20/05/2014: Weekly Trading Notes
- Equity markets failed at the key breakouts and are now under corrective pressure
- Safe haven bonds (Treasurys and Bunds) continue to be bought by investors suggesting concern over equities
- Dollar Index is showing signs of pushing higher again; ECB is apparently preparing a package of easing measures
- Euro remains under pressure around $1.3700
- Key support at $1.3647
- 144 day moving average is the basis of support c. $1.3700.
- This is a key moment for the Euro – if it breaks decisively under the 144 day ma this would signal a medium/longer term shift towards bearish.
- A two day close below $1.3670 confirms a large top pattern (which would imply $1.3375)
- Watch for the flash Eurozone PMIs on Thursday!
- Stronger UK inflation should have pulled Cable significantly higher but has not really done so.
- A 2 week top pattern continues to imply $1.6660 which coincides with the 89 day moving average on the daily chart which has supported the big corrections in recent months.
- Neckline resistance at $1.6840 with $1.6774 and $1.6903 also key highs.
- Watch for BoE and FOMC meeting minutes tomorrow!
- Flight into safe havens is pulling the rate lower.
- Consistent pressure on 101.30 has broken and 100.74 the key February low is now open
- 102 being a pivot level remains a resistance and selling into rallies is the way to play.
- Watch for BoJ overnight!
- Looking corrective now, but Wall Street still seems to be stronger than Europe
- S&P 500 has broadly traded sideways in past month – small cap stocks are still badly underperforming.
- FTSE 100 brief 14 year high at 6895 but now the correction is gathering pace – next support 6767
- DAX has been better supported than FTSE in recent days – needs to hold support around 9367
- Incredibly uncertain, converging trend lines.
- Support band $1275/$1280.
- Resistance band $1300/$1305.
- Very slight bearish bias on technical indicators but nothing major.
- Still susceptible to Ukraine news.
Watch out for:
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
Monday 26th May
Tuesday 27th May
- US – Durable Goods Orders
- US – Consumer Confidence
Thursday 29th May
- Bank Holiday – Germany, France, Switzerland
- US – Gross Domestic Product (Preliminary/2nd reading)
- US – Pending Home Sales
Friday 30th May
- Canada – GDP
- US – University of Michigan Sentiment (revision)