Matt Simpson, CFTe, MSTA
CityIndex
ASIA ROUNDUP:
Initially a quiet session Asia trading heated up towards the end to see AUD and NZD sell-off across the board and Indices continuing the bullish lead from Wall Street.
USD retraced against G10 currencies early Asia trading with AUS200 and Nikkei posted modest gains, following the bullish lead from Wall Street.
Markets continue to suspect an interest rate hike next week of 25bps next week by RBNZ but there is talk of the end of year rate projections being lower than 3.75% following yesterday's lower CPI.
AUD business confidence and New Motor vehicle sales came in lower to see A$ edge lower initially but sell-off more heavily towards the back of the Asia session.
UP NEXT:
With data from the US and CAD at 12:30GMT we can safely expect some action on USDCAD later. The trouble is, due to there being such an array of data it does increase the odds of whipsaws and confused price action during and potentially just after the release.
Both Boc and Statistics of Canada will release their version of CPI y/y with higher readings than forecast being bullish CAD. We also have Jobless claims in the US which would be bullish USD for a lower reading. Unemployment is within a downtrend so a significantly higher reading could see the Greenback sell-off, as looking against all the majors the USD has produced reversals around areas of support or resistance.
Shortly after we also have the Philly Fed Manufacturing with a reading above 0 indicating improving manufacturing sentiment.
Pairs to Monitor: USDCAD, GBPUSD, EUUSD, USDJPY, AUDCAD,
TECHNICAL ANALYSIS:
GBPJPY: Déjà Vu? Intraday Bull Flag
This is an identical set-up to yesterday which turned out very well. GBP is also gaining bullish momentum across the board which provides an extra confluence of confidence for this bullish run continuing.
Whilst I have drawn a pennant/flag formation I am hoping for a retracement towards the daily pivot to provide a tighter reward/risk and enable a lower stop placement and target DS1.
USDCHF: Resistance zone
H4 has produced a Shooting Star Reversal followed by a Dark Cloud cover, which failed to reach the high o the Shooting Star Reversal. Since then we have sold off below the Dark Cloud cover and below the daily pivot.
Retracements towards the daily pivot and Monthly Pivot could be used as opportunities to seek bearish candles on H1 or lower to join a (hopefully) bearish run down towards DS1 and DS2.
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