Despite a strong start in Asia, monday’s trade turnout a big loser as the German finance minister hinted that the results of the coming EU Summit on the 23rd may not be final, this contrary to the comments from the weekend G20 meeting giving Europe seven days to come-up with a solution for the debt crisis. At the close we have dark cloud covers and bearish engulfing patterns among the majors while elsewhere equity markets turnedout well into negative territory in the US and Europe though losses from the commodity market was limited. On the latter we note releases for the US were none too bad with NEw York area manufacturing contracting but the nation wide output figures held. Earlier on Tuesday we also saw China data with GDP expanding less than forecast at 9.1% against 9.3% though Industrial Production beat expectations and Retail Sales continue to grow. Combined with the US results we view this as supportice for the commodity market and would look forward for Aussy and Loonie to decouple from the risk aversion we have elsewhere. Look for a buy on dips in Aussy and Kiwi and a sell on rallies for the Loonie.
Monday saw Euro retreating as positive sentiment from the overthe weekend G20 meeting was soured by comments from the German finance minister hinting that ‘final’ resolutions and plans once more remain alterable. We now find EURUSD back inside the daily EMA’s with mixed signals as stochastic omes off 80 while macd is still rising. In the lower time frames we are seeing mixed signals as 4H stochastic is oversold and macd is dropping while hourly macd is bottoming out and stochastic pushing for overbought levels. Immediate risks calls for a further push up though were expecting a limited scope for the topside at 1.3828 for now. Given the mixed signals in $H and hourly charts we prefer staying away from breakout trades for the moment.
Following monday’s risk averse market, we have AUDJPY with a big sell-off to close back under the 55D EMA with daily indicators looking mixed, stochastic is coming off overbought levels while macd is rising. Thus far we have seen little price movement, not much of a surprise considering key releases from China. From the lower time frames we have a confluence of bears in 4H indicators with stochastic oversold though candles has given us a hammer. In hourly charts we have macd bottoming out while stochastic is heading for overbought levels. For now we prefer remaining sidelined as we wait for Chinese numbers.
Despite Friday’s close above the 55D EMA, Kiwi was uanble to see a follow through rally with yesterday’s price action taking us back inside the daily EMA lines while indicators are looking mixed, with stochastic coming off overbought levels while macd is pushing up. Note prices are once more under the weekly level SHS neckline. In intraday charts we have 4H indicators bearish, stochastic is in oversold territory while macd is opening lower. From the hourly picture we have an macd bottoming out while stochastic has already pushed to overbought areas. Given Chinese releases at 0200 GMT we prefer remaining sidelined though good Chine data should see us recouping yesterdays losses while falling short of consensus forecasts risks a continuation of Monday’s drop for 0.7768.
Monday saw USDCAD with a big rally bouncing off the 55D EMA to end up just below the 21D EMA at 1.0231(40), a strong resistance level. Daily indicators are looking mixed with stochastic coming off oversold levels while macd has dropped. From the lower time frames we have a confluence of buys in the 4H picture with stochastic overbought and macd rising, we also had a doji in the previous period though this was for Wellington trade. Hourly indicators for their suggests a resumption of the bear market with stochastic already dropping while macd begins to top off. As with Aussy we prefer waiting for China data with poor numbers an excuse for pushing past the immediate resistances while good figures would be a sell at market for a retest of yesterdays lows.
Monday saw a sudden reversal for a big black candle at the close in Aussy, daily indicators are mixed with stochastic coming off overbought levels while macd is rising. For now we are just above the 55D EMA with markets seeing little reaction to the latest RBA minutes despite a dovish tone to it. Note we face China data at 0200GMT where poor figures will be a good catalyst for continuing yesterday’s drop. In the lower time frames we have a hammer in 4H charts though indicators are bearish with stochastic staying oversold. Hourly indicators for their part are mixed with stochastic coming off oversold levels while macd is trying to bottom. Note Good China data would suggest reversing the Monday sell-off look for a bounce from 1.0139 while poor results from China risks a break of the 1.0139 strong support area.
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