The Flying L Trader – November the 1st

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The 3 central banks (US Fed, RBNZ, BOJ) all remained still, too afraid to upset the applecart. Uncle Ben removed one sentence from his previous statement and still holds that he wants to taper but only when he (or now Yellen) feels the data will support such a move. Wheeler obviously couldn’t do a thing and Kuroda kept his foot on the pedal with eyes squeezed shut in the desperate hope that it will pull them out of stagnation.

The Japanese have been done the QE road before and they are still in stagnation some 20 years later. Surely this is the definition of insanity? Doing the same thing over again in the vain hope it will be different this time? This time the difference is the amount of cash being pumped that is all. All that means is that it is more money borrowed from the future. Uncle Ben and his cronies are plain stupid to think they can make it work for them. None of the money is going where it needs to; into creating infrastructure that creates jobs and wealth. Not into Wall Street which is where the funds are going, there and the housing market keeping mortgages low, thereby re-creating a housing bubble like the one that set off the 2008 subprime crisis. So keep an eye on the data, although the next few weeks I wouldn’t trust completely since the US government wasn’t at work to collect and collate.  Still, watch for bubbles and stumbles.

Overnight the markets came off the boil slightly as they viewed the FOMC as tapering before March 2014, copper and gold also fell as US$ gained. I do not see this trend continuing, just the natural cycling of the markets.

DATA HIGHLIGHTS TODAY – AU CPI. Chinese Manufacturing PMI. UK Manufacturing PMI. US Manufacturing PMI

AUDUSD – A very bearish bar but also a HHHL and so we sit on the fence for this one at the moment, waiting for the signal to get in.
Resistance: 9790/9905/10000
Support: 9390/9300/9277

EURUSD – Intention is clear now! Large bear bar and heading to 50ema and 50 fib at 13523 & 13488 respectively.
Resistance: 13801/13832/14060
Support: 13556/13488/13404

GBPUSD – An inside doji bar and holds up very well in comparison to other majors. Funds being held or flowing into the cable bodes well for testing the 1.63 level soon.
Resistance: 16300/16390/16620
Support: 15890/15755/15610

NZDUSD – Doji HHHL is ok and will look for this to rotate higher from here.
Resistance: 8535/8607/8676
Support: 8229/8131/8100

USDCAD – The loonie gained some strength from its GDP numbers and retested the support level. Expect it to faff about today around the low 1.04’s.
Resistance: 10555/10673/10830
Support: 10420/10195/10100/10000

USDJPY – mmmmmmmmmmmmm
Resistance: 100.00/100.70/101.20
Support: 9690/9580/9497

GOLD – Resistance proved too much this time around, pity, I had one trade and was looking for another on it. Not yet it seems.
Resistance: 1350/1,425/1,489/1525
Support: 1,266/1225/1180

David Long / Proprietary Trading Manager

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