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Time for the biggest US jobs report since errr the last one

That means it’s time for the Non-farm payrolls competition!

So, a shocker of an NFP number last month took everyone by surprise. We all knew there was a risk of an outlier number, what with revisions and counting changes but no one saw that coming in our competition. The closest winner last month was 237k away!

Still, that’s what makes the NFP such a great event in our trading month, and this month is just as spicy. Because of the big number last month, this month’s will get a lot of scrutiny over its meaning for last month. For example, a -400k number this month could be seen in the context that across both months, jobs only gained 117k, which would be seen as weak. on the flipside, a -50k loss, while being the first negative print since late 2021, would mean an average across Jan & Feb of 233.5k, which is well in line with recent numbers. The reaction is likely to be a question of scale, based on the market’s reading of both months together. And, we haven’t even started on what happens if last month sees a big revision. All in all, it’s just another lottery for us to play with.

Anyway, enough of the waffle, let’s get into the competition.

On offer again is a free month of access to the Forex Analytix platform, for 3 lucky winners. All you have to do is guess closest to the NFP number on Friday.

The rules:

  • You pick a number as your guess for the Friday NFP number – 1 guess per person
  • First person who picks a number gets it (you can pick another number if your 1st guess is taken)
  • Closest to the number wins. In the case of a draw or split, the person who entered first by time gets it
  • Place your guesses in the replies on the tweet of this post (@forexanalytix)
  • Entries in by 12.29:59 GMT Friday

Want to know what fantastic services await on our platform??

  • Chatroom with news, research (inc Spanish speaking chatroom), and live trading room, where over 100+ intraday traders chat each trading session.
  • Quick analysis on 30 instruments.
  • Breaking market news and insight.
  • Super-fast live data releases
  • Daily key interbank FX order levels and updates
  • Full daily Forex option expiries and barrier report
  • Commentary and recent charts, formations and setups.
  • PIP (Pattern In Play). Where technical patterns identify potential moves.
  • Live market squawk integration
  • Top financial research
  • Web based platform with desktop notifications
  • App for mobile devices and tablets which offer push notifications when new analysis is posted or when key levels are broken.
  • Live (private) webinars exclusively for Forex Analytix members throughout the trading day.
  • Live charting
  • Money Management tool

Remember, even if you don’t win, you can still benefit from access to the platform via an exclusive ForexFlow 20% discount right here. This discount is for the life of your subscription, not just for a couple of months.

If you miss out on the prize, you can also get free access to the Forex Analytix Platform via our Traders Funding Program. You can check out the details here.

Good luck!!

US Dollar Blog Post

Correction On USD Has Room For More Gains – Elliott Wave Analysis

We have seen a major reversal on the markets in the last few weeks, firstly after the strong US jobs data for January and then also more dollar strength followed after worse-than-expected US CPI figures.

Is it time for the NFP domino to fall?

The Forex Analytix US Non farm payrolls competition is open for business

The last time we saw a negative NFP print was in January 2021, and many in the market have been surprised at the resilience of the jobs market while seeing some of the data being more negative? Does the winning streak continue in January, or will it be broken? One caveat to point out is the weather effect following all the winter storms in the US. This has impacted the reporting numbers in previous years. Could it impact this report?

If you have thoughts about the NFP number, here’s the perfect opportunity to put them to good use. Our NFP competition offers 3 lucky participants a free month on our Forex Analytix Platform and chatroom.

All you need to do is give us your guess for what you think the NFP number will be, and three of the closest to the NFP print will win a free month.

The rules:

  • You pick a number as your guess for the Friday NFP number – 1 guess per person
  • First person who picks a number gets it (you can pick another number if your 1st guess is taken)
  • Closest to the number wins. In the case of a draw or split, the person who entered first by time gets it
  • Place your guesses in the replies on the tweet of this post (@forexanalytix)
  • Entries in by 12.29:59 GMT Friday

Want to know what fantastic services await on our platform??

  • Chatroom with news, research (inc Spanish speaking chatroom), and live trading room, where over 100+ intraday traders chat each trading session.
  • Quick analysis on 30 instruments.
  • Breaking market news and insight.
  • Super-fast live data releases
  • Daily key interbank FX order levels and updates
  • Full daily Forex option expiries and barrier report
  • Commentary and recent charts, formations and setups.
  • PIP (Pattern In Play). Where technical patterns identify potential moves.
  • Live market squawk integration
  • Top financial research
  • Web based platform with desktop notifications
  • App for mobile devices and tablets which offer push notifications when new analysis is posted or when key levels are broken.
  • Live (private) webinars exclusively for Forex Analytix members throughout the trading day.
  • Live charting
  • Money Management tool

Remember, even if you don’t win, you can still benefit from access to the platform via an exclusive ForexFlow 20% discount right here. This discount is for the life of your subscription, not just for a couple of months.

If you miss out on the prize, you can also get free access to the Forex Analytix Platform via our Traders Funding Program. You can check out the details here.

Good luck!!

Results!!

Well, wow, a number that caught everyone off guard. 517k!!!

Obviously no one came close but winners we will have, and here they are.

