Vantage FX Daily Market Update

[Vantage FX]

Retail Sales Headache:
US retail sales missed expectations for September, further raising doubts that the Fed will have the fundamentals behind them to raise interest rates this calendar year. If you’re clinging onto the thin possibility that the jackpot USD long trade is still in play, this is just yet another reason to reconsider your stance.

“USD Core Retail Sales m/m (-0.3% v -0.1% expected)”

“USD Retail Sales m/m (0.1% v 0.2% expected)”

The August revision was also to the downside, from an initial 0.2% to an even 0.0%.

If you are still looking for a positive spin on the numbers, discretionary spending was it. In other words, people are still buying cars and going out to dinner. This points to the possibility that domestic demand is still strong enough to provide some sort of cushion to the storm of bad news that everyone else is looking at.

A storm that includes slowing global growth and lower commodity prices putting a lid on spending across the majorly contributing US energy sector. We’ll need to see a significant shift in the trend of recent data releases to change the Fed’s course.

Markets have now priced the expectation of a Fed rate hike in the coming months at the following levels:

October: 6%
December: 30.4%
January: 38.8%
Mar: 52.3%

USD/JPY 4 Hourly:

Click on chart to see a larger view.

The Dollar move was shown nicely on the USD/JPY short trade we’ve been watching. With the BoJ leaving rates unchanged and QE expectations staying on course, both the USD and JPY fundamentals are lining up to make sure that the trend line resistance level in play continues to hold.

Find the path of least resistance and follow it.

———

On the Calendar Thursday:
AUD Employment Change
AUD Unemployment Rate

USD CPI m/m
USD Core CPI m/m
USD Unemployment Claims
USD Philly Fed Manufacturing Index

———-

Chart of the Day:
Elsewhere, the UK unemployment rate hit its lowest level for more than 5 years last night, beating expectation and giving the Pound a kick.

“GBP Unemployment Rate (5.4% v 5.5% expected)”

The 5.4% print was the lowest jobless rate seen since as far back as 2008. Being a pre-GFC reading, the fact that unemployment is now again below that level is hugely significant in terms of recovery in the eyes of the Bank of England who are still looking at their next interest rate move being up.

GBP/USD Daily:

Click on chart to see a larger view.

First of all taking a look at the Cable daily chart, we can see that price has consolidated into a sideways range after breaking out of its bearish trend back in May. I really like this chart because of how clearly defined the range is, as well as the levels that price is using to step between.

GBP/USD 4 Hourly:

Click on chart to see a larger view.

Now zooming into the 4 hourly chart, we most obviously find price sitting at short term trend line resistance, but also coming into a previously tested horizontal support/resistance zone. Just remember the path of least resistance.

Do you see opportunity trading Cable?

 

[Vantage FX]

Balloon Crew:
With a 0.2% rise in September core US consumer prices, hope has been given that inflation is at least moving in the right direction toward the Fed’s 2% target.

“USD CPI m/m (-0.2% v -0.2% expected)”

“USD Core CPI m/m (0.2% v 0.1% expected)”

Low inflation has been a persistent headache for the Federal Reserve with a constant print below the much talked about 2% target. Alongside the always important employment readings, inflation has become the other major hurdle for the Fed to jump to begin ‘interest rate normalisation’ as they like to put it.

Either way, this reading is being seen to give the Fed at least 1 positive among a sea of recent negatives and the USD finally had its rot halted overnight.

EUR/USD Hourly:

Click on chart to see a larger view.

On the EUR/USD hourly above, we can see that 2 weeks of gains were halted on the CPI number. Price still has only pulled back to the shown short term trend line though, so be mindful that one last squeeze back to highs could be on again.

AUD/USD Hourly:

Click on chart to see a larger view.

Commodity currencies on the other hand managed to buck the trend with the Aussie’s short positioning post employment data earlier causing traders to take profit and therefore rip higher.

