David Long

Aunty Janet let’s one through to the keeper

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Forex Market News

Aunty Janet let’s one through to the keeper. The US Fed did cut another $10B of the bond purchasing program known as QE3. HOWEVER, it was in the question time after the 2 day meeting that AGSP3 tripped, or did she? Asked if she sees rates rising, her response was “some considerable time” between the end of QE3 and any rate rise. Quizzed further what this meant and we get this; “around 6 months or that type of thing”. Great specific language, not quite the silver-tounged double talk of her predecessors Greenspan and Bernanke, she will improve though, maybe even have elocution lessons.

If a calculated comment to take the heat out of the stock market she succeeded, but the bond market also moved significantly, which I doubt she did want since she is still a buyer of $55B per month. Personally I think it was a throwaway comment by a bank official that the market took as gospel. She has yet to grasp the media scrutiny (including mine) on her every word and will have her minions out later this week trying to reverse the damage caused. The stock market fell and US dollar rallied. As I said yesterday the dollar should fall on the tapering, but now she has thrown a rate rise in 12 months’ time onto the table, funds flew into dollar denominated interest bearing products such as cash and bonds.

A large part of why I think it was a throwaway line was the monstering in the currency markets. All majors/minors or pairs against the greenback had large moves against them, or in the favour of the US$. Other markets, stocks down 0.7%, copper and oil both strongly higher and gold tanked.

DATA HIGHLIGHTS TODAY – Kuroda at it again. Swiss Monetary Policy. US Home sales & Philly Fed.

AUDUSD – I am thinking that the H&S pattern I have focused on is fading in relevance. Yes it got hit on AGSP3 back to the ema, but we have little cycles of HHHL’s and I think they will back track on the timeline of rate rise in 12mths thereby giving weakness to greenbacks and a chance for the Aussie to get into the mid 90’s on its own violation with no help from a chart pattern. So I am looking for buyers to be with me, if not, then unfortunately it is a waiting game until it cycle’s back under ema.
Resistance: 9085/9167/9300
Support: 8900/8654/8550/8300

EURUSD – Smacked to support and no way would I trade a bar like that.
Resistance: 14050/14260/14320
Support: 13820/13740/13488

GBPUSD – Was tracking higher, gaining on BOE comments on an expanding economy and falling unemployment. Then Janet spoke. And the party was ruined. Large engulfing bar and well under support.
Resistance: 16785/1.69/1.70
Support: 16300/15950/15830

NZDUSD –A swing high, with unfortunately no divergence in momentum, but I do see phase 2 starting here.
Resistance: 8676/8842
Support: 8090/7925/7714

USDCAD – Just shows you how weak trend lines are. Powered on thanks to Janet and at 5 year highs.
Resistance: 11170/11233
Support: 10859/10715

USDJPY – Back on the ema and testing minor resistance at 102.70, see nothing here yet.
Resistance: 105.57/108.35/110.50
Support: 100.62/100/99.80

GOLD – Risk off guys, Ukrainian orders army to Crimea, capitulating it to the Russians plus Yellen all over the bond market means inflation not an issue at this point either, so no reason to hold gold for safety or hedging purposes.
Resistance: 1427/1480
Support: 1,265/1,180/1,040

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