The Flying L Trader – September the 9th

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Sunday – the Chinese trade balance came in at 28.6B, a large jump up from previous of 17B and well over forecast of 20B. This will give the Aussie dollar a boost on Monday as China rebounds and is picking up steam. The Aussie should also benefit from the change in government too, and I am glad that that mess is all over now. It will take some time for the new government to fix the country so don’t expect it to be instantaneous.

Friday night’s Non-Farm Payrolls came in less than expected but saw a minor drop down to 7.3%. However, the greenback struggled against all peers so the market seems to have priced in no tapering from that figure. However, Bloomberg poll shows that The Federal Open Market Committee will slow Treasury purchases to $35 billion from $45 billion while maintaining mortgage-bond buying at $40 billion, according to the survey. That pace was unchanged from an Aug. 9-13 poll so tapering is coming.

The commodity market took a big boost at the end of last week, with copper +0.5% , oil +2% and gold +1%. This gave the Loonie and the Aussie (both commodity based currencies) good support.

This week ahead has some highlights in NZ monetary policy and Australian jobs. However, with FOMC the following week I suspect this week will be a great trading week as markets will be largely left to their own design of price discovery.

I am bullish stocks, bullish commodities, bullish Aussie and Cable. The greenback will be hard to pick this week and next but generally I do see it strong too. This is all based on the sentiment of the global economy as the figures continue to show strong growth from Japan to China, Germany to UK and across to the US.

DATA HIGHLIGHTS MONDAY – AU Job Ads. Chinese CPI. Canadian Building Permits  

AUDUSD – Got in Friday on an hourly chart and effectively traded the “change of government” trade. The day chart is an engulfing bar and I see the Aussie higher Monday towards 9270 area.
Resistance: 9300/9390/9615
Support: 9030/8925/8845

EURUSD – Bullish bar but still a LHLL and still not in an area I would like to trade it yet. Continues to struggle with the Mediterranean countries debt issues.
Resistance: 13400/13700/14260
Support: 13040/13000/12800

GBPUSD – A buyer bar but LHLL so have moved stop to protect capital in case the trend reverses with another LHLL. Don’t see this happening but must prepare for it anyway.
Resistance: 15607/15755/15910/16000
Support: 15420/15339/15260

NZDUSD – When they wake up the sure move the market. Very strong buyer bar and closed above resistance. Still though, I find it hard to see a trend in the kiwi and really just range bound b/w 80 & 77 cents.
Resistance: 8050/8100/8165
Support: 7860/7700/7625/7500

USDCAD – Oil’s rally and US$ weakness saw the Loonie race through support and close on the 50ema. I expect the commodity boom to continue to support the Loonie on Monday and look for it to tag the trend line around 10290 this week.
Resistance: 10475/10575/10615
Support: 10387/10342/10291

USDJPY – Well, there is a pullback but not sure if I want to get in. Resistance is getting stronger at 100 each time now. Another pair that is range bound.
Resistance: 100.00/100.70/101.20/102.56
Support: 9690/9580/9497

GOLD – The buyers came in in earnest but I missed the opportunity. Now that the SA miners are back digging after the strike resolution maybe we get a bit of selling to let me get in.
Resistance: 1,425/1,489/1525
Support: 1350/1300/1,266

David Long / Proprietary Trading Manager

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