22/04/2014: Weekly trading notes

KEY MARKET DRIVERS

  • M&A deals and positive catch up from public holidays driving equity markets higher. Earnings season – Big questions still being asked of market valuation. Will there be a “Sell in May and go away” this year?
  • Dollar rally running out of steam? Traders comes back after Easter with renewed selling of the dollar. Dollar index failing around 80 key resistance. Dollar/Yen recovery hitting the buffers today. Poor dollar performance versus all majors today.
  • Huge week next week, US GDP, FOMC, Payrolls
  • Political tensions in Ukraine are not going away, prospect of further sanctions against Russia

 

EUR/USD

  • Near term key resistances $1.3827/$1.3865
  • Breaching ends the recent Dollar recovery.
  • Flash Eurozone inflation next week!!

GBP/USD

  • Driven by strong UK data.
  • But, the breach of $1.6822 is yet to be confirmed.
  • $1.6841 is resistance – tested today but held.

USD/JPY

  • Recovery off key March low at 101.17
  • 6 straight higher lows, support at 102.34 is key near term.
  • Also watch the 89 hour moving average which is also now acting as the basis of support (currently 102.42).
  • Don’t forget 102.83 on the upside which has been a consistent pivot level in the past few months

Indices

Key near term levels now being eyed on indices:

  • FTSE 100 testing 6706
  • DAX at 9581
  • S&P at 1872

Gold

  • Retreating back below $1300 is not a good sign again and this is now a near term ceiling once more.
  • Needs to hold above the key low around $1277

 

WATCH FOR THIS WEEK:

Wed 23rd April

  • Australia – CPI
  • China – Flash HSBC PMI
  • UK – BoE meeting minutes
  • US – New Home Sales
  • New Zealand – RBNZ rates

Thursday 24th April

  • Germany – Ifo business Climate
  • US – Durable Goods

Friday 25th April

  • Japan – CPI
  • UK – Retail Sales

 

NEXT WEEK

Monday 28th April

  • US – Pending Home Sales

Tuesday 29th April

  • UK – GDP Preliminary (1st reading)
  • US – Consumer Confidence

Wednesday 30th April

  • Japan – BoJ rates
  • Eurozone – CPI flash estimate for April
  • US – GDP Advance (1st reading)
  • US – FOMC rates

Thursday 1st May

  • Manufacturing PMIs – all

Friday 2nd May

  • US – Non-farm Payrolls
  • US – Unemployment

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