Stocks a mixed bag with the Footsie strong but Euro and US markets were flat. Commodities powered on higher (oil +2%, copper +0.6%, wheat +1.9%) as bonds fell. Aussie bonds took some cash in though as investors moved out of Japanese markets after the BOJ upped the stimulus package. The cable saw some profit taking as inflation figures came in slightly weaker. German sentiment was also weaker however the € was stronger as an alternative to recent havens of $, ¥ & £. Loonie tracked sideways a bit although a data release showed foreign investment fled the maple leafs.
Some interesting data coming out mostly tomorrow night and Friday which should set the tone for the rest of the month.
DATA HIGHLIGHTS TODAY – AU Wage index. UK Unemployment & MPC Votes. US Building permits & PPI & FOMC Minutes.
AUDUSD – An engulfing bar and looks to be balanced doji one too at this stage. Got close to the yearly high by 5pips. Looks to be forming a right side shoulder for an inverse head and shoulder reversal pattern, the neck line now being 0.9080. December was the left shoulder and much of January the head. Not yet convinced of its bullish intentions and am still waiting for that cycle above the ema, or a break and then retest of the neckline.
EURUSD – Good price action and break of year highs. A pullback to the ema would complete the cycle and setup for potential buying opportunities.
GBPUSD – A reversal bar LHLL is to be expected after such a stellar run. Still bullish the cable and whilst stops are now in the low 1.66’s I will be looking to buy these dips at every opportunity.
NZDUSD – Momentum didn’t diverge but it doesn’t have to for the market to change direction, it just has to for us to trade the change. Anyways, as expected the 84 resistance too much for the long white cloud as it grew heavy with grey and failed. Heading back to lower side of 82 or 81….again.
USDCAD – Slowly retracing the phase 2 and back to the ema. Be ready to get long again.
USDJPY – As I figured, there was, and is, more weakness to come in the yen. The Japanese government will not stop printing until they get out of stagnation. That means CPI to be in the 2-3% area (currently 1.7%) with GDP above 2% too (currently 0.3%). So much more work to be done from the BOJ and continue to look to sell the yen at any opportunity. Right now the $¥ is back at the mean but will track higher and retest resistance in the 105 area in weeks to come.
GOLD – Is all shiny and new again, so the headlines say. An engulfing, slightly buyer bar tells me that sentiment is still with the bulls for the moment. Momentum indicators are over heated though so I do expect to see the bulls rest for a bit soon.
BITCOIN (from Mt.Gox exchange) – Still showing signs of weakness at the MtGox exchange. Tried to get above 300 but failed back to 248 now.