Nervous markets

(Video is in Japanese)

Markets bounced between gains and losses in Tuesday’s trading, before settling on the latter and making every day of 2015 a losing day so far. The driver, once again, was the oil market, where WTI touched $47 per barrel and Brent joined it below the $50 level.

Currencies reacted with some more Dollar strength, although much more gradual than we’ve seen recently. Mr. Euro seems to be slightly more in the firing line, as conversation grows on QE and Greece. Interestingly, if Draghi were to act on the 22nd of this month as is rumored, he would probably want to stay clear of Greek debt, as they go to the polls on the 25th of the month.

The Germans have warned against any asset purchases ahead of the elections, which would seem the sensible thing to do. One German newspaper cites government sources who say that they are preparing for a possible Greek exit and does see risks of bank collapse if they do decide to go, with Greek savers storming banks to try and secure their euro deposits before the country implements currency controls and switches these out to the new currency.

From the UK, the British Retail consortium have reported prices falling less sharply in December than in previous months. The slower pace of declines is only marginal, but we’ll take what good news we can, as the UK starts to draw parallels with Europe when it comes to inflation.

Overnight we’ve seen mixed trading in equity markets and futures for Europe and the US are also a mixed bag, so perhaps today won’t be quite as painful for stock traders. The London session started with better than expected German jobs data and retail sales, followed by positive US ADP employment and trade balance.  The next figure leading up to Friday’s non-farms is the release of minutes from the Fed’s last meeting today. Invest responsibly.

Intraday Forex Technical Levels

EUR/USD 4-hour: Broke below the key support level.

Invest Diva positioning: Short positions below 1.1875 with targets at 1.1782 and 1.1663 in extension.

Technical reasons why: The pair broke below the key support level at 1.1875 and is heading to our first bearish target below the Ichimoku’s cloud. The RSI is moving below the oversold zone.

Alternative Scenario: Above 1.1875 look for further upside toward 1.9700 and 1.2056.

Where I’m setting my stops and limits:

GBP/USD 4-hour: Downtrend prevails.

Invest Diva positioning: Short positions below 1.5173 with targets at 1.4954 and 1.4835 in extension.

Technical reasons why: The pair continues to move down below the Ichimoku’s cloud. The RSI keeps moving below the oversold zone.

Alternative Scenario: Above 1.5173 look for further upside toward 1.5273 and 1.5375.

Where I’m setting my stops and limits:

AUD/USD 4-hour: Testing the Ichimoku’s cloud.

Invest Diva positioning: Short positions below 0.8036 with targets at 0.7977 and 0.7879 in extension.

Technical reasons why: The pair failed to break above the Ichimoku’s cloud and is moving down with the RSI below the neutrality area. Market sentiment of one of the largest international brokers shows that 70% of traders are long the pair and the combination of the technicals and current sentiment gives a further bearish bias.

Alternative Scenario: Above 0.8036 look for further upside towards 0.8102 and 0.8183.

Where I’m setting my stops and limits:

USD/CHF 4-hour: Uptrend prevails.

Invest Diva positioning: Long positions above 1.0162 with targets at 1.0307 and 1.0426 in extension.

Technical reasons why: The pair continues to move up above the Ichimoku’s cloud. The RSI is moving above the overbought zone.

Alternative Scenario: Below 1.0162 look for further downside towards 1.0052 and 0.9963.

Where I’m setting my stops and limits:

USD/CAD 4-hour: Broke above the key resistance level.

Invest Diva positioning: Long positions above 1.1795 with targets at 1.1880 at 1.1996 in extension.

Technical reasons why: The pair broke above the key resistance level at 1.1795 and is teasing our first bullish target above the Ichimoku’s cloud. The RSI is above the overbought zone.

Alternative Scenario: Below 1.1795 look for further downside towards 1.1665 and 1.1600.

Where I’m setting my stops and limits:

USD/JPY 4-hour: Teasing the Ichimoku’s cloud.

Invest Diva positioning: Short positions below 119.35 with targets at 117.98 and 115.59 in extension.

Technical reasons why: The pair failed to break above the pivot level at 119.35 below the Ichimoku’s cloud. The RSI is below the neutrality area.

Alternative Scenario: Above 119.35 look for further downside toward 120.63 and 121.83.

Where I’m setting my stops and limits:

• Close x
• Open ^
• EUR/USD
• GBP/USD
• AUD/USD
• USD/CHF
• USD/CAD
• USD/JPY
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