The markets go some breathing space before the US send the “Red” team into Syria, or will it be the “Expendables”? All markets retraced from the exhausted edges, with oil back under $110 after getting over $112. The US stock markets managed to post a green positive figure as investors slowed down on the panic selling and cooler calmer heads prevailed in the UN.
Copper also had a down day and the range of $3.50 to $3.05 seems firmly set now, although the CRB index was up at 4mth highs. The VIX index was down a minor 1.7%. The Baltic index, the measure of global shipping of raw materials, is back on recent highs but up against resistance of 1,200.
The US posted a poor Pending home sales figure. That is the third bad number in a row from Uncle Sam. I will be keeping an eye these figures next month to see if a trend is occurring and the US is stumbling. The market took it as it was, and that they need Uncle Ben’s printing presses to continue, so there is no need for QE3ii to end just yet and the US$ took a bit of a hit as the majors jumped 30-40 pips on the news.
Carney also got busy in Ol’ Blighty in his first public speech as the head of the BOE. He has made it easier for credit to flow again by easing liquidity thresholds on the big UK banks. This was seen by the market as huge positive tick for the UK economy and the cable leapt 100pips on the news.
So, as usual Glen “6 months behind the curve” Stevens has been found wanting at the RBA and next week’s meeting should see him turn bullish on the Aussie economy. I have no doubt that he will remain on the fence though. The global economy and indicators are all bullish and stable so he should be taking the foot off our throats like Carney has done for the Pom’s.
DATA HIGHLIGHTS TODAY – AU Private CAPEX. German Unemployment change. US GDP.
AUDUSD – Yet another LH/LL and the sentiment on the Aussie continues to be bearish. Some news out today on it but I don’t expect this to change the momentum in any way. Most likely the little battler will chop about until Tuesday’s RBA meeting.
EURUSD – Another wild night with for direction and minor support at 1.33 held as did major resistance at 1.34. “Frothing” about and not holding any interest for me at the moment.
GBPUSD – Now this is an interesting chart with two large low test bars and a bounce over night off the 50ema and support level at 1.5420. This is now starting to look attractive for me as an entry opportunity. Another day of buying sentiment and I will be fully behind it.
NZDUSD – Same as the Aussie as funds continue to flow from east to west, posting a low test LH/LL but really only just chopping about.
USDCAD – 4 days of high test bars, and despite a pullback in the oil price the Loonie held its own against the greenback. I would be looking for a pullback to the 1.0420 area for an entry, but get the feeling I may not get that.
USDJPY – Still in the range and I am really quiet bored looking at this chart. I see no opportunity or even a potential one.
GOLD – A nice high test bar of resistance level and now I will be looking for shorts as the heat comes out of the Syrian conflict rhetoric. Trading it back to the support area of 1,350.
David Long/ Proprietary Trading Manager