The Flying L Trader, July the 25th

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An interesting session. We had Aussie CPI come in pretty much on the money but weak enough to have people continue to talk of lowering rates. The smarter ones disagree (ie Pascoe). 15 minutes later as we were still digesting that news, China posted a terrible PMI, way below expectations. Not good for the Aussie. However, then things picked up with the Frogs posting a better PMI then expected followed by the good ol’ German powerhouse skipped back into growth and pulled the whole of Euro along with it. Fabulous stuff.

Not to be outdone, Uncle Sam also got in on the act with home sales on the rise. Are we seeing the cash and power shift back out of the Asian region with China stumbling and US powering again? This article from the WSJ and picture below show a clear trend, mind you this is from the Wall Street Journal, a respected source but can’t say not biased could we?

Other markets saw stocks gain in Europe, but as the session drew to an end in NY, they began to fall. Metal and oils also came off as the US$ again drew some interest. The UK GDP should be interesting tonight otherwise it will be steady as she goes for the rest of this week.

DATA HIGHLIGHTS AHEAD (times are in AEST) – 6pm German Biz Climate. 630pm UK GDP. 1030pm US Durable Goods.

AUDUSD –We couldn’t get there. Tested the June lows and 50% fib (13th Jun – 12th Jul) retracement then screamed lower to my fib. An engulfing bar (HH/LL) and not a bar I would trade from. As I have said, I want to get short and will look at shorter timeframes now to do so.
Resistance: 9390/9435/9590
Support: 9138/8985/8760

EURUSD – Despite the great data, the sellers came in and pushed us back under 1.32. Still, it is a HH/HL so will wait until the sellers confirm with a LHLL.
Resistance: 13200/13400/13700
Support: 13040/13000/12750

GBPUSD – A LHLL so have moved the conservative stop up to 1.5250, under the support level. The support and 50ema did hold whilst 1.54 proved too much of a hurdle for the moment.
Resistance: 15370/15405/15608
Support: 15270/15080/15000

NZDUSD – Like the Aussie, an engulfing seller bar. However, since their RBNZ statement the kiwi has rallied back up to test the 50ema. Still a bit messy for me, not clean and clear so will avoid.
Resistance: 8050/8125/8170
Support: 7815/7710/7658

USDCAD – A LH/LL but US$ strength in the dying hours of the bar posed it as a buyer bar. In a bit of nowhere at the moment so not looking for a trade on this just yet.
Resistance: 10315/10420/10597
Support: 10287/10100/10000

USDJPY – Yen wins the battle for the weakest currency yesterday. Closing above resistance and parity. Again its not clean but there is now a ring low for entry above the high. I am still in it so won’t be doing that, just managing the trade. Looking for a run up to 105.50.
Resistance: 102.53/104.10/105.60
Support: 9872/9497/9415

GOLD –   Also an engulfing bar, and the sign sellers are back, but more that it is a stronger dollar. Will wait with interest for things to develop here.
Resistance: 1354/1,425/1,489/
Support: 1307/1,226/1,160

David Long/ Proprietary Trading Manager

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