  1. Alex @Alexandre3Dupuy with 280k
  2. GC Capital LLC @GCaptialllc with 250k
  3. Rick R @rick9757 with 245k

Well done to you guessers, even though you were all miles away 🤣

We will be in touch via twitter DM, or please message us at either @forexflowlive or @forexanalytix

Wow, still shaking my head at the number.

Thanks all for playing, have a great weekend and look out for the next competition.

Faster Slower Higher Lower Longer Shorter

The Forex Analytix February 2023 Central bank preview

The Fed

What’s expected?

  • 25bp hike.
  • Re-emphasise the high-for-long policy on rates.
  • Pushing the soft landing narrative.
  • A good start on inflation but more to do.

What are the surprises?

  • 50bp hike, or even unchanged.
  • Any indication rates may not get to the dot levels, i.e a pause is coming sooner than. expected.
  • Worries about wages and second wind upside effects for inflation.
  • Changes to QT (Bigger = Hawkish. Smaller = Less hawkish).

What assets should we watch?

  • US yields – 10yr, 2yr & 1yr.
  • USDJPY
  • S&P

Obviously USD all over but USDJPY can often be a cleaner trade, particularly as we have the ECB the next day. EURUSD might not move too far out of sync on the Fed while it has one eye on the ECB. Same for GBPUSD and the BOE. 

Let yields be thy guide for what USDJPY might do.  If yields move, do they hold? If not, don’t expect USD to stay the course either.

Monitor what stocks (S&P) does over the event. I’m still looking to see if the risk definition has changed. Do they go up if Powell pushes the soft landing narrative and keeps a hawkish slant? Do they keep to the old ways and rise if Powell is less hawkish on policy or less bullish on the economy?

 

The ECB

What’s expected?

  • 50bp hike.
  • Promise of more to come (2 more 50’s).
  • Reiterate they will continue until inflation is under control.
  • Also a good start on inflation but more to do.
  • Resilience in the economy.
  • QT to start in March.

What are the surprises?

  • Lagarde rolling back some on the 50bp promise.
  • Larger division among the ECB members for another two 50 bp hikes (maybe this comes from the usual sources pieces after).
  • Any changes to the upcoming QT program (earlier/later start, bigger than expected).

What assets should we watch?

EUR

I don’t feel that this event is going to bring any big surprises so reaction may be limited. However, there’s a risk here that EUR holds something back after the Fed just to get over the ECB hump, so be careful not to get sucked into a false sense of security until the presser is over. If, for example, USD is screaming higher but EURUSD looks like it’s holding back, it may play catch up when Lagarde is done talking. Then be on watch for the sources drops.

 

The BOE (with MPR)

What’s expected?

  • 50bp hike and confirmation of a drop to 25bp going forward, and a possible pause time.
  • Reaffirm the need to be vigilant on inflation being more persistent.
  • Change in forecasts

What are the surprises?

  • 25bp hike.
  • The votes – Last time 7 voted for hikes (6x50bp, 1x75bp), 2 voted for to keep rates unchanged. Likely we see the same hike/unch numbers but if more shift to the unchanged vote, that will be far less hawkish.
  • Statement/minutes show that rate hikes may not stop as quickly as expected.
  • Some pushback against the market’s year-end pricing of a rate cut.
  • MPR forecasts. Will the BOE be more bullish or bearish on the economy?

What assets should we watch?

EURGBP

Having the BOE and ECB so close together could present some interesting opportunities. For one, the ECB is the bigger bank so by size it favours EUR over GBP on big euro news. Secondly, if the BOE says or does something that kicks this out of sync with what the ECB are expected to do, that’s when it will get my keen interest. We’ve got some good range edges to play here. 

 

Generally, while there is room for some shocks, I don’t see anything that might be game changing. The Fed’s not going to say rates are going to 8%, the ECB are not going to announce rate cuts from next month. In market expectation terms, we’re pushing food around the plate. To that end, I’m going to be looking at trading the range edges over all these CB’s, if seen. But, don’t also forget the NFP on Friday, as that could turn everything from these CB meetings on its head (in USD terms). Get a hawkish Fed followed by a -300k NFP and that plate of food might be smashed on the floor.

Our ‘Wizard of Waves’, Grega has some excellent analysis on USD into the FOMC and Stelios has a great overview of central banks in the early part of this year.

US Dollar Blog Post

USD Trading In Fifth Wave Ahead Of The FED Rates Decision

Traders have been waiting on this week for a long time, a week of volatility and opportunities as central banks will most likely move the markets.

Chart of the Day – SPX500 – (January 18th, 2023)

 The SPX was creeping higher since the end of December, but we kept reminding our members that the trend remained lower as long as we kept respecting the descending channel.

Chart of the Day – WTI – (January 16th, 2023)

Crude Oil has reached a major pivot point of its move lower that started last year March and we are about to find out if the trend higher will be restored or we will remain in corrective mode.

Chart of the Day – USDCNH – (January 4th, 2022)

The USDCNH reversed lower last October and rode the USD weakness. Early December we broke through a H&S formation pattern and after a S/T consolidation we seem to be resuming the downside.