Equities still rallying from the influx off Ben’s printing machines and VIX is back under 14. The commodity index is also rallying and is close to breaking a recent structure high. Meanwhile the US$ has rolled over again after finding 84 too tough a hurdle to surmount. Since the peak on April 4th at 83.66 it has been posting lower highs and lower lows. 81 is support and it closed this morning at 82 even.
DATA HIGHLIGHTS AHEAD (times are in AEDST) – 1130am AU unemployment. 1130am Chinese CPI. 630pm UK Manufacturing. 9pm UK Interest Rates and statement. .
AUDUSD –With the USD failing overnight the little battler posted much of a nothing day. Today we have our unemployment data out which could provide some volatility. I expect the Aussie to test resistance levels before continuing south. We are in a strong range (1.0180 – 1.0580) since July but I have a sense we are close to breaking out of this.
EURUSD – Busted the Joey Law NR4, and to the expected upside. With bank holiday in Europe I don’t expect this to test resistance but it should hold above 1.31 and stay in the tight range its been in since early April.
GBPUSD – Since it bottomed in March the cable has been leg up, sideways, leg up, sideways. Three stepping stones. This style of trend makes it difficult to get in using my 4 bar entry. Would have to employ a different rules of entry, a consolidation break out style strategy. Not a strategy I overly like as it means my risk in pips is large. Will be patient or trade on smaller timeframes but am still bullish the Cable up to 1.60 and beyond.
NZDUSD –The kiwi’s just posted a decent jobs data, giving the dollar a boost. With a double bottom and test of the 61.8% fib at 8360 one could argue we are heading higher. However I don’t like the structure and cycle throughout April and May, having had two cycles and the 2nd one a lower high. So I don’t expect this to rally beyond 8533.
USDCAD – Sliding towards parity the Loonie is starting to show signs of exhaustion in selling with RSI becoming shallower. I’d be looking for buyers coming in soon.
USDJPY – The yen has gone to sleep! I suppose running TWO THOUSAND TWO HUNDRED pips in 30 weeks is a challenge to continue. A well deserved breather is ok I guess.
GOLD – A bit like the yen in having a breather, tracking aimlessly between hard resistance and minor support at 1440.
David Long/ Proprietary Trading Manager
Knowledge to Action – Specialist Forex Education