The USDX continues to bounce sideways under the key 84 level. The EURX is bouncing sideways in sympathy. The currency pairs are essentially bouncing sideways as well:
The Chinese GDP was not as bad as thought so we might even see a bounce across the broader stock markets. European stock markets have actually opened higher on this news.
I won't be following any signals until there is a clear make or break on the USDX 84 level. I don't expect that to happen until next week. Large momentum moves kicked in last week and these kinds of moves can't be sustained permanently. The move on the E/U has given up to 350 pips and the move on the Swissie has given over 270 pips! It is not surprising to have a relatively quiet, or sideways week, following such large moves. I'm trying to be patient and wait to catch the next big wave; being from Bondi I find that appropriate!
BTW: I've had to travel interstate today, quite unexpectedly, to be with my mother who is not well. I may not update again until Sunday evening.
The USDX is trying to make another push up at the 84 level:
The only TS 'risk off' signal from last night to have faded has been the Loonie. Common sense would dictate to wait to trade until after the Chinese GDP data and, better still, until after the USDX 84 level has either been clearly breached or bounced from.
The USDX has bounced off the key 84 level overnight:
This has resulted in some choppy trade on the currency front. The G/U has also bounced off its bottom trend line:
The A/U also bounced off its 4hr 200 EMA:
I'm not sure which way things will move from here. The 84 level on the USDX is key and until there is a clear break up or bounce down from this level I expect the choppiness to remain.
There is key Chinese GDP data out later today to watch out for.
Thursday 12/7 (8 pm)
I have noted some new TS 'risk off' signals. Some trades are still in play from the big moves last week.
I have new signals on the A/U, A/J, G/U, USD/SGD, Loonie and NZD/USD. I'm still wary shorting the Aussie pairs though and would look for other 'risk off' trades over these two. Also, both are near their 4hr 200 EMAs which might offer some support.
I have signals still in play on the E/U and Swissie from last week. Both of these trades have yielded a combined 570 pips so far!:
There is red flag US employment data due out later though plus tomorrows Chinese GDP. I think news items may drive a lot of sentiment with the the USDX so close to the major 84 level.
The poor AUD data seems to have spooked all of the pairs. Many of them look like they're setting up for further 'risk off' moves. That is, a n overall LONG USD movement. The USDX seems to be marching on out of its bull flag up to the 84 resistance level:
There is significant Chinese GDP data out tomorrow at midday (Sydney time). This might give some further direction if nothing else does before then.
Thursday 12/7 (11.30 am)
Poor Aussie employment data has curbed the rise of the A/J and A/U. This might bring these pairs back into alignment with their usual 'risk on/off buddies.
Still no new TS signals. I'd like to see them all align together when they do kick in though.
Markets continued to chop around last night on news that the Fed is open to more stimulus but might wait for things to get worse before acting.
The broader stock markets chopped around on this news:
The EURX did too:
The USDX has broken up and out of the bull flag pattern and is currently re-testing the break out line:
The USDX is still just below the major S/R level of 84 and this has been talked about as the level at which the Fed would act with more stimulus:
So, all of this makes TECHNICAL trading difficult. A clear break of the USDX up above 84 would see further 'risk off' trading BUT, then, stimulus intervention would see this trend quickly reverse.
I don't have any new TS signals on the pairs except for weak TS LONG signals on the Aussie pairs. I'm reluctant to take the A/U or A/J in the face of a potentially rising USD though. Both pairs are currently holding above their daily 200 EMA which is in their favour though! Also, there is AUD data out in a couple of hours. Healthy employment data might see me keen to LONG these two! BTW: The Aussie pairs do seem to be de-coupling from their usual correlation with typical 'risk off/on' trading:
We are finally home!
I can see that not much has happened on the FX trend front though so far this week. This isn't surprising given the big moves from last week. Markets can't trend in that style 100% of the time.
To me, the USDX looks to be be paused and even forming a bull flag pattern on the 4 hr chart. This too is no surprise as price is lurking just below the huge resistance level of 84. This is the monthly 200 EMA, a round number psychological number and the 75% fib retrace from the last swing high.
I don't have any new trend signals yet this week. Some are still in play from last week but, like I said, I won't be chasing them. I'm going to wait for new signals and I think that the USDX 84 level will be the decider here!
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