Note that this is my current view, but if market conditions change my view can change too. Generally I will trade in alignment with what I have noted here, though I will wait for a set-up before I enter. I base my view on technical and fundamental information. This is my beliefs and you are welcome to have opposite ones. Having a plan is more important than the actual direction for me.
- Wait DXY.– MT is sideways normal. In the US, while manufacturing expansion might have been weakening of late, consumer sentiment and inflation are still showing no real sign of the economy being in any kind of trouble. The FOMC came and went presenting division amongst the Fed with two members opposing the cut and one calling for a larger one. Powell’s tone was certainly not dovish but perhaps there wasn’t enough optimism to turn the initial boost to the Dollar into further strength. Data will be back into focus this week with the PCE data set and Durable Goods Orders amongst the highlights.
- Wait GBP/USD. – MT is bull normal. With a no-deal Brexit becoming less and less likely the Pound found the strength to push to the edge of the 1.25 – 1.27 resistance zone where it has been stalling over the past week. The BOE left rates on hold at 0.75% reiterating its commitment to lift the benchmark as the Brexit clouds dissipate in the years ahead. In the meantime, weaker inflation and disappointing retails sales figures are showing that the protracted political drama is having a real impact on the economy. In the coming week we should see a Supreme Court ruling on whether it was unlawful or not to prorogue Parliament and some more news regarding negotiations over the Irish backstop which seems to be the main sticking point in striking a deal with the EU. While the Pound remains above 1.24 we maintain a bullish bias.
- Wait USD/JPY. – MT is bull normal. The shift in sentiment initially spurred by the easing in geopolitical tensions showed potential signs of fragility at the end of the week when a low-level Chinese trade delegation cut short their visit to the US. But this might just have been a case of conflicting schedules. Our bullish bias remains in place whilst the pair trades above 107.
- Sell AUD/USD. – MT is sideways normal. The fundamentals still remain mostly negative for Australia with the only bright spot being the domestic real estate market for established dwellings. After a triple test of 0.67 the Aussie had managed to climb back to potential resistance levels near 0.69 on the back of easing geopolitical tensions. However, disappointing Chinese data coupled with an uptick in unemployment and the indication from the RBA minutes that a further rate cut is likely to come in October all contributed to making the pair fall back below 0.68 and we could see more declines from here.
- Wait EUR/USD. – MT is sideways normal. The ECB did not disappoint earlier this month and took fairly decisive action to which the market eventually responded positively pushing up the Euro strongly on the day of the announcement. However, fundamentals remain weak for the Eurozone and it is really now up to the politicians to intervene with fiscal stimulus measures. In the past week the pair traded sideways while the market has started pricing in a bottom for interest rates. This week we will see Flash PMI’s data, the German IFO Business Climate Survey and hear two speeches by outgoing ECB President Mario Draghi.
- Sell NZD/USD. – MT is bear normal. The economic outlook for New Zealand remains weak and the corrective bounce which occurred on the back of easing geopolitical tensions has been sold off aggressively from resistance at 0.645. The pair has now closed below 0.63, the level at which the correction had started, indicating that lower levels are likely to ensue. In the coming week the RBNZ decides on the overnight cash rate but having delivered a surprise 0.50% cut in August it might hold off further cuts until the next meeting in November.
- Wait USD/CHF. – MT is bull normal. On Wednesday the Swissie managed to put in a close above resistance at 0.995 which we consider as a bullish development however, prices have now fallen back into the recent range. Whilst above 0.985 we maintain a bullish bias.
- Wait USD/CAD. – MT is sideways normal. The Loonie had very little net movement over the week despite the gyrations in oil prices. Data showed a deterioration in inflation and retail sales, but price action was fairly muted. We don’t have any strong view here at the moment.
- Sell EUR/GBP. – MT is bear normal. After reversing from long term resistance at 0.93 six weeks ago, the pair has continued to move lower on a weekly basis. The outlook for the Euro remains bearish, however Brexit headlines will be an influence for the short-term movements in the pair.
- Wait EUR/CHF. – MT is bull normal.
- Wait AUD/JPY. – MT is sideways normal.
- Wait NZD/JPY. – MT is sideways normal.
- Wait GBP/JPY. – MT is bull normal.
- Wait EUR/JPY. – MT is bull normal.
- Wait CAD/JPY. – MT is bull normal.
- Wait CHF/JPY. – MT is bull normal.
- Buy GBP/NZD. – MT is bull fast.
- Buy EUR/NZD. – MT is bull normal.
- Buy AUD/NZD. – MT is bull normal.
- Buy EUR/AUD. – MT is sideways normal.
- Buy GBP/AUD. – MT is bull normal.
- Sell AUD/CAD. – MT is sideways normal.
- Wait GBP/CAD. – MT is bull normal.
- Wait EUR/CAD. – MT is sideways normal.
- Sell NZD/CAD. – MT is bear normal.
- Wait GBP/CHF. – MT is bull normal.
- Wait CAD/CHF. – MT is bull normal.
- Wait NZD/CHF. – MT is sideways normal.
- Wait AUD/CHF. – MT is sideways normal.
- Wait Gold. – MT is sideways normal.
- Wait Oil. – MT is bull normal.
- Wait S&P 500. – MT is bull normal.
- Wait DAX. – MT is bull normal.
- Wait Nikkei. – MT is bull normal.
- Wait T-Notes. – MT is bear normal.
(MT = Market Type: Click for more information on market types.)