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06/05/2014: Weekly Trading Notes


KEY DRIVERS

  • US earnings season a bit tepid – Failing to drive S&P forward. Still questions over whether there will be a “Sell in May and go away?” Markets have been driven by M&A more so.
  • Dollar under serious pressure – Dollar Index at an 8 month low. Key breakouts near term on EUR/USD, GBP/USD. Dollar/Yen breaking lower opens for a test of the bottom of the 3 month support band
  • Yellen and Draghi take centre stage
  • Political tensions in Ukraine are not going away, prospect of further sanctions against Russia

EUR/USD

  • Test of key high at $1.3967 is now on.
  • Yellen talks first, Slow and steady taper?
  • What will Draghi do to talk down the Euro this month? Further talk about QE is likely.
  • Second reading of Eurozone inflation next week plus GDP!!

GBP/USD

  • Highest since August 2009.
  • Driven by strong UK data.
  • Upgrade of OECD to UK GDP, downgrade to US
  • Overbought near term could lead to consolidation or a correction back towards $1.6900.

USD/JPY

  • Key low at 101.84 broken
  • Bottom of the 3 month range now being tested
  • 144 day moving average (a very decent gauge of support at 102.09) has been broken.
  • Next key low at 101.31 then the Feb low at 100.74

Indices

  • Key near term levels now being eyed on indices
  • FTSE 100 targeting the highs again at 6867, but will the urge to take profits result in a loss of momentum?
  • DAX ranging between 9367/9645
  • S&P at less than 1% off its all-time high again – but earnings season has failed to really give it much rocket fuel so far.

Gold

  • Has spiked on the Ukraine news.
  • Back above $1300 which is a near term gauge for bullish/bearish position
  • Can it now stay there?

WATCH OUT FOR

Wednesday 7th May

  • Japan – BoJ meeting minutes
  • US – Janet Yellen testifies to the Joint Economic Committee

Thursday 8th May

  • Australia – unemployment
  • China – trade balance
  • UK – BoE rates
  • ECB – rates and Draghi press conference
  • US – Weekly Jobless Claims
  • Friday 9th May
  • China – CPI

NEXT WEEK

Tuesday 13th May

  • China – Retail Sales and Industrial Production
  • Germany – ZEW survey

Wednesday 14th May

  • UK – Unemployment and Quarterly Inflation report

Thursday 15th May

  • Japan – GDP
  • Germany – GDP
  • Eurozone – CPI for April and GDP
  • US – CPI

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At Hantec Markets Ltd we provide an execution only service. Any opinions expressed by analyst Richard Perry should not be construed as investment advice or an investment recommendation. This report does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. Forex and CFDs are leveraged products which can result in losses greater than your initial deposit. Therefore you should only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved, seeking independent advice if necessary prior to entering into such transactions.