The Flying L Trader – November the 6th

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Who backed a winner? Who had the unfortunate horse that was put down? Over in currency land the RBA is starting to back a winner but still complaining the dollar is too high. Broken record Glenn, time to change track buddy, in fact I’d accept your resignation with relish. There was little surprise in the statement from Glenn but the Aussie slipped 30pips or so. Nothing to worry about, we will be above 98 before Xmass.

Offshore, Kuroda reckons deflation is abating in Japan and the ¥ strengthened off the news despite little data showing it actually is. British services jumped to its highest reading in 16 years which also saw the Cable run 90pips on the news. Draghi thinks the Euro is slightly improved but still at risk whilst most pundits think no change in rates. Over in the USofA the Fed is at odds with itself with some Fed officials saying there is underlying strength in the economy and others (actual voters on the Federal Open Market Committee) say the will remain HIGHLY ACCOMODATIVE for some time, backing further easing until FULL EMPLOYMENT IS ACHIEVED.

Now isn’t that nice, setting Aunty Janet (Yellen) up to print more than Uncle Ben even conceived of. But I guess Greenspan never thought Ben would go this far either. How ridiculous though, to want to print until full employment. That by my reckoning is 4%ish. That is two, maybe three years away for the US economy. The debt ceiling will have to almost double to fit that kind of spending in. Madness.

DATA HIGHLIGHTS TODAY – AU Trade Balance. UK Manufacturing Production. Canadian Building Permits and Ivey PMI.

AUDUSD – A HHHL and low test bar and all looking good for the trade taken yesterday. swing low and bullish bar, love this setup. Still targeting mid 99¢’s.
Resistance: 9790/9905/10000
Support: 9390/9300/9277

EURUSD – An inside seller bar and not ready to take this long. With the market undecided on the ECB’s rates setting tomorrow night there could be more frothing about until after the announcement.
Resistance: 13801/13832/14060
Support: 13488/13404/13266

GBPUSD – Strong buyer bar thanks to news. Unfortunately it is so strong I am unable to get into the trade as it has now ruined my risk to reward with major resistance only 200 – 250 pips away at 16250-16300 and stop loss would be 150 odd pips. Risk:Reward of 1:1.5 or lower does not interest me. Might go down timeframes to participate in the trend though.
Resistance: 16300/16390/16620
Support: 15890/15755/15610

NZDUSD – Finally we have lift off and starting to pay dividends on the trade.
Resistance: 8535/8607/8676
Support: 8229/8131/8100

USDCAD – Oil off another 1.5% overnight sees the Loonie weaken further across all peers. A nice ring low is enticing however, momentum is also creeping higher to exhaustion areas so am suspect about the legs left in the dollarcad.
Resistance: 10555/10673/10830
Support: 10420/10195/10100/10000

USDJPY – He came, he spoke, he failed. Still doing nada.
Resistance: 100.00/100.70/101.20
Support: 9690/9580/9497

GOLD – Also still faffing about, better money made elsewhere at the moment.
Resistance: 1,350/1,425/1,489/1525
Support: 1,307/1,266/1,225/1,180

David Long/ Proprietary Trading Manager

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