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Brief Consolidation and Breakdown:

The GBP/USD ended last week with a low of 1.6280 and consolidated after a poor NFP reading of 142K. However, the loss of US-strength was minor and brief, with a high at 1.6340 after the NFP-reaction. As we begin a new trading week, the GBP/USD dipped below 1.6280 down to 1.6164 with a gap.

Filling the Gap:
Now, the 1H chart looks oversold as the RSI tagged 20, and a near-term rally to close the gap is possible. Then we should expect sellers in the 1.6280-1.63 area. At this point, a break above 1.6350 might be needed to open up any meaningful consolidation outlook.

GBP/USD 1H Chart 9/8


The 1H chart is very bearish:
1) The 200-, 100-, and 50-hour simple moving averages are in bearish alignment, sloping down, and area spreading apart with price below all of them. This shows a bearish trend in full-throttle.
2) The RSI has tagged below 30 and even below 20, and also stayed below 60, even 50. This shows not only persistent but strong bearish momentum.

Bearish Continuation vs. Consolidation:
The above are*reasons to anticipate sellers on any intra-session rally. As noted before a break back above 1.6350 will be needed to shift the bearish outlook to a possibly sideways one, though it would still bear some downside bias at first, until we get a clear price bottom.

Support for the Current Decline:
Now, take a look at the weekly chart. Last week was one of the strongest bearish weeks in a while, and is extending a sharp downtrend toward at least the 1.60 area. Note that the 200-week SMA resides around 1.60.*Note that 50% retracement of the 2013-2014 rally is around 1.60. We should probably not expect any significant buying until this psychologically sticky price.

GBP/USD Weekly Chart


A more aggressive bearish outlook for 2014 will be the 1.5854 support pivot from Nov. 2013, down tot he 1.5722, 61.8% retracement level. We should probably expect price to consolidate around 1.60 after the current bearish swing. since July.

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The EUR/CHF has been persistently bearish throughout August. We can see that after a double top below*1.2177, price has been making lower highs and lower lows. The 4H RSI has tagged belwo 30, and has since held below 60, reflecting persistent bearish momentum. The 200-, 100-, and 50-period SMAs have been sloping down, in bearish alignment, and spreading apart until very recently. Price was also below all these SMAs until very recently. Thus the bearish outlook is very strong, but there are some early signs that the mode might be shifting.

EUR/CHF 4H Chart 9/8


First of all, price is starting to move above the 50-period SMA, showing that the pace of the bearish trend is stalling. We also see price breaking a falling trendline, but in a sideways manner. Again, we are seeing a shift from bearish to neutral, but there is still bearish bias because the RSI is below 60.

Now, the range of this price bottom attempt is about 45 pips. So, a break below 1.2044 with a 45-pip projection, targets the 1.20 handle. This is a very key level which we should expect support at because the Swiss National Bank had vowed to keep EUR/CHF above 1.20.

Because of this possible dynamic around 1.20, we might want to put away that bearish bias because price is already near this low, and trading into 1.20 might not be a prudent idea. However, the bullish outlook might need to be limited in the short-term.

The immediate target for a break above 1.2090 would be the 1.2035 area (using the 45-pip target). But we should also anticipate resistance if price gets in to the 1.2115-1.2120 area, which contains a support/resistance pivot area, and the 200-period SMA.

The daily chart shows that there is resistance around 1.2130-1.2140 as well. This was a previous support area reinforced by a falling trendline that originates from the 2014-high at 1.2394.

EUR/CHF Daily Chart 9/8



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U.S. consumer credit surged in July at the fastest pace since November 2001, spurred by increasing demand for student loans and auto financing.

Total consumer debt rose $26.01 billion to $3.24 trillion in July, reported the Federal Reserve on Monday. Figures for June were revised to take into account an increase of $18.81 billion from $17.26 billion. Economists in a Reuters survey had forecasted that consumer credit would jump to $17.35 billion in July.

“The only thing we have to worry about is there is excessive risk-taking in the auto sector,” Chris Low, a chief economist at FTN Financial, told Reuters. “But it’s still a good thing for the economy at least in the short term. Car sales are back to where they were before the financial crisis, which is remarkable.”