———

On the Calendar Friday:

“Bank of Japan governor Haruhiko Kuroda Due to speak at the annual meeting of credit cooperatives, in Tokyo.”

NZD CPI q/q (0.3% v 0.2% expected)

JPY BOJ Gov Kuroda Speaks

CAD Manufacturing Sales m/m
USD Prelim UoM Consumer Sentiment

———-

Chart of the Day:
After printing 9 days without a single bearish candle and going on the pair’s longest bullish streak in 4 years, it all seems to have come undone for USD/CAD.

USD/CAD Daily:

Click on chart to see a larger view.

Price on the Loonie has now pulled back to re-test previous resistance now as possible support. It’s a very clean level and if momentum stalls, could offer a chance to fade against it.

Do you see opportunity trading the Canadian Dollar?

 

[Vantage FX]

BoJ Happy:
Welcome back to your desks for the start of another important week in the trading world which features central bank action from Australia, Canada and the Eurozone.

But first of all, we turn the clocks back to Friday afternoon where Japan’s finance minister Tarō Asō, cited a surplus of money in the economy combined with weak domestic demand in his comments to public broadcaster NHK, re-assuring markets that the BoJ is unlikely to expand it’s QE program in the near term.

“At this point, the government is not thinking about anything like that, and probably the Bank of Japan will not undertake additional monetary easing right now.”

With the BoJ unchanged at their most recent meeting a week before last, these comments are a healthy reminder and are intended to have the effect of keeping markets stable and on their current course. An outcome that benefits the technical traders nicely.

USD/JPY 4 Hourly:

Click on chart to see a larger view.

This ‘triangle’ has been in play for what feels like forever now, with the constant sideways drift causing the bottom line to shift each time the chart is posted.

As I’ve said before, because we’ve drifted so far like this, the pair is prone to fake-outs and I see the safer option being to fade the edges rather than play for the immediate breakout. Either way, it’s a line that will help the day traders manage their risk around on the possible re-test.

Data Deluge:
Elsewhere across Asia, we have quite the deluge of Chinese data to kick off our Monday morning. With Chinese woes the in vogue topic when it comes to central banks around the world putting monetary policy normalisation on hold, today’s Industrial Production and Fixed Asset Investment will gain added attention.

The data will also see the Aussie come into play today with the hourly chart catching my eye for the following level.

AUD/USD Hourly:

Click on chart to see a larger view.

As long as AUD/USD stays tucked back above the weekly trend line then I favour playing from the long side. This hourly zone looks a nice little confluence of support where buyers will surely be lurking.

———

On the Calendar Monday:
Quite the deluge of Chinese data to kick off our Monday morning.

CNY GDP q/y
CNY Industrial Production y/y
CNY Fixed Asset Investment ytd/y
CNY Retail Sales y/y
CNY NBS Press Conference

USD FOMC Member Brainard Speaks

———-

Chart of the Day:
With all the Forex action lately, Gold Trading hasn’t been given the attention it deserves. Today’s chart of the day takes a look at XAU/USD.

Gold Weekly:

Click on chart to see a larger view.

The Gold weekly chart sees price still buzzing around the major support/resistance zone between 1156 and 1208. With the Fed pushing back interest rate hikes, the break below this major level couldn’t be sustained and we’ve rallied back up to re-test the zone this time as possible resistance.

Gold Daily:

Click on chart to see a larger view.

Zooming into the daily chart, we see a few short term channels and triangles being broken and respected. The short term bullish channel is still in play, with price pushing towards the upper line and coinciding with the marked horizontal level where price reacted before.

I don’t want to fight this new found bullish momentum and am looking to play from the long side on pullbacks while price is above 1156. Just keep in mind the possible re-test of the weekly support/resistance zone.

Do you see opportunity in Trading the Asian Session?

