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2017 Report S.S.Johal (Financial Trader) .pdf


Original filename: 2017 Report - S.S.Johal (Financial Trader).pdf
Title: 2017 Report
Author: Simrandeep Johal

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30 December 2016

Includes:

 Comprehensive Top down analytical approach spanning:
- 6 Month Timeframe
- Quarterly Timeframe
- Monthly Timeframe
- Weekly Timeframe
- Daily Timeframe



Break-down of:
- 26 Forex Pairs (USD, CHF, AUD, NZD, EUR, CAD, GBP, JPY crosses)
- Commodities (US/UK Oil, Silver, Gold)
- Equity Indices (S&P500, Nikkei, FTSE100)
- DXY & USDOLLAR Index



Global Macro View using:
- Central Bank Monetary Policy Statements

Simrandeep Singh Johal
Financial Trader

30 December 2016

Contents:
Order of Analysis:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.

DXY (-ve correlation to eurusd)
USDOLLAR (equal weighted basket)
EURUSD
USOIL
UKOIL
XAGUSD (silver)
XAUUSD (gold)
SPX500
JP225USD (Nikkei)
UKX (FTSE)
GBPAUD
GBPCAD
GBPNZD
GBPUSD
GBPCHF
EURGBP
GBPJPY
CHFJPY
USDJPY
EURJPY
AUDJPY
CADJPY
NZDJPY
USDCAD
USDCHF
AUDUSD
NZDCAD
NZDUSD

Key:
1. Key Levels: White (Monthly/Quarterly); Grey (Weekly); Blue (Daily)

Disclaimer:
All of the below analysis is my own having been done from the 30th December 2016 – 2nd January
2016, This document is not a signal service nor am I portraying that the below analysis WILL happen,
as we know anything can happen in the markets at any time, and this analysis could be wiped of the
table in 1 month, however the below analysis is based on a technical and fundamental analysis top
down approach used by many and thus I have confidence in the below analysis, enjoy.

Simrandeep Singh Johal
Financial Trader

30 December 2016

DXY
Quarterly Chart:

1. The 3m chart above shows that price had been capped and stalled under the 100 level for 7
candles (just under 24 months), this was then broken in the final quarter of 2016, eyes were
solidly on this level over the entire 2-year cycle (that had been caused due to the electoral
cycle within America which often causes indecision and ‘risk’ within the given currency of
which ever economy is going through an election.
2. Q4 of 2016 finished as a large bullish engulfing candle equal to that of the Q1 candle of 2015
which was part of the dollar bull run that spanned 2013/14/15
3. Price having broken the 100 psychological level is a huge catalyst that shows the electoral
risk is over and the market took trump as a bullish outcome
4. Fully bullish on the $ until we see movements breaking down back below 100 and retesting,
even then would need to see even more movement to become ‘bearish’, will be looking to
buy dollar pairs on pretty much all pullbacks

Simrandeep Singh Johal
Financial Trader

30 December 2016

Monthly Chart:

1. The monthly chart shows the 100 level stronger and shows the floor of the $ at 93.
2. Price is firmly above both the 200 ema & the 50 ema
3. Large amount of buying as we broke above 100 if we measure the 2014 bull run and
replicate it from the 93 floor we can see our primary first long term target to be $112,
however this does not mean it cannot go much further as my further targets will be the
2001 double top of $120
4. As stated to become bearish we would need to see significant bearish price action forming,
until then all pullbacks are value for buying not confluence to sell, all bearish shorts need to
be very small term opportunities.
5. As you can see if we apply the fib tool over the 2014 bull run we can see the range play
acted as a 382 retracement and D2 sits roughly at the target of $112 (how fib works so
obviously)

Simrandeep Singh Johal
Financial Trader

30 December 2016

Weekly Chart:

