A slightly weaker US GDP and home sales kept the lid on any bounce in the stock market overnight. A flat night there and in commodities it was bullish in energy and metals, mixed in agriculture, whilst bond yields continued to rise. This page will show you the global 10yr bond yield with the rises in 1day, 1 month and 1 year. Notice the rises in a month, and compare that to the year. Big moves recently. http://www.bloomberg.com/markets/rates-bonds/
Will be a relative quiet end to the week, with no major data due for release. The weekend will have Chinese Manufacturing PMI and Uncle Ben talking early Monday morning, so be aware of a potential gap on the Aussie and/or USA currencies. As I have said I am away next week so watch out for RBA Tuesday arvo, unlikely to move rates but watch this page Monday night. http://www.asx.com.au/sfe/targetratetracker.htm
Next week will also have raft strong data out but mainly on Thursday night is the UK and EURO interest rates announcements, be aware of that. They unlikely to lower rates, it will be the Asset Purchase Facility or QE style packages that will affect the market. The BOE have the new governor and he may stimulate with APF and Draghi could well finally do something to help Merkel win an election by stimulating the Eurozone instead of hanging his hat on the austerity peg.
Friday night is the US jobs data, Non-Farm Payrolls. This will be key for the US QE as Uncle Ben has repeatedly said he will continue to print (don’t listen to the media who say QE on, QE off every time the markets move, utter rubbish. Ben has been clear on this point) cash until unemployment gets back to 6.5%, currently at 7.5%. Any increase in employed Yankees will kick the market higher and US$ down.
Have a great week and trade responsibly with accountability.
DATA HIGHLIGHTS AHEAD (times are in AEDST) – 1030am CAD GDP
AUDUSD –We have a swing low of support level! Yes there is data out this weekend and Bernanke so I will be risking a smaller amount on this trade. Entry will be at 0.9701. Stop loss at 0.9521. Target 0.9951. Being against the predominant trend we must be vigilant on any sign of re-entry of sellers. Any high test bar or LOWER HIGH/LOWER LOW bar is that sign. So trail stops behind them immediately. This is general advice only ok guys.
EURUSD – Put in a strong performance and broke through resistance with ease, closing above them all and the ema’s too. I hesitate to call which way now, far too messy to call. Too choppy I’m going home…
GBPUSD –Completed the cycle back to the 50ema. Having broken above 1.52, and the US dollar weakness visible in the other major’s I wouldn’t be surprised if the cable crosses back over it. I am looking for sellers though.
NZDUSD –Nice retest of 80cents closed above 8050. Still messy but like the Aussie should rotate up from here to 82 area.
USDCAD –Good selling, getting closer to the buy zone of the 50ema.
USDJPY – Also had good selling with a lower high and lower low, waiting to see the buyers step in around ¥100.
David Long/ Proprietary Trading Manager
Knowledge to Action – Specialist Forex Education