Forex Market News
Some great data out overnight but the big story is the Russians are at it again. The Rusky’s are threatening another invasion of the Ukraine, and like Crimea earlier in the year, they again are saying it is for humanitarian reasons. This saw a run to safe havens overnight, with the Yen, Kiwi, Aussie and gold all taking inflows of investor funds READ MORE. Interestingly Oil prices are plummeting. Normally in geopolitical fights, the energy commodity rallies. There are no strong stories linking the fall too, but here are two of interest READ MORE.
Other markets saw the US stocks unchanged at time of writing, despite a -0.7% drop in Europe. Commodities are stronger, with gold/gas/gasoline/corn/cotton/wheat all up 1% or more, but copper bucked the trend and is down 1.2%. Bond yields all fell apart from Italy and Spain as the PIGS hit the headlines again with Italy falling into recession READ MORE.
There is also a growing move away from Greenback dominance as funds from China and Russia seek security and other ways to settle payments READ MORE.
Elsewhere, the Poms continue to give mixed signals READ MORE with their services PMI stronger but manufacturing PMI weaker so investors are not so bullish the sterling, I tend to disagree. I liken the Poms to the Chinese in that the numbers are still great, not as good as 4 months ago, but still better than most economies. Whilst the Canadians last night produced a stellar trade balance READ MORE, investors are leaning towards a lower Loonie READ MORE. Again, I differ and believe they are turning the corner economically. OK, it’s not as fast as some would like and it is not yet consistent but it is a developing story that I will continue to monitor and follow.
Over here in the antipodes we are struggling to change our tune from one of selling rocks to one of selling edibles READ MORE. Iron ore is set to continue its recent slide but the pickup/demand in paddock products is yet to cover the difference READ MORE. Whilst we maintain higher rates our currencies will continue to hold high, but I do not see high rates holding for too much longer. Then there is every reason to sell the Kiwi as I continue to maintain, Wheeler over did it READ MORE.
DATA HIGHLIGHTS TODAY – AU Unemployment. UK central bank BOE meets. EU central bank ECB meets. Canadian Ivey PMI.
AUDUSD – Faffing about with an engulfing buyer bar, will continue to faff for sometime.
EURUSD – A good strong Low Test Bar with divergence, a good buy signal. ECB tonight so some risks abound trading today. Still prefer to be shorting this currency but may take the little run higher until the sellers appear.
GBPUSD – No follow through thanks to the manufacturing PMI and we now have a LLLH and uncommitted bar looks to be closing in the middle of the day’s range.
NZDUSD – Want to be short, but another one with a good strong Low Test Bar and divergence. A buy signal coming up off the back of that.
USDCAD – Broke through the June highs and therefore is the first signal of a break of trend. The second and confirming signal that we are no longer in a downtrend would be for the next cycle to produce a higher low. The weekly bar now looks like a High Test Bar off resistance and the daily is a bearish bar but no reversal yet. Whilst I want to be long Loonie’s, against the greenback is too uncertain right now, so look to other crosses, such as EURCAD.
USDJPY – Thanks to Putin we are now back inside the wedge. Looking away from that though, we have a cycle (albeit an aggressive one) above the ema. Be watching this for buying opportunities if they appear in coming days.