 

[Vantage FX]

RBA Minutes – As You Were:
A little later than normal for today’s Daily Market Update, but with the already old news that is the RBA Meeting Minutes coming mid morning, a recap is probably more useful than a preview anyway.

Casting our memories back to the 1st Tuesday of the month, we remember that the RBA held the cash rate steady at 2%. This was the 5th month in a row that the RBA sat on their hands and with a lack of any dovish guidance alongside the decision, the Aussie dollar got a much needed injection on the buy side.

Today’s minutes from the October meeting gave us nothing to expect anything different anytime soon, with a lack of guidance or a good old fashioned ‘jawboning’ highlighting the RBA’s neutral stance.

The @LiveSquawk Twitter account is excellent in terms of real time news analysis, and well worth a follow to compliment your trading. Here is their summary of the minutes:

“RBA Mins: Overall growth expected to have strengthened In Q3 – Spare capacity in economy, domestic cost pressures low.”

“RBA: Economy’s rebalancing increasingly supported by A$ fall – More evidence of economy rebalancing toward non-mining.”

“RBA: Labour market strengthened More than Expected – Recent Data Raising Concern Over China & East Asia, Weighing On Aus Exports.”

The full Minutes of the Monetary Policy Meeting of the Reserve Bank Board can be found here.

AUD/USD Hourly:

Click on chart to see a larger view.

As you can see earlier in the month, the actual interest rate decision gave the Aussie a nice little kick after what was perceived as a ‘less dovish than expected’ RBA.

Interestingly, today’s minutes coincided with price sitting right on the confluence of support that we were watching yesterday. With the minutes not giving the market anything new to sink their teeth into, the technical level once again gave an opportunity for buyers to enter the market.

For me, the path of least resistance is still clearly to the upside. I have a feeling that we could be looking back at this level in a few weeks time and wondering how we were pedantically debating whether the area provided value. I look forward to hearing your views on the @VantageFX Twitter!

———

On the Calendar Tuesday:
AUD Monetary Policy Meeting Minutes

GBP BOE Gov Carney Speaks

USD Building Permits
USD FOMC Member Dudley Speaks
USD FOMC Member Powell Speaks

———-

Chart of the Day:
With the Aussie and Kiwi so often moving hand in hand, after yesterday’s AUD/USD chart in the Daily Market Update, we today take a look at NZD/USD.

NZD/USD Hourly:

Click on chart to see a larger view.

It’s the same story across the Tasman, with price bouncing after a long and sustained down trend. It is this short term bounce that has given us the above hourly trend line.

This Kiwi chart has given you opportunity after opportunity to buy each trend line re-test, with confirmation being the broken short term flags that show momentum is still with the buyers. You can learn a lot in hindsight by looking at this chart and how price reacts to, and moves between support and resistance zones inside trends.

Do you still see opportunity trading the RBA Minutes?

 

[Vantage FX]

Fighting out of the Red Corner:

“Good morning and welcome to a battle for the ages to decide who will gain the right to call the Canadian election title belt their own. Fighting out of the Red corner, wearing white trunks with Maple insignia and weighing in at 150 lbs, 5 ounces. Representing the Liberal Party of Canada, Justinnnnn Trudeauuuu!”

Yes, that is Canada’s new Prime Minister elect, expected to take office during November. Justin Trudeau, campaigning for the Liberal Party against the current Conservative government led by Stephen Harper, has swept to power on the back of promises to stimulate Canada’s flailing economy with a new wave of fiscal spending.

The fact that Trudeau and his government gained enough seats for a majority is the most significant aspect for markets here. We all know how much markets despise uncertainty and whatever your political persuasion, this is good for markets and the Canadian Dollar.

With the Bank of Canada’s interest rate decision on the calendar tonight, the support that fiscal spending will bring could see Poloz sit on his hands and see if the government can do some of the stimulatory work for him. The question becomes how much weight would a tap on the shoulder from Trudeau asking the BoC to keep a dovish course hold? Governments crave early momentum and even if the bank is unmoved on rates, a dovish tone tonight could give the spur needed.

