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US Dollar Index tightly wound between: US Bond Yields down on safety flows

Stock-Markets / Financial Markets 2019 Jul 23, 2019 - 02:05 PM GMT



As markets begin a new week, there are interesting opportunities. SPX ended the week in a state of uncertainty. Weekend news from Iran seem to suggest there is no truce visible as Iran has not yet let go of the Oil tanker captured. It was flying a UK flag. US has not fully involved itself in the spate and thus market are waiting on a US response. However bond market seem to have made up its mind that they will not wait for a strike but rather exercise caution before its too late.

USDJPY has opened the week above 108. Above 108.4 the pair may look to extend gains to 109.2. The lack of impetus suggest we will fall to 105 on USDJPY.

CME Data can be studied here: CME for JPY, EUR, GBP Latest trade on EUR, GBP, JPY

Dollar charts

Dollar weekly charts are tightly wound between 97 and 97.5. THe QUANTO live trade copier does not depend on direction as it is mainly market neutral and hence can trade in all market conditions.

On the 4 hr charts, there seem to be a reluctance to move higher. Bulls are not yet very keen. The Long shadow seen shows an attempt higher was met with selling

SPX Charts

SPX ENDED BADLY ON FRIDAY GIVEN IRAN US SPAT. We could fall dramatically if there is a escalation. The SPX has hit its 3000 mark and now 25 handles belows which would confirm that it is a fake breakout. So the odds are stacked against it. The bulls need to confirm the breakout. The uptrend line has been broken and hence I expect a downward move to 2960. If SPX falls under 2950, it could be carnage and it could fall very quickly.

Junk : Not keeping pace

JNK (high yield ETF is far below 2017 highs even with SPX above 3000. This is a worrying sign as flows seem to be moving into lower yield stocks.

Small cap

The 10-day EMA of AD Percent triggered bullish in early January and this signal has yet to be reversed (bullish breadth thrust). High-Low Percent triggered bearish in October and this signal has yet to be reversed because new highs are lagging (not many strong uptrends). The %Above 200-day EMA turned bullish in mid February, but flipped back to bearish in mid March (not enough uptrends). Thus, two of the three indicators remain on active bearish signals.

Russell 2000

Russell 2000 is inside the ascending triangle. Whichever way they break, it could move more than 10%. We prefer the long bias here but anything can happen.

US Spread with Japanese bonds

The spread between US and Japanese yields continue to be sluggish at the lows. Flows are still chasing safety and this bodes bad for risk.

Canadian 10y spread with US 10Y

Canadian yields have started fall with respect to US counter parts. We will be watching for a USDCAD base pattern as we look to see for signs of USDCAD uptrend to commence.

Australian 10 y spreads to US 10Y

Australian yield have contracted to US yields and have primarily been the cause of AUDUSD downtrend not showing much signs of a bounce. Traders are still of positive The contraction paused which has allowed AUDUSD to stabilise at 0.7000

AUDUSD charts

AUDUSD will fall back to 6900 to find further buyers if at all. A failure of 6900 will lead it down it further,. Weak RSI levels might trigger the Aussie pair’s pullback from short-term important support-line. 50% of Fibonacci retracement offers additional support during the pair’s further declines. Even if immediate descending trend-line and trading below 23.6% Fibonacci retracement portray the AUD/USD pair’s weakness, it still needs to slip beneath key support as it makes the rounds to 0.7040 during early Monday. Gradually declining levels of 14-bar relative strength index (RSI) might trigger the pair’s U-turn from 8-day old trend-line support, at 0.7035, failing to which can drag the quote to 200-hour moving average (HMA) level of 0.7010. In a case where prices fail to respect 0.7010 mark, 50% Fibonacci retracement of an up-move since July 10, at 0.6995, could be on the bears’ radar. On the upside, 0.7050/55 comprising adjacent resistance-line can keep the buyers away whereas 0.7065 and 0.7085 could follow the breakout of near-term key resistances.

EURUSD charts

21-DMA limits near-term EUR/USD upside, highlights 4-week old support-line for sellers. Steady RSI and sustained trading below 23.6% Fibonacci retracement favor declines. In addition to remaining below the 21-day moving average (21-DMA), the EUR/USD pair’s decline below 23.6% Fibonacci retracement of January – May south-run also portrays the quote’s weakness as it makes the rounds to 1.1216 on early Monday. However, a daily closing below an ascending trend-line since June 18, at 1.1203, becomes necessary for the pair to lure the sellers. Should the 14-day relative strength index (RSI) also support the downside, current month low surrounding 1.1193 and June month bottom close to 1.1181 seem to be on bears’ radar ahead of watching over 1.1130 and 1.1100 key supports. On the contrary, 1.1240 can entertain short-term buyers while 21-DMA figure of 1.1270 and the 1.1300 round-figure may question further upside.

Trade copier QUANTO system trade copier performance is summed up here.

The system has made +19% in July alone. Earlier performance are also summed. May has made +22%, June +10% and July currently is +19%.

Weekly Performance Rising and per weekly making nearly +5%. Last week it made 0ver 10%.

Monthly Performance

The monthly performance is stable and rising. The above shows the monthly performance for last 3 months. Before that the historical can be found here: Historical

Equity Returns Returns cross +60% in a short period of time. We generally tell clients, that the system will make abovut 10% a month but currently the system is far exceeding the performance expectations of it.


The system is currently running with a profit factor of 2x and a sharpe ratio of 0.18 which is brilliant for a forex system. In stock system you have the luxury of holding stocks till you make returns and hence once can achieve 0.2 sharpe ratio fairly easily. But in forex, where one has to close trades and cannot hold for long, a sharpe ratio above 0.1 is considered excellent. However QUANTO sharpe ratio is 0.18 which is outstandingly brilliant. You will be hard pressed to find system that has such numbers. That is what sets this system apart.

The system is free to trial so get started at the earliest. You can simply email us at contact us

We run a buzy twitter news feed so you can start following it here: Twitter

QUANTO is a trading system which combined Market Profile Theory and Kletner channels. It is hugely profitable. There was a trader back in If you would like to start right away, please contact us.  Our email:

By Quanto is a Investment Management firm with active Trading for clients including Forex, Crypto. We send our trades via trade copiers which are copied to clients trading terminals. Top notch fundamental analysis and trading analysis help our clients to generate superior returns. Reach out to us:

© 2019 Copyright Quanto - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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