13/05/2014: Weekly Trading Notes
- Equity markets straining to breakout. Driven by M&A positivity rather than strength of earnings season. Will we seem profit taking up at these levels again on FTSE?
- Dollar rallying again, driven by the market’s expectation of ECB action next month. Key breakouts near term on EUR/USD, GBPUSD. Dollar/Yen breaking lower opens for a test of the bottom of the 3 month support band
- Gold still moves on geopolitical tensions in Ukraine
- UK Quarterly Inflation report could impact sterling hugely
- After consolidation yesterday more pressure today on the Euro
- Now back to the key support area $1.3680/$1.3700
- 144 day moving average is the basis of support at $1.3700.
- Even the Bundesbank has now stated that it is open for action: rate cut, negative deposit rates or even purchases of asset backed securities
- Second reading of Eurozone inflation on Thursday plus GDP!!
- Corrected back into the important near term support band $1.6800/$1.6840
- But the intraday chart shows a two week top pattern formed which would confirm on a move below $1.6800.
- Selling pressure driven by dollar strength
- But UK inflation report could indicate the need for rate tightening sooner than the guided Q2 2015 if growth and inflation targets are increased – also look for spare capacity reducing.
- Support band around 102 now.
- Still is the classic reflection of trading sentiment.
- Also yen strengthens on increased geopolitical tensions.
- Japanese GDP on Thursday could impact
- Look strong – not apparently impacted by geopolitics as Wall Street moves into new high ground
- S&P at a closing all-time high again – but what happens when earnings season comes to an end, however the gains have been driven largely by M&A.
- FTSE 100 brief peak above 6876, but will the urge to take profits result in a loss of momentum?
- DAX was 10 points off its all-time high today of 9794
- Incredibly uncertain moves.
- Support band $1275/$1280.
- Resistance band $1300/$1305.
- Still spiking around on Ukraine news.
Watch out for:
Wednesday 14th May
- UK – Unemployment and Quarterly Inflation report
Thursday 15th May
- Japan – GDP
- Germany – GDP
- Eurozone – CPI for April (2nd reading)
- Eurozone – GDP
- US – CPI
Tuesday 20th May
- Australia – RBA meeting minutes
- UK – CPI
Wednesday 21st May
- Japan – Monetary policy & press conference
- UK – BoE meeting minutes
- UK – Retail Sales
- US – FOMC meeting minutes
Thursday 22nd May
- China – Flash manufacturing PMI
- Eurozone – Flash manufacturing PMIs
- European Parliamentary Elections (Thursday and Friday)
- UK – GDP 2nd reading
- US – Existing Home Sales
Friday 23rd May
- Eurozone – German Ifo
- Canada – CPI
- US – New Home Sales