All the headlines are spruiking the market moves to Summers pulling out of the race to be the new Fed Chairman. Personally I think this is slightly ridiculous and that there is more to it than that, but I just can’t find it or put my finger on it. Markets are not that emotionally tied to a runner in the Fed election. I am also thinking Uncle Ben might even stay another term.
Whatever the reason, the currency markets came back to fill the gap in as they invariably do. Oil and gold continued to slide but copper held up along with the stock markets.
As I said yesterday, it will be choppy conditions this week ahead of FOMC and with little data out yesterday it was pretty quiet too.
DATA HIGHLIGHTS TODAY – AU RBA Minutes. UK CPI. EU German economic sentiment. CAD Manufacturing Sales. US CPI
AUDUSD – A good high test of key resistance level and I expect the Aussie to continue to back fill the trade gap to 9240. RSI divergence suggests at least a move back to the 50ema is on the cards.
EURUSD – Also backfilling after trying to tag 1.34, missed by 15pips. Still seeing nothing worth taking here.
GBPUSD – Hasn’t quite filled the gap yet and is sitting right on fib extension 1.618 at 15890. Having closed my long trade I am looking for a short short trade but not seeing an opportunity yet.
NZDUSD – Has filled the gap in but is still overbought at these levels. Also looking for a short opportunity.
USDCAD – A lovely low test bar of support and trend line. IF today’s bar finishes strongly as a HHHL tomorrow morning there is trade there for me, albeit with small risk on board in front of FOMC.
USDJPY – Similar to the Loonie this might be a trade worth taking tomorrow if conditions are right.
GOLD – Tried to run back up but the support level was like a magnet for the yellow metal dragging it back down to reality.
David Long/ Proprietary Trading Manager