MIDDAY SNAPSHOT & ANALYSIS OF SELECTED RATES
General weakness from the US data releases this morning, highlighted by the unimpressive retail sales, have seemingly set the tone for the day with the USD reversing course and finding some favor amongst many investors looking to exit their riskier and higher yielding positions as a result. The reaction has been broad based and extends to all markets with equities pulling back into the red after showing gains of some 1% higher on the futures, and commodities also retreating to opening levels after earlier gains. The Yen has also been a prime beneficiary of the shift in sentiment with the single currency rallying on heavy yen cross related selling. Ex-Bank of England MPC member David Blanchflower was on the wires with some more downbeat comments after mitigating the stronger overnight GDP data out of Germany and France and saying that he was concerned about a “W” shaped recovery. Overall trade however remains extremely choppy and there has been consistent buying of currencies into dips. The Euro is still bid since opening in the US session by 1.4245 and a retest of the post retail sales highs by 1.4330 can not be ruled out into the afternoon.
ANALYSIS OF SELECTED RATES
Gbp/Usd: The doji close and outside day on Wednesday have signaled some form of an end to the latest sharp setbacks with the market rebounding into Thursday to trade just over 1.6600 thus far. At this point it now becomes more difficult to assess whether the latest pullback off the 1.7045 yearly highs from the previous week was merely a minor correction, or whether we have put in a more meaningful top by 1.7045 and are looking to head lower over the coming days and weeks. We will adopt the latter theory today and assume a USD bullish outlook, with the hope that any additional rallies intraday will once again be met with good selling pressure. However, without any strong conviction, we also recommend playing this on the conservative side and only looking to sell on an extreme intraday rally back above 1.6700 to the 50% retracement off of the latest moves. At that point, even if the market does decide that it wants to continue higher, any additional gains on Thursday should be limited from there which should give us an opportunity to exit the trade if no follow through is seen. STRATEGY: SELL @1.6715 FOR AN OPEN OBJECTIVE, STOP @1.6915. RECOMMENDATION TO BE REMOVED IF NOT TRIGGERED BY NY CLOSE (5PM ET) ON THURSDAY.
P&L Update and Overview: Many of you have been asking for a way to better track trading results and open positions. In response to these requests and in an effort to be fully transparent, a simulated portfolio was been created in June to track and mirror all recommendations and trades. Below is a return on equity curve since inception on June 1, 2009, along with an open and closed position tracker. I am hopeful that this will make things easier for you all.
Additionally, please feel free to check out a full profit and loss statement since inception on June 1, 2009.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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Joel Kruger publishes 6 daily pieces:
“Tech Talk” – A Daily Video Highlighting Technical Developments in the Overnight Session of Trade.
Monday-Friday (between 5:30am-6:30am EST)
“Morning Slices” – Morning Overview using Fundamental, Technical, Flow, and Quantitative Analysis (Includes “Trade of the Day”).
Monday-Friday (between 6:30am-7:30am EST)
“Indicator of the Day” – A Feature Report that Highlights our Most Significant Technical Indicator of the Day.
Monday-Friday (between 8:00am-9:00am EST)
“Midday Snapshot” – A Midday Fundamental Update, along with Technical Analysis of Selected Rates.
Monday-Friday (between 10:30am-11:30am EST)
“Scandi Daily” – A Specialized Daily Fundamental and Technical Overview of the Nordic Currencies. (This report is only distributed through email. Please contact Nordic@fxcm.com if you would like to be added to distribution.)
Monday-Friday (between 11:30am-12:30pm EST)
“Daily Classical” – A Daily Technical Overview of the Major Currencies.
Monday-Friday (published between 2:00pm-3:00pm EST)
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