Dollar Index and how to trade it profitably

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I really hope all is well with you. Last night we had the FOMC meeting and federal funds rate decision. There was no rate increase as expected but an indication that we are getting close. The statement was leaning towards the hawkish side and was reflected in the charts with the Dollar strengthening across the board.

The main points were and I quote “The labour market continued to improve, with solid job gains and declining unemployment,” It said that “underutilisation of labour resources has diminished,” dropping the previous word of “somewhat” to describe the change. These little word changes are significant as they are clues into the potential next rate increase and the direction of the Dollar.

Above is a chart which shows you exactly what is going on with the dollar index. The one thing that I have learnt over the last 15 years of trading is that in the summer period i.e. the last week of July and first couple of weeks in August, we see false breakouts and hence it is very critical that we chart pairs with accuracy and proficiency.

FOR DOLLAR BULLS: We will wait for the daily price to close back inside our triangle and then focus on a daily close above 96.70. I understand this is close but it is what it is. If you would like an even more confirmed long then wait for a close above 98.50 and you can target 100.00 and above.

FOR DOLLAR BEARS: Due to the current period we have to wait for a major break of support and this currently sits at 95.80.Once we close below here then we have a huge run to 93.25.

Have a wonderful day!

Whats happening with the KIWI and how to trade it

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WHAT IS HAPPENING TO THE KIWI?

KNOW YOUR FUNDAMENTALS

RBNZ LATEST ANNOUNCEMENT

The Reserve Bank of New Zealand (RBNZ) cut interest rates by 25 basis points from 3.25% to 3.00% last week.So many of my traders asked me why did the the kiwi go higher..this just does not makes sense,I wanted to shed some light for traders that are new to trading.
Always understand the currency that you are trading inside out.95% of the news is always priced in and this is what fundamental traders do. The only reason the price moves dramatically is if there is a surprise so when then RBNZ did the cut the rates by 25 basis points. traders were expecting a further cut,but lets have a look at other reasons the kiwi pushed higher.

Important factor number 1 :
Trade Balance:
New Zealand has been printing a trade surplus for the last 5 months and in June they took a turn for the worse from 371 million to -60 million.This is not the end of bad news for the kiwi,for the traders that are unaware 25% of New Zealand’s exports are composed of animal products ie fresh cheese,butter,cream etc. and one of the biggest contributing Fundamental news events is the GLOBAL DAIRY TRADE PRICE INDEX.This particular index has been slumping for around 9-10 auctions.The latest drop was around 10%.Not looking good at all. New Zealand also exports metals such as iron and aluminium, yet again the aluminium prices were down by 6.4% along for the third bad month for the ANZ’s commodity price index slumping by 3.1%.

Important factor number 2 :
Consumer Sentiment:
The consumer confidence index slid around 4.2 points, guess it is still okay not too bad but the general consensus was that consumers were not confident at on the economic times ahead due to the lack of faith in the government policies.Well that’s what you get when you have a gambler
running the economy. The employment confidence also fell slightly for the 2nd quarter by around 5.8 points which again adds to the overall confidence.

Important factor number 3
Business conditions & Sentiment
The business confidence survey showed a decline from 15.7 to -2.3 and this is the first time we have seen this since 2011.I guess as you can see the the nations exports depend up on dairy and as i said previously when these decline it affects overall business sentiment.

Important factor number 4:
NZ Business Confidence
The manufacturing sector was also pretty downbeat with a reading of -16.9. All sectors were optimistic in terms of investment, except for the agricultural sector since it printed a -15.5 reading. That’s probably because it makes no sense for an investor to invest his hard-earned on a sector that is seeing more competitors and shrinking demand.
The New Zealand Institute of Economic Research (NZIER) also released its own report and it followed the ANZ’s downward trajectory, although its readings weren’t as pessimistic since the actual reading printed a 5.0 (23.0 previous).

Important factor number 5:
Inflation
Q2 2015 CPI saw some improvement, rising by 0.4% after dipping by 0.3% last quarter. Surprisingly enough, the primary driver for inflation was the transportation group due to an 8.8% increase in petrol prices and a 11.0% increase in diesel prices, thanks to higher crude oil prices and a weak Kiwi.The main drag to inflation was the communication group which printed a 1.9% decline in telecommunication services “influenced by price falls and better value plans.” Food products were also a major drag, thanks particularly to an 8.7% drop in seasonal fruit prices.

