Today’s focus turns to US data releases
We’ve seen it half a dozen times now; Trump throws up extreme actions (via Twitter) to stir the cauldron and then slowly backs down from his ridiculous comments the following 24-36 hours.
The Syria tensions are going the same way as the North Korean nukes issue and the same way as the proposed tariffs on China.
U.S. President Donald Trump warned on Wednesday of imminent military action in Syria over a suspected poison gas attack. On Thursday, he amended that warning, saying a military strike “could be very soon or not so soon at all.”
Talk about the boy who cried wolf!!
Anyway back to the majors. The USD Index has consolidated around 89.50 and made a charge during the day towards 90.00 as Risk-On appetite returned to the markets. Although that rally was short and sweet it does set us up for a potential break higher in the USD & will have the market second-guessing a USD sell-off.
Most of the majors are trading sideways whilst EURGBP nosedived around 70 points. It was the lowest the pair has been since June 2017 and occurred after the release of the ECB Meeting Accounts.
It looks like Europe and the UK are on different interest rate cycles and the interest rate differential alone is enough to drive EURGBP lower. There were new rumblings around M& A activity plus Brexit as well & that’s just going to make the trading opportunity cloudy.
There isn’t a hell of a lot of economic data releases to close the week out and with geopolitics dominating, I’m more than likely going to give the market the wide berth it deserves right now.
If you check the calendar for next week you’ll see it has a lot more structure and shape and that should provide a lot more trading opportunities.
With Risk-on appetite feeding the market the pressure will be on the topside for USDJPY & JPY crosses.
Chinese Trade Balance will be the major focus for AUD & NZD traders, although I’m not even certain what time it is going to be released.
All in all, I don’t expect a hell of a lot of trading opportunities.
Geopolitics and M& A’s …very hard to trade around with any confidence.
We do have the German CPI data but that’s more than likely going to be overlooked by the ongoing geopolitical issues floating about.
North American Session
As far as data goes we do have the University of Michigan Preliminary Sentiment data due but that will no doubt be overlooked by the Trumpinator.
We have FED officials Bullard & Kaplan delivering speeches, so they are our two major risk events.
Outside of that, the smart idea is to watch US equities for ‘flow/direction’. It’s been a pretty rubbish week as the natural flow of the majors has been zapped by geopolitical events.
Hang in there, as we’ve got a week full of potential coming up!
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.
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).