1. Here we can see the 100 level acting as very strong resistance being where the double top
formed to give the 3-6m pullback to the 382
2. Have to ask yourself even after such a big reversal topping pattern took place (double top),
while the election was taking place and price still couldn’t break 93, shows just how much of
a king the dollar really is, if price couldn’t get bearish in the above scenario where it had the
most risk how can it now. (obviously anything can happen and biases and sentiment can
change but even then we should see it coming ahead of time)
3. Price will clearly not move up in one straight line all the way to 112, market mechanics
dictate a wave motion, price is currently stalling forming a doji and bearish candle on the
103 level which was the next clear resistance above 100, could definitely see a pullback to
daily support of 101.5 can’t see a full pullback to 100 again, some serious bearish $ data
would need to come out for that to happen
4. DXY pullbacks will simply act as the pullbacks in dollar denominated pairs & allow the yens
to rebalance giving value to those entire with the trend to scale in and build a position,
therefore use this to your advantage.

Simrandeep Singh Johal
Financial Trader

30 December 2016

Daily Chart:

1. As explained above price will have to trend up, that’s the market mechanics, each higher low
will most likely coincide with 50 ema support, 382-61.8 Fibonacci retracements, trendline
support & key line support
2. Pullback to 101.5 for next leg is shown clearer above
3. Bull market baby.

USDOLLAR:
1M:

1. USDOLLAR chart allows us to see a more weighted pair less correlated to the euro, here we
can see price has broken the ceiling of 12300 as the DXY broke 100, price has been in a
trending market structure since its start in 2011.
2. Simply acts as another way to gauge dollar’s strength/weakness.

Simrandeep Singh Johal
Financial Trader

30 December 2016

1W:

1. Here we can see price had broken and retest 12300 before continuing on its bull move
2. The current bull run has been exhaustive however we can’t start calling ‘the big short’ as
trading counter with no evidence is suicide.
3. The same as with the DXY price should move in trends with every HL being seen as value for
longs due to the GM outlook.

1D:

1. As can be seen price has stalled at 12600 and started to decelerate, this could be the start of
a pullback to one of the fib levels where the 50 ema along with trend line will provide
support for the next leg upwards, as explained with the DXY.
2. Due to not being so high previously will use the DXY as the frame for analysing the
USDOLLAR.

Simrandeep Singh Johal
Financial Trader

30 December 2016

US Dollar Global Macro view:
1. Given the fact the market has taken trump as bullish where equities are at all-time highs
(further explained later), the fact that we didn’t break the 93 level despite all of the
uncertainty & the fact that the worst presidential situation which was trump was actually
taken bullish what else can cause the Dollar to weaken now?
2. Fed have made the first move hiking before the end of 2017 giving rise to the pricing in that
happened straight after the bull run (trump)
3. Fed have outlined a further 3 hikes in the coming months and now any positive data will be
seen as increase evidence to support these actions
4. Fed have outlined that monetary policy is yet still very ‘accommodative’ meaning further
hikes are called for, being the only Central Bank that has hiked or is hawkish (apart from
neutral to hawkish type BOE) pairing USD up against Dovish CB’s (central banks) to lead to a
large policy divergence will lead to a bigger yield pairing a strong currency & weak currency
(strong/weak based upon stance of the underlying CB of each)
5. Philly FED up for 5th consecutive month
6. ISM @ 53.2 up for the 3rd month (11/18 sectors up)
7. “In view of realized and expected labour market conditions and inflation, the Committee
decided to raise the target range for the federal funds rate to 1/2 to 3/4
percent (+0.25%/25bps). The stance of monetary policy remains accommodative”

EUR/USD:
6M:

1. As we can see price has formed a bullish channel since it was first created in 1972, forming 3
bull markets and 3 bear markets over the past 44 years.
2. Here we can see price stalled for 2 years (in 4th quarter broke below) at the floor of 1.05, this
was also the 32-year trend line, after a bear run from around 1.4, price has officially closed
below this trendline for the first time ever.
3. The weight this break holds is immense as many funds will be looking at the longer term
charts to position their portfolios to return over a 10-year period.
Simrandeep Singh Johal
Financial Trader


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