The US$, European and US stocks, Gold and Oil all obviously got the same memo…the theme for the day was ‘down’. The US$ was down despite numerous Fed speeches supporting the case of a December hike and I’m reading that profit taking is the reason. This Fed rhetoric however has kept pressure on stocks whereas supply and global demand issues continue to weigh on Oil, the latter theme also compounding the issue for stocks with Oil stocks trading lower. US$ weakness is allowing a few FX pairs to recover a bit following some decent sized moves over recent weeks though and this is setting up potential target areas that are well worth watching.
Another point worth noting is that if US$ weakness picks up as a theme at all then some of the cross pairs might become less attractive for trading, eg: GBP/AUD, EUR/AUD, GBP/NZD, as the component currencies here might all recover somewhat in tandem. In saying this though the AUD/NZD monthly chart is suggesting to me that we could be heading for a possible period of divergence between these two currencies.
USDX weekly: So, they’re suggesting profit taking is the cause here but how long will that last if that is the case? Tonight’s batch of US data might help clear this up a bit. US Retail Sales will be closely watched and any decent print there should help support the US$ and I’ll watch for any reaction-alignment. However, I’m still thinking the US rate hike is priced in and it’s going to take more than that to get this over the 100 mark:
EURX weekly: smelling a bit of blood here??? Back above the key 96 for now:
S&P500: a down day and a beautiful SHORT set up was available for US traders!
Gold weekly: down for sure but it still has a bullish descending wedge look to it for now. Any continued US$ weakness would help to support this metal and other commodities:
Silver weekly: ditto here:
Forex: Watch out for another Fed speech due shortly during today’s Asian session and, later on, EUR German Prelim GDP, US Retail Sales, PPI and Prelim UoM Consumer Confidence.
E/U 4hr: after trading lower for the last 5 weeks this could try and put in a 61.8% fib recovery…even if it’s only short-lived. Worth watching for:
E/J 4hr: struggling to escape the 132 level. This could also try for a recovery but U/J weakness might make this struggle:
A/U: stellar AUD jobs data helped to lift this pair so keep an eye out for any break or respect of the upper trading channel trend line. This level also ties in with the monthly pivot and top of the 4hr and daily Ichimoku Cloud so will provide a lot of resistance. However, any breakout would be a rather bullish signal:
A/U 4hr Cloud:
A/U daily Cloud:
A/J 4hr: gave the triangle break but U/J and stock weakness is weighing here for now:
GBP/USD 4hr: as suspected, this has pulled back to test the broken trend line to the ‘T’. Any move higher might target the 61.8% fib region as this is near the monthly pivot and 4hr 200 EMA:
Kiwi: this is still wedge bound and within the larger Flag pattern:
Kiwi daily: a Bear Flag or bullish inverse H&S? Watch trend lines for clues:
U/J 4hr: weaker with the lower US$ and stocks. Watch fib levels as targets with any continued weakness:
GBP/JPY 4hr: has bounced off the upper trend line…….. AGAIN!
GBP/AUD 4hr: choppy and may not be of much appeal if US$ weakness continues.
GBP/NZD 4hr: holding above the 2.30 level:
EUR/AUD 4hr: respecting the trading channel:
EUR/NZD weekly: has bounced up off the 50% fib region:
AUD/NZD monthly: As an Aussie, I am still encouraged by this chart!