RECAP LAST WEEK
Apologies for the no-show last week. I was shattered doing algebra.
USD got hit as from Tuesday and then on Friday we saw some proper re-pricing into the now-not-so-certain June hike. NFP was a miss but it was how the USD reacted at The NA close which made me rethink June. EURUSD didn’t need much encouragement all week and we ended near the yearly highs at 1.1280, USDJPY was OFF and now approaches a key level 110.10 Both NZDUSD and AUDUSD rallied against the run of play to reverse their weekly losses – almost.
However, the most revealing price reaction post NFP was CABLE as it clearly had its own ideas. It chopped around and couldn’t break the topside level at the 1.29 big fig. This is significant going into UK Services PMI on Monday. Be aware. When I wake up every morning I ask myself three questions: What is the market focused on? What is trying to do, and how well is it doing it? If CABLE can’t rally on weak US data then an idea would be fade into any strength. The market brushed aside a bad NFP and is looking squarely at polls into The Election. The truly awful events on Saturday night may actually lift CABLE if it assumed Theresa May delivered a robust speech highlighting her plans to fight terrorists on Sunday. She did this with much aplomb in my humble opinion.
- The UK Election, Services PMI, ECB presser, US ISM Non-Manu PMI
- UK Polls in focus so CABLE will be a jumpy cat. If it lifts in Asia look to get long but I still like selling into 1.30 big fig and more at 1.3050. Look at buying 1.2775 again but polls will dictate.
- EURGBP I like selling .8750/65 and more at .8786 which is BIG
- USDJPY 110.10 still formidable and 111.60/70 firm but I favour selling rallies. Data dependent of course.
- I love this. It’s part of the rise in AI from Tudor Jones and his latest comment “no man is better than a machine, and no machine is better than a man with a machine”
- More ECB Taper talk into Thursday so watch out. 1.1430/60 is so big it hurts. SELL no matter what.
Another short one but hope it bags some ticks.
Enjoy and discuss
Patrick and Adam