RISK ON…again. The data from the US and UK both slipped a little sending funds scooting to safe havens but outside of the US. The Swissy, Yen and Gold all took in cash and bond yields came off. When risk is on, cash looks for safer assets which provides lower yields but also due to the weight of it forces the yields lower, as is the case in bonds. That said one month of data does not make a trend and in the case of the UK they only missed the expectations buy 0.4 points, it is still well above trend at 56.7, so I do not see this as continuing, the poms are doin’ ok. So much so that people now expect the brilliant Carney to bring the UK to the fore of growth first (via bloomberg). Even the Listerines (US – Yank – Septic Tank – Septic) are doing alright, they missed slightly on all the numbers but still showing good data. The market is just a fickle wench and in this day and age of instant information and ease of shifting funds the market reacts with a knee-jerk to any headline and people try to beat the trend and be the first into the new position, only to change opinion a day later with the next headline.
DATA HIGHLIGHTS TODAY – AU RBA STATEMENT. UK Construction PMI. US Factory Orders.
AUDUSD – A HHHL just but a test bar. Despite the government keeping its promises to cut the tape and crap from our system there is a lag in time for it to hit the economy. It will get worse before better, the currency that is, the economy is doing fine. But the RBA will try to talk it all down to force the currency lower, but in doing so will talk the economy down…muppets all. Still, from a technical view point the Aussie is not tradeable here. Resistance: 8890/9167/9300/9428 Support: 8654/8550/8300
EURUSD – Took some cash in as funds left greenbacks and pounds overnight, but nothing to get excited about, it is still a LHLL. Still not ready to trade either. Resistance: 13733/13830/14065 Support: 13488/13420/13266
GBPUSD – Tested 1.63 perfectly in a bearish bar. The next two days will be telling. If we can get two days of buying interest from here then we will be following the Carney gravy train higher. If not, well we will wait. Resistance: 16610/16785/1.69 Support: 16300/15950/15830
NZDUSD – An inside test bar and perhaps an opportunity to take this lower on the smaller timeframes. This is headed in the direction and to levels it should be at, in the mid to low 70 cents area, maybe lower. Resistance: 8475/8535/8607 Support: 8090/7925/7714
USDCAD – Profit taking from the trend has given us an opportunity with all the right signals to take this back to the 1.08 area. Resistance: 11170/11233 Support: 11035/10859/10715
USDJPY – Risk on has pushed the Yen higher, which won’t make Abe and Kuroda happy. Still, it will give us a test of the 100 parity level and 50% long term fib at 99.80. Lets see what happens when the market hits those levels. Resistance: 105.57/108.35/110.50 Support: 100.62/100/99.80
GOLD – Another up day to test the resistance. Uninspiring really. Resistance: 1265/1,307/1,350 Support: 1,225/1,180/1,040
BITCOIN (from Mt.Gox exchange) – Spent the session falling from 969 to close at 935.