USD/CAD Daily:

Click on chart to see a larger view.

After featuring USD/CAD in last Friday’s Chart of the Day, price has rallied off the major support/resistance zone in red. Yes the CAD got a boost after the reaction, but the level looks like a line in the sand if the above BoC scenario does in fact play out.

———

On the Calendar Wednesday:
Other than a the minimal impact 3rd tier news releases from Australia, New Zealand and Japan, the Asian calendar is running on empty today. All the news trading action begins during the New York session with the highlight being the Bank of Canada Rate Statement and accompanying report and press conference.

CAD BOC Monetary Policy Report
CAD BOC Rate Statement
CAD Overnight Rate
USD Crude Oil Inventories
CAD BOC Press Conference
GBP BOE Gov Carney Speaks
USD FOMC Member Powell Speaks

———-

Chart of the Day:
The last time we took a look at US stocks was at the beginning of October when we were watching for any action around end of quarter Indices squaring. With things settled once again and a new quarter in full swing, we take another look at the SP500 in today’s chart of the day.

SP500 Weekly:

Click on chart to see a larger view.

The SP500 weekly shows price having broken the major bullish trend line when stocks were ripping faces off and the world was going to end.

Of course none of the doom and gloom came to fruition and price has pulled back all the way to re-test the broken trend line as possible resistance. The fact that this re-test lines up with the 2nd trend line I have marked on the chart adds extra significance to the level.

SP500 4 Hourly:

Click on chart to see a larger view.

I’ve added a short term channel in red to the above 4 hourly chart, adding to the confluence of resistance forming in this zone. As you can see, there are plenty of levels to the upside that you can manage your short risk around if you want to play the fading game.

Do you see opportunity in trading Indices on MT4?

 

[Vantage FX]

Canadian Club:
In yesterday’s Daily Market Update, we took a look at trading the Bank of Canada interest rate decision in the wake of elections which saw the Liberal’s Justin Trudeau sweep to victory.

Our thinking was that with a new government coming in with a mandate of implementing a wide range of fiscal stimulus measures, Poloz and the Bank of Canada may have some of the work done for them in the coming months and that cutting rates again might not be the ideal situation to play for.

“CAD Overnight Rate on hold at 0.50% as expected”

So while the BoC left interest rates unchanged, they did however cut their economic forecast for GDP over the next 2 years.

USD/CAD Daily:

Click on chart to see a larger view.

The dovish tone accompanying the downgrades in the BoC Monetary Policy Report gave the Canadian Dollar a slap and caused USD/CAD to continue to rip out of the support/resistance zone we have been watching.

“Lower prices for oil and other commodities since the summer have further lowered Canada’s terms of trade and are dampening business investment and exports in the resource sector.”

Oil Daily:

Click on chart to see a larger view.

With the price of oil continuing to tumble, the largely reliant Canadian export economy has naturally taken a hit. Poloz warned that the effects of this ‘two stream economy’ wont be going away any time soon and that we need to be patient in letting past interest rate cuts trickle through the economy.

Trudeau’s honeymoon might not last long by the sound of it, so it will be interesting to watch what his government can do from a fiscal point of view to spur fresh growth.

Upcoming ECB Meeting
Tonight we cap off the week’s major central bank event risk with an interest rate decision and press conference from our favourite central banker, Mr Mario Draghi of the European Central Bank.

General consensus from the major surveyed banks, is an expectation that the ECB will further ease policy in the near term. European QE is not finished yet!

EUR/USD Daily:

Click on chart to see a larger view.

Just be aware that a dovish Draghi is the outcome that is most widely expected. This is always dangerous when it comes to trying to get on board a trade late and with price still in the middle of its longer term channels, just make sure you are managing your risk intelligently.

