Cup day, RBA day. 5% chance of rate cut today, what are the odds on your horse? Good luck with that, the Cup is the hardest race to pick all year yet it is the most heavily gambled….enjoy it wherever ye may be.
Overnight numbers see stocks up slightly, with the S&P just under recent highs whilst VIX languishes under 13 now. Commodities continue the recent slide with copper off 1.3% and forming a classic wedge, chart below. Oil is still tanking and slid from Aug highs of $112/barrel to 94 today. Gold also falling and hovering above support of 1307. US long Bonds rallied 2 points whilst the short end fell a couple.
Friday saw the US manufacturing sector pickup somewhat and last night saw the UK construction do the same. In fact even the Europeans posted some decent PMI’s. I won’t be trusting the US data this month due to the government shut down last month which would make the reading of last months data suspect. Still, the economic figures coming in from around the globe are all positive. Not stupid numbers like the naughties but positive and strong numbers. Yes the numbers are provided by Bernanke, Draghi, Carney and Kuroda madly printing but lets deal with one thing at a time.
What does it all mean and where is the currency market going from here? Well, in last few sessions saw funds flow back into greenbacks as there is a sense that the FOMC will start tapering before March 2014. I doubt that is the case. They are producing good numbers but nothing near what Ben/Yellen would like. So, I think US dollar will continue to deteriorate further and will position myself for such.
A big week data wise with 3 central banks’ monetary policy statements, RBA, BOE & ECB plus a jobs data from Australia, New Zealand, Canada and the USA. Should be a fun interesting week.
DATA HIGHLIGHTS TODAY – RBA. BOJ Kuroda speaks. Swiss CPI. UK Services PMI. US Non-manufacturing PMI. NZ Unemployment.
AUDUSD – A swing low and bullish bar, love this setup. Will be taking advantage of this today. Looking for no change from Glenn and a rally of the Aussie back towards parity. Resistance: 9790/9905/10000 Support: 9390/9300/9277
EURUSD – Fabulous reversal right in the zone and closed (closing) bullishly on its 50ema. Tested long term (May 2011 high/Jul 2012 low) 50% fib and short term 50% fib. Another day of buying and tomorrow could well see me in this as well. Resistance: 13801/13832/14060 Support: 13488/13404/13266
GBPUSD – A bullish bar but not yet ready to take this one, like its cousin the Euro, I want to see another day of buying first. Must see the sentiment and momentum on my side rather than presume its coming in. Resistance: 16300/16390/16620 Support: 15890/15755/15610
NZDUSD – Two ring lows together and the kiwi is tracking sideways. Looks ok to move higher but just waiting for it to do so. Resistance: 8535/8607/8676 Support: 8229/8131/8100
USDCAD – Still faffing about the support of 1.04, due to the opposing forces of strong GDP and weak oil. Resistance: 10555/10673/10830 Support: 10420/10195/10100/10000
USDJPY – Oh dear, is this why Kuroda is talking to day, to try and generate interest in the Yen? Resistance: 100.00/100.70/101.20 Support: 9690/9580/9497
GOLD – Stuck in range 1350 to 1307 as the world works out what Ben is going to do with his $85B/month spending spree. Resistance: 1,350/1,425/1,489/1525 Support: 1,307/1,266/1,225/1,180
David Long / Proprietary Trading Manager