No surprises from the US data with retail sales on the money and confidence down. Well you’d expect confidence to be down when your government shuts down for 2 weeks because it can’t get its **** together. The US stock market posted a healthy three quarter percentage gain. Surprisingly VIX is under 14, so not many people are insured against a fall in the markets and that is scary as the S&P continues to make record HH’s. Although the smart money, Blackrock – the world’s largest money manager, are aware of the pending cliff and overnight warned of it. Other markets saw gold off a bit, copper up a bit and bonds up 2 ticks so in reality another quiet session apart from stocks.
So tonight will be the extra quiet session but at 5am tomorrow morning in Sydney Uncle Ben will take centre stage with the FOMC statement from their 2 day meet. The expectation is no change and doubtful that Ben will do anything to scare the market. The volatility seen in May then June then again in July when he was confusing the markets would preferably be avoided. 2 hours after this Wheeler gets his turn in New Zealand.
I will not, and I would advise against it for you too, not to take any new exposure to the greenback today or tonight and be well covered in current exposure.
DATA HIGHLIGHTS TODAY – US CPI & FOMC (5am tom). (7am tom) NZ Interest rates and statement.
AUDUSD – A very bearish bar and we are now getting close to the buying zone of mid 94’s. Staying out till tomorrow morning but the 61.8% fib is only 20 pips away at 9460. I do expect to see some buying coming back into the Aussie in near future and for it to test parity in mid-term future.
EURUSD – The bearish bar we were looking for but no divergence in the Eurodollar prevented the entry. Not going to trade this as am not convinced of its intentions despite this bar.
GBPUSD – Took the trade and will close it before FOMC, the setup was too tempting but 70 pips in I am already looking for an exit and the test of round number 1.60 could be reason enough for me. On the chart we have a LHLL seller bar and stay well out now until tomorrow.
NZDUSD – A lovely tag of the 50ema and the start of a swing low. Give it a HHHL in today’s bar and this could be a great entry tomorrow morning after all the central banks noise.
USDCAD – Missed the entry again. Damn my eyelids for closing! A lovely test of 1.0420 too, and now as poked its head above extension and into the sell zone. Still, could be another 100pips in this yet. But again, will leave it alone for now.
USDJPY – Came back to kiss the 50ema………….
GOLD – A ring high on the daily that gives the 4hr a pull back that might allow me an entry. Have to think long and hard about that one.
David Long / Proprietary Trading Manager