What Happened Yesterday
So much for ‘Triple Threat Thursday’…. you always knew as soon as the media outlets starting painting yesterdays trading day as ‘Armageddon’ that it could possibly end in a fizzer.
Well not entirely as we do have the UK election result to come.
The good thing is the ECB is out of the way as is Comey’s testimony.
The Euro fell after the ECB cut its forecasts for inflation and said policymakers had not discussed scaling back the bank’s massive bond-buying program.
This had been telegraphed to the market on Wednesday so the impact was minimal. But I’m a little surprised the Euro isn’t 100 points lower as it’s a complete turn around from the ECB.
It’s a bit like the boy who cried wolf. The ECB have been promising and promising…. and EUR rallied aggressively on the promises… and then they ditch the plan.
I would have thought 1.0800 is back on the cards at least. It does go someway to show you how weak the USD is at the moment behind the scene.
This hardly deserves a mention. He Accused President Donald Trump of firing him to try to undermine the bureau’s investigation into possible collusion between Trump’s 2016 presidential campaign team and Russia, but did not say whether he thought the president sought to obstruct justice.
So who cares…. Donald survives…move on.
UK Election results are expected to start trickling in around 8am AEST.
What’s Happening with the Majors
Have pretty much paused as we await the UK election outcome.
EUR had it’s little spit to the downside but has consolidated around 1.1220 for now. I’d say it hasn’t moved much as there is a lot of cash tied up in EURGBP and a negative outcome from the election will see EUR rally against GBP and that will probably see EURUSD hold it’s ground.
All the other major currencies are trading pretty much where they were 24 hours ago.
The beast had a perfect retracement to 110.40….. damn those extra geopolitical events as that would have been the perfect level to get short again.
This table provides a pretty good assessment of what is expected to happen to GBP with various outcomes.
Since most of the currencies are pretty stable I think we may have a few potential opportunities today on the election result… but it needs to be a convincing win or defeat for the Conservatives.
Anything close will be un-tradable as Sterling will just jump up and down…but probably with a negative bias.
Most of the action will take place on the Sterling Crosses….and in particular on EURGBP as that’s where the implications for the election are….. with Brexit.
I’m predicating an easy victory for the Conservatives and a steady GBPUSD.
EURGBP and GBPYEN look like the two best crosses to trade…. well they make most sense anyway.
The Next Best Trade
Not much on the cards with all the events. We had bit of a flutter on the Aussie Trade balance yesterday but that;s about it.
I’ve been waiting for Thursday to get out of the way so we can get short USDYEN again…. but i fear we may have missed the ideal level.’
There’s still a lot of risk surrounding the UK election so we’ll be on the sidelines until that subsides.
Important Note: We’ll be updating the ‘Next Best Trade’ when the opportunity arises.
Pro Members keep an eye on the NBT List and we’ll also endeavour to get an email out to you with any updates.
I do not expect any NBT trades today.
What to Expect from the Market Today – Friday 9 June
There’s a couple of potential market moves here. The Chinese CPI could be interesting and the Aust Home loans data has proven a target for traders in the past.
If you’re sitting around watching the UK election results come in take a look. Otherwise I wouldn’t bother.
Forget about the data impacting as the market will be assessing the UK election result. The currencies could be wild with the outcome or extremely calm… we just have to wait and see.
North American Session:
The CAD employment data are a good release to finish the week. It’s a bit rock and roll but if the results come out in line with current momentum then we sure as hell have an opportunity on our hands.
That’s all she wrote folks.
We sit tight and wait for the UK election results…. as I mentioned focus your attention on GBP and GBP crosses.
Tune up your charts and get ready to trade, See you in the Live Trade Zone.