MIDDAY SNAPSHOT & ANALYSIS OF SELECTED RATES
Currencies have responded quite well to the on the whole better than expected batch of US data this morning. While the Case-Shiller was more or less in-line, consumer confidence and Richmond Fed were much stronger. The consumer confidence reading was the key standout, with the data series coming in at 39.2 after analysts had been expecting a 29.7 print. Early rumors of a 38.6 print were also exceeded to help spark some broad based profit taking in long Yen and USD positions. Equities also responded positively after initially being weighed down on more concerns over the swine flu virus and fears that some of the major US banks would need to bolster their capital cushions post the release of the stress tests. Commodities continued to suffer at the hands of more talk of price cuts on reduced demand with oil down some 2.0% and gold down some 1.70%. Looking ahead, SNB Roth is scheduled to speak and we would recommend that Swiss traders pay close attention, as the central banker has been a market mover since officially implementing an active intervention policy. Market participants will also start to focus on Wednesday’s Fed with the key focus on additional QE measures along with any signs from Bernanke of stabilization within the economy.
ANALYSIS OF SELECTED RATES
Eur/Usd: Any intraday rallies are still classed as corrective and should be used as good opportunities to build on existing short positions. There is however room for additional gains today with a lower top ideally sought out by 1.3145 ahead of renewed weakness back below 1.2965. Only back above 1.3255 would give reason for concern. As such we will look to sell on a rally to the mid-1.3100’s today if given the chance. Strategy: SELL @1.3145 FOR A 1.2885 OBJECTIVE, STOP 1.3265. Stops to be trailed to cost on a break back below 1.3100. If trade triggers and 1.3100 not broken, position to be closed out at NY close (5pm NY time) on Tuesday. Recommendation to be removed if not triggered by NY close on Tuesday.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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“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”).
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“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)
“Cross Country” – A Midday Fundamental Update, along with Technical Analysis of Selected Cross Rates.
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“Daily Classical” – A Daily Technical Overview of the Major Currencies.
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