RECAP LAST WEEK – FOCUS ON USD
It all started with EURUSD last Tuesday and “nothing hawkish” comments from Draghi. Despite throwing cold water on buyers the day after we are now still at a key level – 1.1450. Cable came to the party a little later and is toying with 1.3050 These are key levels for USD bargain hunters. If they show up, and I think they will again this coming week expect these areas to be sticky. If Asia breaks USD capitulation will be likely near to a big fig on both majors. On that note a few large mean-reversion quants are buying USD as we are now at the very edge of a key value area. If you have Market Delta/profile it makes sense to take a look.
USDJPY key area is 111.80 and a perfect platform for more buyers. 112.90 failed but if 113.00 breaks and holds I see 114.30 on the radar. This runs against a broad weak USD but risk plays and month end dictated last week in my humble opinion.
USCAD broke a key level at 1.30 big fig and also got resold on the retest. Looking very bearish now as 1.30 stands firm. Oil closed at 46.30 and is on a tear. Look for this to continue I guess.
NZD and AUD firm – but all big gifts from USD rather than fundamentals
- US/UK PMI’s, NFP and Carny on the lectern
- The US has a last hope of overlooking weak soft data and now CPI – with a stonking NFP. If this disappoints it’s last chance saloon but the bar has closed. And you can forget a recent good GDP to calm the bears.
- OIL is the measure that raise all tides. Inventories on the radar after >2 buck rally on Friday.
- Steve Cohen still hiring in London. But this time it’s youngsters. Maybe that’s where the talent lies now ? I know Brevan Howard might agree. 😉
That’s it folks. Catch Patrick Reid on Linked in – normal rules apply. Send it comments as I like to be told I’m wrong 😉
Trade safe and be lucky
Patrick and Adam