———

On the Calendar Thursday:
AUD NAB Quarterly Business Confidence

GBP Retail Sales m/m
EUR Minimum Bid Rate

CAD Core Retail Sales m/m
EUR ECB Press Conference
USD Unemployment Claims

———-

Chart of the Day:
We spend a bit of time going over the Gold chart and I often get asked what about Silver? Silver trading respects major technical levels just as well, highlighted by one weekly support resistance zone that we are going to take a look at today.

Silver Weekly:

Click on chart to see a larger view.

The marked support resistance zone has been touched multiple times both on the way up and down. Price has most recently rallied out of the level, but is still in a huge bearish trend from the 2010 highs.

Your trading plan of attack here would be to decide if you want to go with the overall trend or if you want to use the weekly support level to manage your risk around, and play for a change of trend.

Silver Hourly:

Click on chart to see a larger view.

I’ve included the hourly chart just so you can see the sort of pops that can come about while trading silver. The hourly chart shows the top of the support/resistance zone and then the huge, momentum rally that we got out of the level.

Is this your last chance to get long at these prices or are you going with the trend?

Can you see the opportunity in trading Commodities on MT4?

 

[Vantage FX]

Play the Expectation:
Trading isn’t about what happens, it’s about what markets expect to happen in the future. There is no clearer example of this than last night’s European Central Bank interest rate decision and accompanying press conference from Super Mario Draghi.

“EUR Minimum Bid Rate on hold at 0.05% as expected”

The ECB left interest rates unchanged as expected, but the Euro was HAMMERED by aggressive selling after Draghi not only gave the bland ‘jawboning’ that they are willing to expand their QE asset purchasing program, but gave the nod that they are actively exploring ways to do so.

It looks as though December is all but a sure thing when it comes to the ECB adding stimulus, with most probably both a reduction in the deposit rate even further below 0% while also expanding the rate of QE. Futures markets now have priced in over a 50% chance that they cut in December but the tone of the market is screaming that even more is going to be priced in as we head towards the next meeting.

The ECB’s main worry is that of low inflation nowhere near targets, structural reforms throughout member states lagging and of course the external pressures that China and the US Federal Reserve on hold present. Weakening the Euro further again seems to be the only bullet left to combat these issues and the race to the bottom continues.

EUR/USD Daily:

Click on chart to see a larger view.

Of course the dovish rhetoric sent the Euro plummeting through short term support, pushing it to multi-week lows where price now continues to sit.

On the @VantageFX Twitter we have been discussing the levels of support in play but if you’re game enough to jump in front of this steam train with big, bright QE headlights beaming down on you then you are braver than me. Momentum: Do not fight a losing battle.

If you’re really keen (or you know, really bored…) then you can watch the latest ECB Press conference on YouTube here. Technology these days huh!

———

On the Calendar Friday:
Tonight sees the release of a whole bunch of Eurozone PMIs. If we do happen to find a short term bottom at the above support levels, any miss in expectation in these numbers could be seen as confirmation that the economy is as bad as the ECB says, and could be an opportunity to short into.

EUR French Flash Manufacturing PMI
EUR German Flash Manufacturing PMI
EUR Flash Manufacturing PMI

CAD Core CPI m/m

———-

Chart of the Day:
To compliment Wednesday’s look at the SP500 chart, we today take a look at little brother: The SPI200.

SPI200 Daily:

Click on chart to see a larger view.

The Aussie SPI has also experienced somewhat of a recovery from its Black Monday drop where it fell hard through resistance and confirmed its bearish trend by making a lower low.

The key levels on this chart are the bearish trend line and the horizontal support/resistance zone that price has now pulled back to re-test. If these two levels can line up then that just adds to the significance of the level.

SPI200 4 Hourly:

Click on chart to see a larger view.

If this chart looks a little strange, it’s because I had to shift the timeline across so as to fit a key 4 hourly touch that helps highlight the importance of the red zone that we currently have in play.

