We had a bunch of hot market moving events around the world yesterday. Here is the summery:
UK
Bank of England’s latest set of minutes resounded 9-0 vote in favor of doing nothing. The minutes didn’t give any more detail on when rate hikes were being planned, but they did show that there was a common consensus of surprise that the market wasn’t pricing in a rate rise sooner than 2015, something which has since been addressed by Mark Carney an a couple of other members. The lack of change made Mr. British pound move down for a while.
US
The Fed also gave us little in the way of positive change at their monetary policy announcement last night, and also lowered growth and employment forecasts, while edging down their long term interest rate forecasts. All members see rates rising to 1% by the end of next year, but that process isn’t going to start as soon as it will in the UK. As expected, they knocked another $10bn off their monthly market boosting bond purchases. Janet Yellen tried to caution markets that ultra-loose policy won’t be around forever, but her words fell on deaf ears as the S&P pushed on into uncharted territory and is now up almost 7% on the year (compare that to the UK, where the rates are low but the steroids are long gone, and the FTSE has risen by less than 0.5% this year)
Europe
The European Central Bank is likely to get a lecture from the International Monetary Fund today about being prepared to print money. Christine Lagarde will meet with European Finance Ministers and bank members to talk up the case for quantitative easing in the face of deflation to prevent a Japanese style “lost decade”. The FT has the story.
Middle East
The Iraq government has officially requested support from the Us in the form of air strikes, as the situation there worsens. Barack Obama is apparently sitting on his hands until the resignation of Iraqi prime minister, Nouri al-Maliki, who Mr Obama is not a fan of and doesn’t believe should form part of a new government. The President also told Congress yesterday that he doesn’t need permission from them to act in Iraq should he so wish.
The situation in the country is worsening with militants pushing further south and taking over the largest oil refinery in the country. This has prompted the oil majors to start extracting their employees from operations in the south of the country. Oil markets have continued to resist significant price rises, though this is unlikely to be sustainable in the face of an escalating situation. At the moment it seems to be the Indian Rupee which is suffering the most, with concerns that higher fuel import prices will hurt the country’s economic output are leading to a fall in the currency’s value. Other import dependent emerging markets are suffering similar falls.
Japan
Overnight news has been pretty limited, though the Bank of Japan’s reassurance that they are only half way to their QE goals has led to a decent jump in the value of the Nikkei share index.
Ms. USA seems to be dancing down against her major counterparts on the forex dance floor today, a delayed reaction from last night’s FOMC announcement, though we’ll have to wait and see whether the market has the appetite to take this further as the day progresses and the data announcements start. Those announcements include UK retail sales, US jobless claims and the euro group meeting that Christine Lagarde will be speaking at. It’s a public holiday in some parts of Europe today, so we do expect trading volumes to be lower but we don’t expect any less excitement.
Intraday Forex Technical Levels
EUR/USD Intraday: the upside prevails.
Invest Diva likes: Long positions above 1.3585 with targets @ 1.365 & 1.367 in extension.
If pair goes nuts: Below 1.3585 look for further downside with 1.357 & 1.355 as targets.
What’s up on the forex dance floor: The pair stands above its support and remains on the upside.
Supports and resistances:
1.369
1.367
1.365
1.3627 Last
1.3585
1.357
1.355
GBP/USD Intraday: the upside prevails.
Invest Diva likes: Long positions above 1.696 with targets @ 1.704 & 1.709 in extension.
If pair goes nuts: Below 1.696 look for further downside with 1.693 & 1.69 as targets.
What’s up on the forex dance floor: The pair has broken above its previous top and remains on the upside.
Supports and resistances:
1.713
1.709
1.704
1.7029 Last
1.696
1.693
1.69
USD/JPY Intraday: the downside prevails.
Invest Diva likes: Short positions below 102 with targets @ 101.6 & 101.45 in extension.
If pair goes nuts: Above 102 look for further upside with 102.1 & 102.3 as targets.
What’s up on the forex dance floor: The pair stands below its resistance and remains under pressure.
Supports and resistances:
102.3
102.1
102
101.825 Last
101.6
101.45
101.3
USD/CHF Intraday: the downside prevails.
Invest Diva likes: Short positions below 0.8955 with targets @ 0.8915 & 0.8905 in extension.
If pair goes nuts: Above 0.8955 look for further upside with 0.897 & 0.8985 as targets.
What’s up on the forex dance floor: The pair stands below its resistance and remains under pressure.
Supports and resistances:
0.8985
0.897
0.8955
0.8928 Last
0.8915
0.8905
0.8895
NZD/USD Intraday: the upside prevails.
Invest Diva likes: Long positions above 0.8675 with targets @ 0.8735 & 0.8765 in extension.
If pair goes nuts: Below 0.8675 look for further downside with 0.8635 & 0.86 as targets.
What’s up on the forex dance floor: Technically the RSI is above its neutrality area at 50.
Supports and resistances:
0.88
0.8765
0.8735
0.8731 Last
0.8675
0.8635
0.86
AUD/USD Intraday: the upside prevails.
Invest Diva likes: Long positions above 0.9365 with targets @ 0.944 & 0.9465 in extension.
If pair goes nuts: Below 0.9365 look for further downside with 0.9345 & 0.932 as targets.
What’s up on the forex dance floor: Technically the RSI is above its neutrality area at 50.
Supports and resistances:
0.95
0.9465
0.944
0.9418 Last
0.9365
0.9345
0.932
USD/CAD Intraday: the downside prevails.
Invest Diva likes: Short positions below 1.0855 with targets @ 1.079 & 1.0765 in extension.
If pair goes nuts: Above 1.0855 look for further upside with 1.0875 & 1.09 as targets.
What’s up on the forex dance floor: The RSI is mixed with a bearish bias.
Supports and resistances:
1.09
1.0875
1.0855
1.0823 Last
1.079
1.0765
1.073
US Index Levels
S&P500 (CME)
Long positions above 1937 with targets @ 1953 & 1964 in extension.
Alternative scenario: Below 1937 look for further downside with 1924 & 1917 as targets.
Dow Jones (CBT)
Long positions above 16750 with targets @ 16880 & 16930 in extension.
Alternative scenario: Below 16750 look for further downside with 16625 & 16550 as targets.
Nasdaq 100 (CME)
Long positions above 3780 with targets @ 3814 & 3826 in extension.
Alternative scenario: Below 3780 look for further downside with 3755 & 3744 as targets.
Russell 2000 (ICE)
Long positions above 1162 with targets @ 1185 & 1192 in extension.
Alternative scenario: Below 1162 look for further downside with 1148 & 1136 as targets.
Long term traders. Don’t sweat the small losses and look at the big picture. Short term traders, invest responsibly. And wait, are we hooked up on the social media? To get the most recent intraday updates, don’t forget to follow Invest Diva on Twitter and Facebook.
