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Today is the day


Jun.05.2014

THE DAY OF RECKONING FOR THE ECB HAS ARRIVED!

A Reuters poll yesterday sees Mr. British Pound set to make solid gains against the euro both immediately and in the coming years. As the monetary policy path is diverging further and further between the BoE and the ECB. With the BoE widely expected to be the first major central bank to hike interest rates next year, whereas the ECB are set to slash them tomorrow, it is widely believed. However markets are still unsure as to whether Mario draghi will offer enough to comfort markets sufficiently. What comes beyond a rate cut is the real question.

The divergence between the two is getting even more extreme and currently there is a big reluctance to sell sterling as the UK economy is doing, relatively speaking, okay. The poll also covered long term cable expectations, which have sterling losing a little bit of ground over the greenback over the next 6-12 months. Sterling has gained well over a percent this year on the dollar and is currently sitting at a weighted five and a half year high. However the states are winding down their QE package and are seemingly faring well. The race to be the strongest is well and truly on, with the euro having fallen out already there are still two contenders.

Data released from the Eurozone yesterday had a sobering effect upon European stocks as well. With PMI data across the board falling below expectations and GDP numbers staying in line but still growth is at a glacial pace, QoQ 0.2%. Factor in inflation (real inflation) and a snail’s pace looks positively brisk. Despite poor ish data across the globe we are still waiting for an event and are all confident that tomorrow the ECB will not disappoint. Rarely has Mr Draghi had such a captive audience.

US stocks were broadly flat yesterday however dipped earlier in the day off the back of broadly poor unemployment data. With indexes still sitting very near record levels, traders are very reluctant to make moves in either direction until significant information is handed to them. US trade balance data was quite significantly offside however the reluctance to act across all equities is palpable. An odd situation seems to be occurring where the reasons for the recent gains lack conviction and backing and markets do not seem to be strong enough to grow by themselves without intervention by the FED. Furthermore this Fridays US jobs data may well deliver a blow to the recent gains. It would seem that recent hubris has run out and uncertainty has set in.

The G8 has now changed to the G7 as Russia are snubbed. For the first time in 17 years the world’s leading industrialized nations met in Brussels leaving Vladimir Putin out in the cold, in retaliation for the seizure of Crimea. The event was moved from the Russian Black Sea resort of Socchi at the last minute to Brussels, as not getting invited was not quite severe enough. Various topics have been headlined from the global growth stability, unemployment and the list continues, however the main topic of conversation will no doubt be the conspicuously empty eighth chair.

This morning we have already seen Chinese PMI data fall modestly to 50.7 from 51.4 However general consensus is that China will achieve its growth targets. "we can still count on China for some time to continue to produce quite solid growth,"

Later today the big news that we have been waiting for commences with the BoE rate decision, followed by te ECB rate decisions and ancillary measures. Quite enough news for one day, it should be a relatively bumpy ride so hold on to your hats.

Long term traders. Don’t sweat the small losses and look at the big picture. Short term traders, invest responsibly. And if you liked this video, share it on Facebook or Twitter or any other awesome means of social media and help you friends learn something new today.

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Intraday Forex Technical Levels

EUR/USD Intraday: turning down.

Invest Diva likes: Short positions below 1.363 with targets @ 1.3535 & 1.351 in extension.

If pair goes nuts: Above 1.363 look for further upside with 1.365 & 1.367 as targets.

What’s up on the dance floor: The pair has broken below its support and remains on the downside.

Supports and resistances:
1.367
1.365
1.363
1.3589 Last
1.3535
1.351
1.348

GBP/USD Intraday: bullish bias above 1.67.

Invest Diva likes: Long positions above 1.67 with targets @ 1.678 & 1.682 in extension.

If pair goes nuts: Below 1.67 look for further downside with 1.666 & 1.662 as targets.

What’s up on the dance floor: The pair stands above its support and remains on the upside.

Supports and resistances:
1.685
1.682
1.678
1.6759 Last
1.67
1.666
1.662

USD/JPY Intraday: under pressure.

 

Invest Diva likes: Short positions below 102.8 with targets @ 102.25 & 102 in extension.

If pair goes nuts: Above 102.8 look for further upside with 103.1 & 103.45 as targets.

What’s up on the dance floor: The pair is breaking below its support as the RSI is badly directed.

Supports and resistances:
103.45
103.1
102.8
102.482 Last
102.25
102
101.85

USD/CHF Intraday: the upside prevails.

Invest Diva likes: Long positions above 0.8935 with targets @ 0.901 & 0.903 in extension.

If pair goes nuts: Below 0.8935 look for further downside with 0.892 & 0.891 as targets.

What’s up on the dance floor: The pair is on the upside and is breaking above its resistance.

Supports and resistances:
0.906
0.903
0.901
0.8967 Last
0.8935
0.892
0.891

NZD/USD Intraday: key resistance at 0.8475.

Invest Diva likes: Short positions below 0.8475 with targets @ 0.84 & 0.835 in extension.

If pair goes nuts: Above 0.8475 look for further upside with 0.85 & 0.8515 as targets.

What’s up on the dance floor: The RSI has struck against a major resistance around 70% and is reversing down.

Supports and resistances:
0.8515
0.85
0.8475
0.8456 Last
0.84
0.835
0.8275

AUD/USD Intraday: towards 0.933.

Invest Diva likes: Long positions above 0.9255 with targets @ 0.9315 & 0.933 in extension.

If pair goes nuts: Below 0.9255 look for further downside with 0.923 & 0.9205 as targets.

What’s up on the dance floor: The RSI is bullish and calls for further upside. The pair validated an ascending Triangle pattern calling for a rise towards 0.933.

Supports and resistances:
0.937
0.933
0.9315
0.9298 Last
0.9255
0.923
0.9205

USD/CAD Intraday: turning down.

Invest Diva likes: Short positions below 1.0955 with targets @ 1.09 & 1.0885 in extension.

If pair goes nuts: Above 1.0955 look for further upside with 1.099 & 1.101 as targets.

What’s up on the dance floor: The RSI is bearish and calls for further downside. The pair has broken below a bullish channel support and its 50-period moving average (in blue).

Supports and resistances:
1.101
1.099
1.0955
1.0926 Last
1.09
1.0885
1.0865

US Index Update

S&P500

Long positions above 1914 with targets @ 1927 & 1932 in extension.

Alternative scenario: Below 1914 look for further downside with 1904 & 1894 as targets.

Dow Jones

Long positions above 16630 with targets @ 16745 & 16820 in extension.

Alternative scenario: Below 16630 look for further downside with 16560 & 16465 as targets.

Nasdaq 100

Long positions above 3706 with targets @ 3749 & 3765 in extension.

Alternative scenario: Below 3706 look for further downside with 3688 & 3660 as targets.

Russell 2000 (ICE)

Long positions above 1116 with targets @ 1134 & 1137 in extension.

Alternative scenario: Below 1116 look for further downside with 1109 & 1100 as targets.

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