The 4 hourly is to show the short term channel or flag pattern that sees price pulling back toward the major trend line where we expect a reaction. Yes, we have horizontal resistance in play, but the major trend line is still relatively far away and while we are still inside the middle of this short term flag, I’m not jumping out of my skin to sell. Yet.

This one is still playing out and open for discussion. Can you see the opportunity in trading on MT4?

 

[Vantage FX]

China Cuts:
Welcome back to Monday Asia in what looks an action packed week.

Friday saw the People’s Bank of China cut their benchmark rate by another 0.25% to 4.35%. This is the 6th cut of official interest rates in the last 12 months! Interestingly enough, the control that the PBOC has, allows it to cut rates for ‘businesses and commercial purposes’ but not for mortgages. This is intended to guard against the formation of a housing bubble. Wouldn’t the RBA and RBNZ love that!

Alongside the rate cut was a cut in the Reserve Requirement Ratio by 0.5% to 17.5%. The RRR is the level of capital that banks must hold on their books and the cut has the effect of flooding the economy with an increase of liquidity intended to spur spending and economic growth.

China has continued on the path of financial system reform and a move towards the liberalisation of their market. In a major change, Chinese banks no longer have to be completely in line with the PBOC when it comes to setting their own deposit rates. The PBOC has said that it will remove this deposit ceiling, further inching the economy towards the open market.

In theory.

AUD/USD 5 Minute:

Click on chart to see a larger view.

The Aussie Dollar and its reaction is a weird one. It doesn’t quite know what to take from the Chinese move because on one hand the flood of liquidity is a good thing, but on the other hand it also means that the Chinese economy is in serious trouble and PBOC policymakers are doing everything in their power to try to correct the sinking ship.

The Swiss Ramble:
The other major story heading into this week is the plunging Euro. Friday’s trading saw the common currency drop through yet more support levels and this has brought the Swiss Franc back into play.

With the floor falling out from under the Euro, all that money has to find a home somewhere and that home seems to be in Francs. Something that the Swiss National Bank is not too pleased about. I’m sure we all remember the EUR/CHF 1.2000 floor?… Well with price in the 108s and heading south again fast, the SNB has stepped in with a few timely comments on the news wires.

“At its current level the Swiss franc remains markedly overvalued.”

“The depreciation has been positive, but we expect further development in this direction.”

Check out the EUR/CHF chart and some trading ideas in the Chart of the Day section below.

———

On the Calendar Monday:
CHF Daylight Saving Time Shift
EUR Daylight Saving Time Shift
GBP Daylight Saving Time Shift

NZD Bank Holiday

“New Zealand banks will be closed in observance of Labor Day.”

EUR German Ifo Business Climate
USD New Home Sales

———-

Chart of the Day:
Following on from the evolving narrative of Euro weakness that we spoke about above, today’s chart of the day takes a look at the Swissy.

EUR/CHF Daily:

Click on chart to see a larger view.

Central banks can huff and puff, jawboning until their heart is content, but the market is always right and the market will always get what it wants. And right now, that is to sell Euros against the Franc.

Take the better prices to short into and run with them. The snap down will come and it will come twice as hard as any short lived rally off technical support and a jawbone.

Do you see opportunity in trading EUR/CHF?

 

[Vantage FX]

USD Heading into FOMC:
With FOMC on Thursday morning, our focus shifts to the US dollar and its effect on the majors.

The bottom line is that the strong US Dollar is a problem for the Fed. In an economy of stunted growth with company after company featuring problems that a high USD poses for their bottom line in their reporting, you know you have a problem. The high USD doesn’t exactly help domestic inflation either and if you add in China and Europe’s race to the bottom then the Fed has got itself in a bind.

Janet Yellen has persistently cited the high USD as a problem for the Fed in moving toward interest normalisation and the beginning of the impending rate hike cycle and there is nothing to suggest that anything will change come Thursday’s statement. The expectation is very much that Yellen will look to pull back on the dollar and try to buy the US economy some more time if you will.

