Forex Market News
Yield chase was the order of the night last night. With funds flowing out of stocks as peak is seen ahead of US earnings season. This would normally see safe haven flows that wasn’t the case last night. The Yen took some flow but the biggest chase was for higher yielding assets than Yen and gold provide. Even US bonds were ignored. Emerging market currencies, or currencies with high yields (Kiwi) benefited from most of the flow.
Tonight we get the minutes from the FOMC immediately followed by Draghi speaking.
DATA HIGHLIGHTS TODAY – Chinese CPI. FOMC. Draghi.
AUDUSD – The buy signal proved correct and it is still running as I write.
EURUSD – Now we need to protect profit and get stops tight above the reversal bar of HHHL’s.
GBPUSD – Triggered into this short yesterday, being against the trend it could get tricky with the hunt for yield pushing the greenback lower.
NZDUSD – Strong buyer HHHL bar sees the kiwi higher. The balance is on. With the currency this high it will curtail the profit of their export market, which is the dairy industry and the majority of the NZ’s GDP. Will rates hold high for long? Doubt it, Wheeler moved to fast too soon.
USDCAD – Similar to the cable, we are now in the Loonie against the trend, looking ok at this point but could get tricky.
USDJPY – Coming back to support and bottom of range. Will be interesting to see what happens in next few sessions.
David Long/ Proprietary Trading Manager