The last time consumer credit jumped was in November 2001, shortly after the 9/11 terror attacks, when loans grew $28 billion as large automakers offered zero-percent financing, among other incentives, in order to pull customers to the showrooms.

Revolving credit, which tracks credit-card debt, surged $5.34 billion to $880.5 billion, compared with a revised increase of $1.81 billion in June. Non-revolving credit, which tracks student loans advanced by the government as well as auto loans, rose $20.65 billion in July to total $2.36 trillion. This compares with a revised gain of $16.99 billion in June.

Meanwhile, U.K. retail sales rose in August, buoyed by rising demand for clothing and footwear, reported British Retail Consortium on Tuesday. Total retail spending jumped 2.7 percent from the previous year, compared with a gain of 1.3 percent in July.


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EUR/USD

EUR/USD fell sharply last week after the ECB announced surprise rate cuts and signaled further stimulus to come. It’s a double whammy for EUR/USD because the greenback also gained across the board. Then we had a brief consolidation on Friday after a poor NPF print of 142K. However, this was a very short-lived consolidation, and traders faded EUR/USD below 1.29 during the 9/8 session. As we get in the 9/9 US session, EUR/USD has 1.2860 and is showing signs for an intra-session consolidation, or bullish correction.

EUR/USD 4H Chart 9/9


1) The last 3 4H-candles form a classic reversal combination.
2) This candlestick combination pattern is occurring with a bullish divergence between price and the RSI reading, which is in oversold territory.

We can expect some near-term bullish attempt, but it might be limited to within the trading session, and sellers are likely to be defending the 1.2950 level, which was the middle of the last week’s consolidation.A break above 1.30 would establish a meaningful consolidation mode for the short to medium term. Otherwise, there is still downside risk towards a common low between April and July 2013 in the 1.2745-1.28 area.

EUR/USD Weekly Chart


EUR/JPY

The story for EUR/JPY is that it has been trading in somewhat of a descending triangle throughout 2014. The daily chart shows a common support around 136, while the highs continue to drift lower. At this point price is trading below the 200-, 100-, and 50-day SMAs, and the RSI has tagged 30 while staying below 60 for the most part. This shows bearish bias as price action threatens the descending triangle support.

The break below 135.70 should open up a bearish outlook that has the common lows in October and November 2013 in sight – around 131-131.20.

A clear break above 138.00 will be needed to shelve the bearish outlook. Note that there was an attempt last week that failed to stay above 138. This failed bullish attempt can be interpreted as a bearish signal, so we should brace for a breakout.

EUR/JPY Daily Chart 9/9




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The Shift in AUD/USD in 2014

AUD/USD was bullish in Q1 of 2014, rallying from a January and 2014-low of 0.8660 to 0.9461 in early-mid April. Price has since traded more or less sideways, with support at 0.92, but with a bullish attempt that made a new high at 0.9505 at the end of June. In July, price started to slide. We can say that this is the first sign of exhaustion – price unable to extend higher after making a new high. However, while exhaustion might signal some consolidation, it does not necessarily signal a bearish outlook.

AUD/USD Daily Chart 9/9


Price Top
When we look at price action from June through July, we see a rounded top, or even a head and shoulders. That will serve as a fractal to the larger pattern between April and now.

Let’s turn our attention to the current price action – a break below 0.92. This officially completes a price top, whether you call it a head and shoulders or rounded top, which signals a bearish outlook. Also, the RSI is falling below 40, which shows loss of bullish momentum.

Now there might be just one last challenge for AUD/USD-bears, or last line of defense for the AUD/USD-bulls. The 0.9180-0.9190 area contains the 200-day simple moving average (SMA), and the 38.2% retracement level. So, a break below 0.9180 should add confidence for the bearish outlook.

The first target for the bearish outlook would be the 0.9080-0.91 area, which contains the 50% retracement level, and a previous resistance pivot (made in February) that can be tested as support.

More Evidence for the Bearish Outlook:
The weekly chart also adds weight to the bearish outlook, and gives the confidence of further downside risk towards the 2014-low at 0.8660. You can see price falling back below the 50-week SMA. The weekly RSI is also held below 60 again, which shows maintenance of the long-term bearish momentum, established by the 2013- decline from about 1.0580 to about 0.8847.

