Forex Market Analysis brought to you by David Long, Proprietary Trading Manager at Knowledge to Action
Whilst the equity markets were reasonably quiet and flat to positive at the end of the day, the currency markets had some major volatility. It makes me laugh at the online blogs and the punters reasons for it. Let me lay it to rest here, once and for all. THERE IS NO SUCH THING AS STOP HUNTING! In currency markets it’s just not possible, and seriously not worth it. Do you really think that JP Morgan, Deutsche, UBS or Goldman’s care about your little 2 standard lots, or your mini or micro?? Come on people. I have worked on those desks and we simply do not hunt or care.
So, the open of the European session so some wild swings on euro$ and cable as a raft of data came out. Then the US opened as S&P housing index came out super positive and the US dollar tanked. This was followed by a strong confidence figure and all is rosy in the land of super-size, the US economy is back!
Markets in Asia will be watching the Chinese PMI figure at 11am today, looking for a 51 or higher, anything under 50.5 will disappoint and the Aussie will struggle. After this it will be very subdued with market holiday in Europe and everyone waiting on Uncle Ben and the FOMC at 4am.
DATA HIGHLIGHTS AHEAD (times are in AEDST) – 11am Chinese Manufacturing PMI. 630pm UK Manufacturing PMI. 12am US Manufacturing PMI. 4am FOMC MEETING.
AUDUSD –Did get over the resistance with the US news but has pulled back and is sitting right on it. Looks to be rotating back to the high of the range. I have the Aussie stuck in two ranges, an outer and inner. The outer being 10185-10585 the inner 10220-10477. In the middle of this range is a 61.8% fib at 1.0369. Whilst it may “look” I am watching the USD approaching support level of 82, it closed at 82.80 this morning.
EURUSD – Rocketed through two resistance levels with ease and held above them. Great price action, whilst it will be sideways till tomorrow I expect it to hold onto these gains.
GBPUSD – Some annoying moves on the euro open and it then made higher high. Still bullish and looking for a little pullback to get in on.
NZDUSD –A nothing day yesterday but it did post a higher high so the uptrend is still in place.
USDCAD – Despite a reversal in oil and commodities overnight the Loonie continued to strengthen against the dollar. So more a sign of the weakness in the US dollar.
USDJPY – Not much in it yesterday but along with the Loonie, it is being driven by the sell-off in the US dollar and downtrend will continue.
GOLD – A $20 range and a wild bucking ride it was too, good luck trying to hang onto that seat for too long.
David Long/ Proprietary Trading Manager
Knowledge to Action – Specialist Forex Education