the Prime Minister has confirmed that the UK will leave the customs union and the single market, Brussels has rejected a City of London proposal over access to the financial passport and Michel Barnier has said that a transition deal is not a given.

Sterling has, predictably, recommenced its fall.

Last week’s Bank of England meeting illustrated the limited powers of the Central Bank, it seems that since it cannot influence Brexit the MPC has chosen to ignore it.

Data to be a major driver for next two weeks

It seems that since the U.S. employment report is released very early in the month that the rest of the monthly releases fade into the background. This is particularly true when the NFP has the effect of the latest data.

However, starting with today’s release of inflation data in the U.K, and all the way through until a week for, Friday, data will be significant in the short-term direction of currencies.

It is hard to predict today’s headline inflation data in the UK since it is expected to have fallen but last week’s more hawkish MPC comments bring some doubt. Tonight sees the release of growth data in Japan and this is expected to be weak leading to further (if that were possible) stimulation being added.

Inflation data in Germany tomorrow will provide a guide to Eurozone wide CPI which will be released on 24th. Prices have been quite stable across the region which has allowed the ECB to remain dovish on monetary policy. Q4 GDP will be released in the Eurozone and a rise from 2.6% to 2.7% is expected. The growth figures for the Eurozone are difficult to interpret since the region is still in its infancy and it is difficult to say what is strong or otherwise from such a diverse economy.

 

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