Today’s focus turns to the AUD, EUR & JPY

Majors starting to drift

After a decent one way move, the Majors starting to drift. Like we’ve seen on the USD, the currencies can enter a phase where that trend or momentum comes into question and traders start ‘wondering’ is it going to continue or do we see a relief rally.

That exactly where we’re at right now. Sure the USD Index hit a 2018 high of 92.98 but that was on the back of weak German Industrial orders, not as a direct result of strong US economics.

If you look at the major pairs today ‘without adjusting’ the trendlines you’ll see what I mean…. erratic sidewise trading, up and down through trendlines all over the shop, so we’re seeing the Majors starting to drift.

Identifying this early will save you a lot of grief and I’d say a bit of cash as well.

We have to wait for the momentum to come back into play and that’s only going to come via ‘high impacting’ releases, and primarily US economic releases.

So that means we have to wait until Wednesday and Thursday for clear momentum.

That doesn’t necessarily mean we don’t have trading opportunities, it just means we should wait for economic data on the other major currencies as well.

As we saw yesterday the German economic data turned out to be the best opportunity and with the markets precariously balanced the data doesn’t have to be over the top to get the ball rolling.

Remain patient and wait for the market to give you the next best trade…..don’t force it or you’ll pay the price.

Check our Next Best Trades Watchlist for full details as to which specific pairs we are focusing on.

Asian Session

We could see some decent activity today with a number of releases scheduled.

Japanese Household spending data is due and that could give the Nikkei an injection of energy (either way). The Nikkei is due to open up +30 so that’s your benchmark starting point.

This is followed up by Aussie retail sales data. This is generally high impacting although the AUDUSD lacks clear direction to me at this stage, which makes it a little trickier.

Chinese Trade Balance data is on the economic calendars but with no timeframe. So just watch out for that as the result will impact AUD & NZD.

Also, keep an eye on the RBNZ inflation expectations due out around midday in Australia. Any significant changes to their expectations will definitely shift the NZDUSD.

European Session

The EURUSD is already sliding lower so we’ve got another good trading opportunity today with Swiss and German data scheduled. The trend is down so weak numbers work for us the best!

We also have UK Halifax house prices which brings GBPUSD back into the frame. Halifax is one of the biggest house lenders so this number will impact if it’s variant. Weak house prices on top of the recent weak economic data should send GBPUSD lower yet again.

North American Session

It’s a pretty empty calendar for the USD except for FED Chair Powell speaking.

He is due to deliver a speech titled “Monetary Policy Influences on Global Financial Conditions and International Capital Flows” at the High-Level Conference on the International Monetary System, hosted jointly by the Swiss National Bank and International Monetary Fund, in Zurich.

Audience questions are expected and that’s where a potential comment may come from. Otherwise, chill out and enjoy your day as we have a few busy days coming for the USD.

Technical Set Up – What’s Happening with the Majors

Today’s Fundamental Drivers

Plan the Trade, Trade the Plan!

The idea of our “Market Insight” is to give you some guidance with your daily preparation.

Your Daily Analysis needs to become habitual – For full guidance on our daily routine click here.

Make sure you don’t waste unnecessary time in front of the screens.

Remember you need to be fresh, confident and ready to trade and by sitting aimlessly in front of your screens you will become stale and uncertain.

The key to your success: Isolate the opportunities that work for you and focus on them.

Don’t worry about things that you can’t make…..chasing them will only cause problems (tiredness & irrational behavior will take over).

Tune up your charts & get ready to trade…..see you in the 247 Trade Zone!

Brad