Was a mixed bag in the commodity arena but gold bounced again (the cat still lives) on the back of Moody’s (The number 2 ratings agency) threatening to downgrade the US. There was bargain hunters also in the currency markets as a result of the US dollar shift down on the news. Whilst we had a stella session in stocks in Asia, the Europeans were flat on holidays and US also flat from a lot of rhetoric on QE. Everyone is afraid of being the one to sell the US but its time of record highs is drawing to a close.
Ahead this week we have RBA minutes today, BOJ meet tomorrow and Uncle Ben testifies (no he is not indicted, it’s his job to tell the Senate the state of the economy so all eyes and ears will be on him on midnight Wednesday Sydney time).
DATA HIGHLIGHTS AHEAD (times are in AEDST) – 1130am RBA Minutes. 630pm UK CPI.
AUDUSD –An inside bar so not quite encouraging for Aussie bulls but a start at least. A break above 9850 will see us retest parity.
EURUSD – A reversal bar! Being a HH/HL bar rather than LH/LL this indicates a shift in sentiment from bearish (Lower Highs/Lower Lows)to bullish (Higher Highs/Higher Lows). It also held above the horizontal level of 1.2880. Look for it to meet the 50ema in the high 1.29’s. Then we might get bearish again, perhaps. Hard to tell the longer term sentiment on Euro at the moment.
GBPUSD – Another inside bar, not enough strength yet to make HH’s and therefore is tracking sideways.
NZDUSD –Now that is a bullish bar, a HH/HL and a close 6pips or 5% off its high of the range. Sitting right on resistance but expect the retracement to 83 area to follow through.
USDCAD –A slight pullback but inside bar. If US dollar continues to fall then back to 1.01 we go.
USDJPY – Got turned right around but the long term horizontal of 101.7 is a hard floor for the moment.
GOLD – I was saying yesterday (got distracted and didn’t finish) that when trading on leveraged products margin call are a major hindrance to your trade. When you own something outright you don’t get margin called. When are you are called your options are to top the account up with your hard earned or reduce/close your position – which in turn can add to the selling pressure against your position. Anyway, a moot point today with gold posting a $61 jump from its lows, just as capitulation was upon the bulls.