Go Stanilus and go the Europeans!
Overnight the US failed to impress with jobless claims and home sales, nor did the Canadians with retail sales, however, the Europeans showed some mettle with great manufacturing PMI’s lead by the ever reliable Germans. This wasn’t enough to stop the rot in the stock markets though, which began in Asia after a poor PMI from China sent funds heading to safe havens in bonds, gold and the assets denominated in currencies of Switzerland and Japan. Stocks down 1% or more, gold up 2%, oil up 0.6%, bonds up 2.7% and disappointingly for Australia copper down 1.7%. The Swiss and Yen benefited from the funds flow but the Euro and Pound also took in some cash from the PMI figures and poor showing from other continents of Asia and America. Interestingly again is that VIX still hasn’t moved over the 14 level so markets are not yet seeing this as run south, merely a minor correction.
For the weekend there is little data so all eyes will be on Rod Laver Arena in Melbourne. The little pocket rocket Ciblukova got home to the final and will play Li in Saturday night’s final, I love the underdog story (don’t all Aussies??) and will be barracking for the pocket rocket. Whilst tonight the underdog is Federer, a strange place for him to be, but if he gets up over Nadal it will be an all Swiss final Sunday night, against my big fella Wawrinka. Wawrinka is playing brilliant tennis and I love to watch he’s backhand in full glory and Federer’s is not too shabby to watch either! I do so hope the fairy tale comes true for Stanilus.
DATA HIGHLIGHTS TODAY – Canadian CPI.
AUDUSD – As thought, the Aussie is too weak and dollar too strong so we have a seller bar and LHLL. This trend should continue south as there is no news or indication to say otherwise.
EURUSD – Thanks to the Germans the Eurodollar is starting to become attractive. I am not convinced yet. A large bullish bar is nice to see but hard to trade from. I will stay away until I see a complete cycle above the 50ema.
GBPUSD – Another good day of buying and stops are at least breakeven now or better. Now it comes to trade management, knowing when to get out, which is always the hardest and trickiest part of trading.
NZDUSD – A doji bar off the 50ema epitomises the lack of interest in this currency, although it should be trading in the mid to low 70 cent area no-one wants to sell it yet.
USDCAD – A lovely looking high test bar as crude rallied and the market sees this move as overdone. Another day of selling and LHLL in today’s bar would see a potential trade south on Monday.
USDJPY – As mentioned, safe haven funds bought the yen and so we have another touch of the 50ema in a large bearish engulfing bar. Not one to trade from but get ready to buy the dips if and when we get a signal.
GOLD – Just as Adam was so was I, and like him I paid for the temptation. Now we have a large 34 dollar range bullish engulfing bar which also tested resistance….lick my wounds and watch this now.
BITCOIN (from Mt.Gox exchange) – Sideways action in tight range of 935 to 958.