The Week Ahead 15th May

The general theme was broad USD strength with EURUSD and CABLE giving back many of their recent gains. The only fly in the ointment was US CPI and Retail Sales on Friday at a touch softer. This on it’s own is not going to effect the FFF at currently 95% for a June hike but a few questions may be asked if it gets a turn for the worse datawise. Remember The FED is currently behind the curve so a couple of misses in the US could mean EURUSD reaching 1.11 – be aware.

In Europe Der Spegiel news paper from Germany cited taper talk in July near to London close which help lift an already firm EURUSD to session highs at 1.0930 We were looking to buy at 1.0900 but it didn’t get there and 1.0915 held – which is the 200HMA

Staying above 1.0900 is very bullish but expect profit taking near our old friend 1.0950

The longer CABLE stays below 1.2900 the better for bears. In fact it’s looking toppy but 1.2850 is now quite formidable for buyers. If this breaks look out for massive buyers at 1.2775. UK CPI on Tuesday should help this pair find a direction.

USDJPY eventually lost ground as JPY RISK OFF buying followed US 10 year yields lower. We are toying with 113.00 which is big and if that breaks it could get ugly – real quick.

USDCAD was chopping between 1.3640 and 1.3770. Both 100hma and 200hma have converged with price which means a break is imminent. When both MA’s join price I like to call it three’s a crowd. Imagine you’re taking out a date and your mate turns up – it’s not great so somebody has to leave. Price should do that next week so go with the break.

NEXT WEEK

  • UK CPI, UK Earnings, and Retail Sales, German ZEW, AUD employment and Canadian CPI/Retail Sales
  • EURUSD strength to continue post Taper talk and US data softening? Levels to watch 0900, 1.0950 1.1000
  • Has a CABLE TOP been confirmed? Not quite but 2900/20 is the line in the sand. If we get there sell into 1.30 anyway. 1.2850 the break lower but buy at 1.2775 because it’s very big.
  • NZDUSD trying to find a bottom but .6880/90 is the scalp that’s needed for more upside.
  • AUDUSD looking to calm down if China and Iron Ore prices do. Then technical will be in play.

That’s it folks but trade safe and catch a lesser spotted Patrick on Linked in for more comments and market news. See charts below.

 

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Patrick and Adam

 

About Patrick Reid

Patrick Reid has written 23 post in this blog.

Patrick Reid is a veteran FX Trader and Analyst. He also has inroads to BBC News and has a great knowledge of Geopolitical landscape

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