AUD/USD Weekly Chart


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US retail FX giant GAIN Capital recorded weaker trading metrics in August, a report published on Wednesday showed.
Retail over-the-counter trading figures for August totaled $183.3 billion, remaining flat from July 2014. However, this was a growth of 48.8 percent from August 2013, which is a very spectacular performance considering that last year, FX markets were very vibrant.

Average daily retail volumes in all GAIN Capital’s ventures totaled $8.7 billion in August, a growth of 9.6 percent from the previous month. The figures also increased 55.9 percent from August 2013. The number of active client accounts totaled 92,911, a decline of 0.5 percent from July 2014. However, the figures rose 42.3 percent from August 2013.

The number of futures contracts stood at 512,731, a decline of 14.7 percent from July 2014 and a growth of 9.9 percent from August 2013. The average number of daily futures contracts stood at 24, 416, a decline of 6.6 percent from July 2014 and a growth of 15.1 percent from August 2013. The number of total funded accounts stood at 131,178, virtually unchanged from July 2014. However, this was a growth of 39.0 percent from August last year.

Though retail trading metrics stagnated in August from July, GAIN Capital’s institutional business reported lower trading figures, with volumes declining 12.7 percent to $344.7 billion. However, this represents a growth of 27.4 percent from August 2013.


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A former Saxo Capital Markets sales executive has joined IG Group in a similar capacity. Richard Elston, who was previously the Head of Institutional Sales at Saxo Capital Markets in London over the past six years, will serve as Institutional Sales Head at IG Group.

Saxo Bank was recently in the news after the exit of its long-serving CEO Torben Kaaber, who was succeeded by Mateo Cassina. Now with the departure of Mr. Elston, who worked for eight years, Saxo has a vacancy to fill in institutional trading desk. Mr. Elston also worked at Saxo as the Head of Bank and Brokerage Sales, and previously held various executive positions at CQG, SuperDerivatives and Standard and Poor’s.

Meanwhile, former Citigroup Forex Chief, Rohan Ramchandani, who was the first person to be dismissed after global investigations were launched over allegations of FX market manipulation early this year, has joined the London Capital Group as the Chief Advisor for FX Spot and Risk Management.

Mr. Ramchandani was sacked early this year on grounds that he colluded to manipulate FX benchmark rates in his capacity as the Head of European Spot FX trading, reported Reuters. However, an investigation is yet to begin and therefore he is yet to be formally charged.

Mr. Ramchandani will only trade in spot FX products that aren’t regulated, and will report to Peter Wells, the Head of FX at LCG.

“Rohan was an opportunity. The hire was a tough call and required an in-depth due diligence on his background and on his role in the probe. I am confident he will be able to help our growth with his competences,” said Charles-Henri Sabet, LCG Chairman.


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TeraExchange Launches a Swap Based on the Bitcoin

By Forexminute - Deepak Tiwari | Bitcoin | Sep 14, 2014 9:16PM BST




TeraExchange has announced that it has launched a swap based on the Bitcoin. Thus, launching the swap offer, the company has become the first to receive approval from a US federal regulator for a financial product based on the budding technology. This is one of the extraordinary decisions by the company for Bitcoin users.

Christian Martin, the head of TeraExchange says that for a merchant to take Bitcoin there was not until this product a regulated way for them to put on a hedge to manage the risk and now with this product they can.

According to the announcement it took TeraExchange, which was launched in 2010, almost half a year to get the product past the regulator.

According to the announcement the derivative allows clients to protect the value of their Bitcoin holdings by locking in a dollar value. Also, offering an insurance against the astronomical price swings that have plagued the computer-generated currency, the company is trying to provide a competitive solution.

A representative for the firm admitted that unlike conventional money, Bitcoin is independent of control or backing by any government; however, as there are various advantages associated with it, the company thought for swap based on it. The company is one of a handful of platforms to facilitate regulated swaps trading that sprung up after the crisis.

TeraExchange signed up some 50 clients

Also, it has constructed an index to gauge the value of Bitcoin that the CFTC was satisfied could not easily be manipulated – this can be the best feature for traders. Also, as the Tera Bitcoin Price Index was based on information from six different exchanges, the company said, a number it expected to grow.

