Recap last week.
It was a rather dull week all in all with EURUSD threatening to break out here, there and everywhere. After trying it failed miserably. The Average Trading Range for the week was a tiny 117 ticks and even when US GDP and Durables missed expectation USD recovered all too quickly. USDJPY went to a low of 114.75 but recovered back above 115.10 as the figures came out then EURUSD reached the 100hma at 1.0723 then promptly gave it all back.
2 things come to mind. Either we are in the midst of a resilient USD or the market is unsure of itself. I go for the latter. Before trading I always ask myself the following question: What is the market focused on? In last week’s case it wasn’t focused on anything. As previously mentioned the average range for the week was 117 ticks. It hasn’t been this low for 2 years. Which in itself is a good thing. Because this week’s edition will primarily be focused on EURUSD.
- EURUSD: 1.0700/20 is the line in the sand. Bullish above, bearish below. I’m slightly inclined to play from the short side because the North American session closed below 100HMA at 1.0720 and the 200HMA at 1.0700 Also let us not forget the mighty 100DMA looms large at 1.0826. With big moving averages i always look to see if it was respected the previous test. The answer to that is YES – and in this case it was at the end of October 2016
- EURUSD: The market is unsure if itself and as a result non-trending. Non-trending markets always turn into trending so look for a break and run with it.
- FOMC Wednesday (no projections or presser) and NFP Friday will be in focus.
- Trumps executive orders could get out of hand. News over the weekend highlighting protests may be the start of a bigger backlash. RISK OFF may ensure
- CABLE: All eyes on Super Thursday and 1.2515 is the key level for bulls to stay above. It gave some robust defending last week but couldn’t add and extend. Again the market is unsure. 1.2770 is big so sell up there no matter what. Unless BREXIT is delayed.
- Key market themes this week: US data, Trumps Executive Orders, Trumps tweets in general, BOE on Super Thursday