With rising concern of US action in Syria, the headlines are getting louder, oil rallied 2.7% as one would expect. It broke through recent resistance and tested the $110 mark. This has, and will continue to give strength to the Loonie over in the land of the maple leaves. Gold also rallied almost 2%. Copper retested highs but failed to be unchanged at end of day taking any support for the Aussie away. With all this, and the stocks taking a battering of -1% or more, strangely enough the US$ was unchanged at the end of the day. Other safe havens seemed to be the attraction for investors, namely the Swiss and Japanese assets. Even the Euro attracted buyers again. Syria has stated they will be as aggressive in repelling any attack that is handed them so this issue is not going away quietly and will continue to shake the markets for some time yet. Just what we need uh, as if we do not have enough volatility in the markets with the flood of cheap fake money from the central banks, now the crazy gun toting idiots across the globe are joining in.
The economic data from last night was all positive from Germany and US, so at least the performance of the global economy is on track still.
DATA HIGHLIGHTS TODAY – BOE Carney speaks. US Pending Home Sales.
AUDUSD – Struggled to maintain buyers against the flow of safe haven assets (audchf and audjpy in particular) and posted a LHLL. The hourly has cycled back to the ema and turned south again. Expect this trend to continue.
EURUSD – A wild old night on the euro, and the day bar has tested both 20ema support and horizontal resistance at 1.34. It is getting squeezed into the wedge ever tighter and whilst I expect it to bust to the upside I still prefer to wait for that to happen and buy into the retest/pullback. So much selling done around here at 1.34 that the sellers will become buyers above 1.35 and it is that wave of momentum I wish to capture.
GBPUSD – Also a low test bar on some big price swings thanks to the crazy fundamentalists. A run down to tag the 200ema before retracing and closing on support. Not sure if it has cleaned out the old buyers yet but I would expect new buying to come in soon, me being one of them. I will be looking closely for entries and keep you posted.
NZDUSD – A LHLL but stuck back in the range of July mostly and I see no real entry. You would be inclined to take it from the short side if any opportunity presents itself.
USDCAD – As expected the Loonie strengthened against the greenback as price has had three days of seller domination. Look for this to trade back to its 50ema and support in the low 1.04’s.
USDJPY – Along with the Swissy (their banking system is considered a safe haven for investors in time of turmoil) Japanese bonds attract funds during these times. It won’t be protracted but could be for a week or two until we know what the action and reactions are in Syria. So funds poured into the ¥ overnight, giving it a spike in range and testing recent lows at 97. This puts it smack bang in the middle of the range that Abe wanted of 95-100 and not a position to trade from.
GOLD – Naturally found investors with the geo-political tension and ran up to test resistance of 1,425 with a high of 1,423.70. How it will go from here will be interesting. I did trade in and out on the run up capturing 30 odd dollars of the move. It could chop around here for some time, but with the headlines constantly screaming in indignation and pushing for action against the Syrian government I suggest price will push through resistance easily.
David Long/ Proprietary Trading Manager