The arguments for a 2015 rate hike have been all but silenced as the Fed continues to manage expectations around a strong USD.

Turning to the majors and most specifically EUR/USD, we can see the expectations for a dovish Fed being factored in. Draghi made sure the Euro stayed weak last week by promising more QE but the Euro looks to possibly have found a bit of a bottom here as the USD narrative comes back to the fore.

EUR/USD Daily:

Click on chart to see a larger view.

EUR/USD Hourly:

Click on chart to see a larger view.

Surrounding the FOMC meeting, the higher risk looks to be for a USD drop on the back of a harshly dovish statement. You have to ask yourself what the Fed would get out of anything but talking down the dollar, and the answer is zilch.

Take the path featuring the least likelihood of a major miss in expectation.

———

On the Calendar Tuesday:
NZD Trade Balance

GBP Prelim GDP q/q
USD Core Durable Goods Orders m/m
USD CB Consumer Confidence

———-

Chart of the Day:
Today’s USD/CHF chart of the day is a follow up to yesterday’s EUR/CHF chart. After posting yesterday’s Swiss Ramble blog, the discussion of Euro weakness came up on Twitter.

USD/CHF Daily:

Click on chart to see a larger view.

Compare the two charts and you can see just how weak the Euro has been recently.

With price bouncing off trend line support and then rallying through resistance that formed the daily triangle pattern, we now sit at a short term swing high.

I’ve never really been much of a breakout trader myself, and can see the higher probability play being letting price tuck back into the triangle. It’s just too clean to be a textbook breakout.

Do you see opportunity in trading USD/CHF?

 

[Vantage FX]

Mixed Markets, Wait and See:
The US Dollar pulled back into its weekly range against the majors as US data missed expectations and tomorrow’s FOMC meeting saw markets continue to settle and square up.

US data overnight included a 1.2% fall in Core Durable Goods orders for the previous month, as well as a drop in Consumer Confidence in October. CB Consumer Confidence is measured as an index based on surveyed households which was expected to stay steady around 102.5 but instead missed down at 97.6.

Just be aware that these numbers have zero bearing on the Fed tomorrow. With no press conference scheduled after the meeting, the statement is the only opportunity that they will get to convey to markets the message they want to send. Will they still hint at the possibility of a December hike? What about any changes in their assessment of the economy? These are both major points to look out for when the statement is released.

Finally, keep an eye on the ‘global developments’ section of the statement. As has been the case in past meetings, the Fed has made a point of this line and if they do again, it could be the kicker that the doves were looking for to send the USD down. We’re waiting and seeing for now.

Elsewhere, the UK Preliminary GDP release showed signs that a more prolonged economic slowdown could be ahead.

“GBP Prelim GDP q/q (0.5% v 0.6% expected)”

The previous quarter’s number was 0.7%, showing both an actual decline as well as a greater decline that expected. Cable fell following the release of the data but optimism around domestic indicators such as service demand and the fact that the BoE isn’t likely to take anything from the numbers saw the pair take back its falls before being hit by the USD data.

GBP/USD Daily:

Click on chart to see a larger view.

———

On the Calendar Wednesday:
AUD CPI q/q

USD FOMC Statement
USD Federal Funds Rate

———-

Chart of the Day:
When I read these reports and see ugly line charts that aren’t easy on the eye, I immediately flick to another window. So if I’ve lost you, I understand but if you are still reading them lets take a look at why I included it in today’s chart of the day:

AUD/USD Weekly:

Click on chart to see a larger view.

I had to zoom out this far to show the weekly trend line that is still in play when we zoom into the hourly chart.

AUD/USD 4 Hourly:

Click on chart to see a larger view.

So now we can zoom back in again and see what’s happening around the line in more detail. I’m going to leave this one open and just ask you a question.

Do you see opportunity trading Forex?