A bit of fun overnight finally, well in comparison to the rest of this month so far. Commodities bounced as did bond yields, stocks mixed but had some great moves in FX from the headlines.
Firstly here we had inflation gain some ground which should start to see “six-months-behind-the-curve-Stevens” change his stance of accommodative interest rates to perhaps we should raise them. Nothing to get to excited about but watch this trend. No change up in Japan, still printing hard to try and get out of 20 years of deflation.
Across in old Blighty, the jobs data showed continued strength, dropping 0.1% point each month. Also the minutes should that they will not raise rates soon, the fact that they are talking about it though suggests they are happy with the improved conditions but do wish for a blue sky every now and then to make the population a happier place, if only they can drag the country down a few degrees to warmer climes. They have a target of 7% unemployment before they even consider rates but with it now at 7.1% the market got bullish pounds.
In Canada they are worried about weak inflation and strong currency, as are all Central Banks now, so that is nothing new. I read it as a neutral position, however market took it as “about as dovish as it could be without explicitly saying it was likely to cut rates. They said remarks in its Monetary Policy Report on how the Canadian dollar was still strong, and that its strength still posed an obstacle to exports, was a green light for Canadian dollar bears”.
Finally the US bought into the dips and greenback rallied most against Loonie, Euro and Yen as they wait for expected strong jobless claims and home sales tonight.
So all in all a good night of activity and a precursor to better things to come, perhaps now the market will start to come alive. The tennis certainly has and here is hoping for a Wawrinka win tonight. I would like to see a Bouchard v Cibulkova final for the ladies and Wawrinka v Federer for Sunday’s mens final.
DATA HIGHLIGHTS TODAY – Flash Manufacturing PMI’s from China and Europe. UK CBI Sales. Canadian Retail Sales. US Home Sales.
AUDUSD – A buyer bar of HHHL’s but failed to get through 8890/89 cent resistance level. Greenback strength through until the FOMC next Thursday should see the Aussie lower or sideways until then. No setups for getting short though in the day chart so look for opportunities in the lower time frames. Resistance: 8890/9167/9300/9428 Support: 8720/8550/8300
EURUSD – A HHHL seller bar and this again would require lower time frame trade hunting to get short but getting short I do want to be, against the $ or Pound. Resistance: 13733/13830/14065 Support: 13488/13420/13266
GBPUSD – Took the trade yesterday in front of the news which carries risk but paid off. A strong HHHL bar indicates strength is here and should stay. Resistance at 1.70 but that is some way away yet. Resistance: 16610/16785/1.69 Support: 16300/15950/15830
NZDUSD – The long white cloud has gone to sleep, although the poor country has some plates underneath it that isn’t so quiet. Resistance: 8475/8535/8607 Support: 8190/8131/8100
USDCAD – The Loonie has gone lunatic and shows no signs of stopping. Very much over-cooked but try trading against it at your own peril, wait for the market to show us it is turning. Resistance: 10985/11060/11290 Support: 10560/10420/10195
USDJPY – A buyer bar but LLLH this time…tracking sideways aimlessly. Resistance: 105.57/108.35/110.50 Support: 103.34/101.65/100.00
GOLD – A swing high off the resistance is very tempting to short it. Resistance: 1265/1,307/1,350 Support: 1,225/1,180/1,040
BITCOIN (from Mt.Gox exchange) – 2 days of selling has pushed it back down to 940 and looks like it could go under 900 this week.