Thanks to everyone who came along to this morning's webinar where David & I wanted to take a close look at eurodollar as we know so many traders prefer this pair. Just prior to the London open, the pair had been trading in a relatively narrow range, before finally pushing through the high of the session at 1.0646, but it was a slow and tortuous process as there was no consisency of buying or selling in the euro complex.
This morning's trade to the long side was an excellent example of having to sit through a grind higher, before some momentum finally arrived & took the pair to a high of 1.0670 from where it has been drifting lower.
In these market conditions, it helps to have a low value renko chart - ours was set at 1.5 pips. This helps to keep us in the trade and works really well when price action is restrained and there is little momentum.
Today, of course we have the ECB and Mario Draghi, so perhaps it is no surprise to see the pair so moribund. But when trading this pair we do need to consider the option expiries and the order boards to identify those levels where price may struggle.
We will be revisiting the pair in this afternoon's webinar (at 1.45 pm London time) to see what effect the interest rate decision, and press conference have had on the price action. Hope you can come along. ... See MoreSee Less
Chronic USD weakness & some clarity from Teresa May has seen cable post a volatility candle on the daily chart, but once candle closes price may retreat to within the spread of the candle. Price action has also resulted in the pair beginning to move off the bottom of our currency heatmap. GBPNZD & GBPAUD still anchored to the bottom primarily because Kiwi and Aussie are also strong.
A degree of uncertainity about Brexit has now been removed, which markets always respond well too. Doesn't mean it's all lollipops and roses from here on, because of the constitutional issues involved & whenever these are now raised expect market to indulge in some volatility and opportunities to take out traders. ... See MoreSee Less
Whatever Teresa May says today markets will be volatile and deliver a knee jerk reaction, but if she delivers clarify of intent, everyone will just move on and markets adjust accordingly. Commentators are always bleating about uncertainity, but once removed will probably find something else to bleat about. ... See MoreSee Less
USD taking a bit of beating with big moves across the majors, with comm dollars doing well, and even cable taking out yesterday's gap. One beneficiary is gold which is up almost $20.
Today's news highlights include Teresa May's speech just before midday & we have US Tres Sec Lew also speaking later this afternoon.
From a technical perspective USD is now very oversold on hourly CSI, but also moving lower on the 4hr, and is also bearish on the daily & weekly. Not a lot of love for the USD at present, and any pullbacks higher are likely to be shallow and short lived.
USD index on monthly chart shows extent of USD's pullback, but USD performance has to be seen in context of regime change in Washington so current wobble may simply be reflecting this event. ... See MoreSee Less