Does it feel like autumn to you yet? It sure does here in New York and among US traders going into a bank holiday. Despite a positive non-farm payroll report out of the US on Friday afternoon, investors were still wary of global events that could take the shine off their recently renewed optimism particularly going into a long weekend.
Most markets in Europe moved lower, as fears that Ukraine could be slipping back into all out conflict reignited. The one equity market exception was the FTSE, where the positive jobs market data led to a rise in metals prices, which in turn led to listed mining giants rising and dragging the wider index up with them.
In Ukraine, the heaviest fighting since the cease fire was reported over the weekend. Kiev have accused Moscow of renewing the violence with munitions supplied to the rebels, as well as Russian troops getting involved. The two month long cease fire now looks is incredibly close to being over, with all sorts of risks if that does become the case. Russia is multi-tasking, according to NATO, with some 40 “unusual” incidents taking place in the last eight months, some of which could have led to conflict with NATO members. Japan seem less concerned and have held a meeting in Beijing with Mr Putin to try and repair their relationship and resume the process of reaching a peace agreement, which has been outstanding since the Second World War, according to Bloomberg.
Looking to this week, the next couple of days are pretty quiet, with a lack of tier one data today and a market holiday in the US tomorrow. Wednesday turns the focus back to central banks though, with the Bank of England’s quarterly inflation report. Given that the only reason to raise rates at the moment would be the threat of inflation investors will be looking for changes of tone in the language of the BoE to see just how far back a rate hike has been pushed.
Today we’ll also hear from Mark Carney, who is likely to say that taxpayer bailouts for banks are a thing of the past. Mr Carney heads up the Financial Stability Board, a body that advises the G20 on improving global financial stability and this weekend’s G20 in Brisbane is likely to see a sign off on new legislation for the banks that are ‘too big to fail’ to adhere to.
Later in the week the US could be in for some extreme weather that could effect not only the forex dance floor but , energy prices and the economy in general as well. The return of a polar vortex might hit 42 states and could move the markets if it hangs around for a while, like the last one did. Other items of note are French and German GDP releases on Friday and UK unemployment on Wednesday, before the inflation report.
Intraday Forex Technical Levels
EUR/USD 4-hour: Teasing the 23% Fibonacci level.
Invest Diva Likes: Short positions below 1.2487 with targets at 1.2363 and 1.2299 in extension.
If Pair Goes Nuts: Above 1.2487 look for further upside towards 1.2563 and 1.2624.
What’s up on the Forex Dance Floor: After rebounding from the previous bottom, the pair is rebounding and teasing the 23% Fibonacci level below the Ichimoku’s cloud. The RSI is around the neutrality area.
Supports and Resistances
1.2624
1.2563
1.2487 Pivot Point
1.2363
1.2299
GBP/USD 4-hour: Rebounded from the previous bottom.
Invest Diva Likes: Short positions below 1.5892 with targets at 1.5789 and 1.5719 in extension.
If Pair Goes Nuts: Above 1.5892 look for further upside towards 1.5955 and 1.6007.
What’s up on the Forex Dance Floor: The pair failed to break below the support level and rebounded. It is now teasing the 23% Fibonacci level below the Ichimoku’s cloud with the RSI slightly below the neutrality area.
Supports and Resistances
1.6007
1.5955
1.5892 Pivot Point
1.5789
1.5719
USD/JPY 4-hour: Rebounding.
Invest Diva Likes: Long positions above 114.16 with targets at 115.60 and 116.56 in extension.
If Pair Goes Nuts: Below 114.16 look for further downside towards 112.64 and 111.68.
What’s up on the Forex Dance Floor: The pair is rebounding from the previous top at 105.60 and back to the pivot level at 114.16 above the Ichimoku’s cloud. The RSI is going up from the neutrality area.
Supports and Resistances
116.56
115.60
114.16 Pivot Point
112.64
111.68
USD/CAD 4-hour: Confirmed the double top pattern.
Invest Diva Likes: Long positions above 1.1317 with targets at 1.1372 and 1.1463 in extension.
If Pair Goes Nuts: Below 1.1317 look for further downside towards 1.1272 and 1.1226.
What’s up on the Forex Dance Floor: The pair is teasing the 38% Fibonacci level and the Ichimoku’s cloud after completing the double top pattern. The RSI is moving below the neutrality area.
Supports and Resistances
1.1463
1.1372
1.1317 Pivot Point
1.1272
1.1226
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