Weekly Risk Watch

April 11, 2016

Weekly Risk Watch:
Oil comes to the front of both Forex and Commodities traders watch lists this week as the world’s major producers both within and outside OPEC come together in Doha, Qatar.

The talks are a follow up talk on the current production freeze and encompass a wider range of non-OPEC nations. The discussion will centre around how long the production freeze will last as well as whether the $50 per barrel price target for Oil can be reached.

OIL Daily:
160411_oil_daily
Click on chart to see a larger view.

Last Friday’s Oil chart of the day highlighted price still below the 200 SMA but price has since chopped through previous support turned resistance without so much as a pause and is back testing the level.

Everything I have seen in the press to start the week has been positive, obviously reflected in the recent rally that we see here in Oil. This week’s trading is however going to be almost exclusively driven by headlines, something which is never a good thing for the clean, consistent moves that are easy to trade. Beware.

Moving onto Forex markets and we had some interesting comments out of Europe on the weekend as the Bank of France president Villeroy de Galhau, commented on the power of the ECB.

“The ECB is not short on ammunition.”

“What is lacking terribly is the second pillar, a major coordination of economic policy. For this reason, I also propose the appointment of a European minister of finance.”

Give power to a centralised body? This is the sort of chat that will push Britain closer to leaving the Euro… Exactly the type of thing that the ‘leave’ campaign will latch onto and use as a slogan.

GBP/USD Daily:
160411_gbpusd_daily
Click on chart to see a larger view.

There is still room to fall back toward the bigger bearish channel support on the daily.

GBP/USD 4 Hour:
160411_gbpusd_4hourly
Click on chart to see a larger view.

This 4 hourly support level just looks primed for a hard drop below after that many touches.

Enjoy your Monday!

———-

Chart of the Day:
Everyone is still on intervention watch from the Bank of Japan as the Yen hovers close to its lows from last week.

Something different I wanted to highlight was where the beast, GBP/JPY, was sitting on the weekly chart.

GBP/JPY Weekly:
160411_gbpjpy_weekly
Click on chart to see a larger view.

As you can see, if you draw up some fibs from the start of the trend line we had previously been watching, price is right on the 61.8% fib retracement.

With the momentum and fundamentals behind the move, I’m NOT suggesting to blindly fade the level, but it is interesting none-the-less.

———

On the Calendar Monday:
AUD Home Loans m/m
CNY CPI y/y
CNY PPI y/y

USD Fed Announcement

A couple of second and third tier data releases during today’s Asian session, so nothing to get too worked up about if you are entering some new positions early in the week.

Later tonight see’s one of the Fed’s ‘unscheduled statements’, discussing the discount rates to be charged by the various Federal Reserve Banks.

Do you see opportunity trading Forex and Commodities with Vantage FX? Take advantage on your own instant $50,000 Forex demo.

Dane Williams – @VantageFX

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