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17/06/2014: Weekly Trading Notes


KEY DRIVERS

  • Iraq tensions have weighed recently but markets starting to look past it perhaps.
  • Dollar Index back into the pivot range 80.4/80.6 but this should be a chance to buy – equates to the resistance band $1.3585/$1.3670 on Euro/Dollar.
  • Indices are showing signs of support again after the minor correction.
  • Gold has failed around the resistance band $1278 around the 144 day moving average
  • Focus on the Fed this week with the FOMC decision Wednesday, expect a further taper by $10bn but question of whether Yellen gives a hawkish leaning – will higher US inflation and the increased capacity utilisation yesterday put pressure on the Fed?

 

EUR/USD

  • Support around $1.3500 remains intact but the ceiling of resistance that starts around $1.3585 is aping the gains.
  • A lack to any real recovery signals on momentum suggests this is just another chance to sell.
  • Selling rallies into $1.3580/$1.3670 resistance band
  • Expect a retest of $1.3500 before $1.3475

GBP/USD

  • Lower UK inflation and higher US inflation (plus improved capacity utilisation for the US) could put downside pressure on Cable now in the run up to the Fed.
  • There is support band $1.6880/$1.6920
  • $1.7000 remains a big barrier with no clean break through yet.

USD/JPY

  • Abe looking to push through “Third Arrow” reform – also dovish leanings in monetary policy update last week.
  • The rate was looking fairly neutral again but is now pushing above the 102.00 pivot level again.
  • There is a sizeable resistance area 102.20/102.40 that needs to be overcome for the dollar bulls to claim control.

Indices

Equity indices have corrected as VIX volatility has jumped, but support is beginning to form once more.

  • S&P 500 forming support around 1926 – chance to buy?
  • DAX forming support above 9810.
  • FTSE is lagging still and breaching support at 6782 completed a top pattern implying 100 points downside.

Gold

  • Rallies as concern over Iraq increased.
  • But technical overhead supply around $1278 and the 144 day ma has capped the recovery which is falling away again – chance to sell?
  • Support for the US dollar could also pull gold lower.
  • Expect a retest of $1231 in due course

 

WATCH OUT FOR

Wednesday 18th June

  • UK – Bank of England Meeting Minutes
  • US – FOMC monetary policy PLUS press conference
  • New Zealand – GDP

Thursday 19th June

  • Switzerland – SNB monetary policy
  • UK – Retail Sales

Friday 20th June

  • Canada – CPI

 

NEXT WEEK

Monday 23rd June

  • China – Flash Manufacturing PMI
  • Eurozone – Flash Manufacturing PMIs
  • US – Existing Home Sales

Tuesday 24th June

  • Eurozone – German Ifo Business Climate
  • UK – Inflation Report hearings
  • US – Consumer Confidence
  • US – New Home Sales

Wednesday 25th June

  • US – Durable Goods

Thursday 26th June

  • US – Weekly Jobless Claims

Friday 27th June

  • Eurozone – German 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.