PLATINUM SENTIMENT ON KIWI: BEARISH

Oil heading for 43$ and potentially lower

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Good Morning traders

Iran finally reached a nuclear deal with six major powers after years of talks on Tuesday, which sent oil prices lower. This is exactly what we were seeing coming, because hopes of sanctions are lifted off, will enable Iran to directly sell its oil to the West. If you would read our fundamental at platinum trading systems you would understand that oversupply of oil will push its price lower.

There are some nations including Israel and Saudi Arabia who strongly object this deal, which could result in more tensions in the region and additional oil price slump. Politically, this could be a tough call because these countries believe lifting the sanctions will give the Iranian regime a free pass to build nuclear weapons. On the other hand, the driving force behind this deal to me seems to be Iran and America’s common enemy: ISIS.

BOTTOM LINE OIL WILL GO LOWER AS WE HAVE NOT SEEN THE AFTER EFFECT AS OF YET.

 

TECHNICAL VIEW ON OIL

The charts to the left clearly show you the direction of oil: DOWN.

Here is a chart for the last 3 years which shows us that we have not changed the trend. Now the post here in concern says oil to hit 75$ to 85$ by the end of the year…..What I believe is the following First of all we need to close above this massive bearish daily trend line that has been holding for the last 3 years. If we see the price of oil at any point above 63 $ then we have a chance otherwise we could be heading to break the low of 43$.

Have a wonderful weekend

Kind regards

The Platinum Team

 

Long USD/SGD, perfect trade set up

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Good Morning Traders

USD/SGD
This pair has now complete the technical triangle formation by meeting the technical requirements:
What are the technical requirement for a valid triangle ?Both upper and lower trend line’s have three
perfect touches to form a perfect triangle.
In the short term, whilst USD/SGD holds this price at 1.3520, there is opportunity
for the USD to rally towards 1.4054
How do we trade at platinum:
Its called the three 10’s:
Each angle of trading should be given a score in trading:
A) Technical Requirement to take a trade should be given 10/10
B) Logical Reasoning to take a trade should be given 10/10
C) Fundamental Reasoning to take a trade should be given 10/10

If all these match up it’s the perfect Trade.

Long USD/[email protected] with a 50 pips stop loss as this is a cross pair.( At Platinum Trading systems we never use stop’s more than 35 pips unless we are trading a cross pair) and the target on this pair will be 1.4054 which is a total of 534 pips we will update the chart if the trade gets activated.

Wish you all the best
Platinum Trading Team

Greece and another can kicking exercise

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Good Afternoon Traders,

Well, what a shock! The Greeks and Eurozone have almost come to an agreement. Did we expect anything else other than a can-kicking exercise? Significant hurdles still need to be overcome before the deal is finalised and what’s more, the negotiations over debt restructuring, which have been put off again, may yet prompt a Grexit. There is, of course, a debate over whether Grexit would be positive or negative for the euro itself.

At some point, the politicians will have to take their heads out of the sand and deal with it.

Will Greece agree to the new plan on Thursday now, they’ve basically had to barter to survive with the banks closed for two weeks? Or Will they leave the euro zone altogether?

I suspect Greece will go with the new plan out of fear. They’ve had a look at what life outside the euro zone would look like over the past two weeks; I imagine it hasn’t been pretty hence why Tripas has folded accepting tougher conditions than were previously negotiated

Greece’s government owes for 323 billion euros. 75% of that goes to foreign creditors.

Germany holds the most Greek debt at 92 billion euro.

The others hold less.

France holds 70.3 billion.

Italy 61.5 billion.

And Spain just 42.3 billion.

If Greece defaults, that money is largely or totally gone!

Is there light at the end of tunnel?

I would say it’s almost certain they will agree on Thursday and we should at least for a short while be able to refocus on monetary policy and growth divergences between the US, Eurozone and other countries, such as the weakness in safe haven currencies like the Yen and swiss franc.

With the only event holding the euro above 1.1000 now removed, I fully expect Euro to be at parity in the next few months. That’s a 1000 pip move.

We have huge economic divergences between the Eurozone and US. Plus the Greece issue has not been fixed and will most certainly resurface in the time which will naturally be priced into the market.

So there we have it finally a Greek resolution, hardly, but at least a rest bite for a while, before it resurfaces further down the line.

On a more positive note, I hope you managed to catch our Trade of the Day video demonstrating the Major resistance and Major support levels accuracy. Please see our you tube page or trade of the day on our Platinum trading systems website.

Kindest regards

The Platinum Team