The announcement says that TeraExchange signed up some 50 clients that were interested in the products. A lot of interest has been shown by merchants, hardware suppliers and the so-called miners who retrieve the Bitcoins from the computer programs that generate the virtual currency.

Thus, according to the company the swap which is available to trade from Friday morning is going to help the clients to great extent as they are going to get competitive services. Also, the company would now start marketing it to the new clients who wish to explore it. The company has received commitments from market makers, companies that offer prices for buyers and sellers to facilitate Bitcoin trading.


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Apple Stock Regains Buying Momentum – Sept. 15, 2014

By Forexminute - editor editor | Stock Tips | Sep 15, 2014 9:09AM BST




As predicted in an earlier entry on Apple stock signals, price has bounced off the resistance turned support area near the $97.50/share level, which is also right at the 50 simple moving average support.

Apple stock is now reflecting a return in buying momentum, after bouncing back above the $100/share level last week. Sustained gains could take prices up to the previous highs near the $102/share area or higher.

Apple Stock Forecast

After the initial volatile reaction to the launch of the new Apple gadgets and software, price is showing a resumption of the strong uptrend after the company announced a stock split earlier in the year. MACD is confirming the pickup in buying pressure, as it is showing signs of an upward crossover. Meanwhile, RSI has turned from the oversold zone and is also hinting a possible new leg in Apple stock rallies.

Apart from the iPhone 6 and iPhone 6 Plus announcement, Apple stock is drawing a lot of support from the Apple Watch and the new payment scheme introduced. Some industry experts predict that this might pave the way for revolutionary changes in the mobile and online payment sector, which might weigh on shares of Ebay and PayPal.
Bear in mind that the volatile reaction to the keynote address has been witnessed in past instances and is often followed by a strong bull run for Apple stock. Risk sentiment appears to favor more gains, although US equities might be in for a bit of weakness if geopolitical tension persists.

Later this week, the FOMC will make its interest rate statement and any commitment to keeping stimulus in place might drive equities and Apple stock higher, especially if the Fed also acknowledges recent improvements in the US economy. Recall that US stock indices reached new highs as the US printed strong data recently.


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Zennon Kapron Admits Cryptocurrencies Pose Financial Risk for Chinese Regulators

By Forexminute - Deepak Tiwari | Bitcoin | Sep 15, 2014 9:29PM BST





Zennon Kapron, a China financial expert and author of ‘Chomping at the Bitcoin’ gave a comprehensive interview to media wherein he admitted that the virtual currency poses too much of a financial risk for Chinese regulators at present and this is a reason that they are apprehensive.

Responding to a question about PBOC’s claims that the digital currency carries unacceptable risk, he said that individual Chinese nationals are allowed to convert up to US$50,000 currency every year to take out of the country and invest how they see fit. He added that in terms of the capital control, whilst that could be a risk he didn’t see that as being a primary risk.

According to Kapron the problem with Bitcoin is that it introduces unnecessary systemic risk. Thus, in his view as the government pushes forward with reforms the financial industry is already facing a number of challenges and headwinds in terms of shadow banking industry. This is what the Chinese authorities are worried about it.

In his opinion decreasing deposits at the state owned banks and increased competitive pressures from both the domestic and foreign banks coming into the market is another concern. He also talked about the future of the digital currency in China in the next couple of years and how he looks at the issue.

Bitcoin Mining is being done in Large Scale in South China Says Kapron

Kapron in his conversation said that he thinks Bitcoin exchanges will continue to exist in China and a few of these exchanges have external funding and so they need to find a business model to move forward with. Despite the fact that there have been warnings issued by the national bank authorities, Bitcoin transactions are going unabatedly.

With the People’s Bank of China (PBOC) regulations a lot of the traditional business of using Bitcoins to buy goods or services has been cut out of the market as well as the ability of Bitcoin exchanges to fund directly from bank accounts. He believes that a lot of those exchanges are looking at opening US dollar businesses offshore and expanding internationally.

China is also emerging as a leading hub for Bitcoin mining and according to Kapron there is a huge concentration of Bitcoin mining equipment manufacturers and actual mining farms in the South of the country. According to him the Bitcoin miners will continue because mining isn’t strictly illegal in China and very difficult to detect as well.


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