Well they’ve done it!
Sort of… Clearly the draft deal needs to be ratified, but save for parliamentary and legal hurdles, we should see this deal accepted and implemented over the course of the next few weeks. In summary what’s currently on the table in draft form should satisfy about 80% of all market participant Christmas wish lists. More detail and a small dissection of the draft can be found here.
Sort of… Clearly the draft deal needs to be ratified, but save for parliamentary and legal hurdles, we should see this deal accepted and implemented over the course of the next few weeks. In summary what’s currently on the table in draft form should satisfy about 80% of all market participant Christmas wish lists. More detail and a small dissection of the draft can be found here.
The overall reaction in the market was clearly positive as risk
sentiment and equities took a run higher. The EURUSD, the key
protagonist in this drama, took a leg up overnight and traded as high as
1.4440 this morning, no doubt taking a raft of small and short-term
tops out on its way higher. I will not be giving levels today as I
simply don’t see a clear picture of what this market is doing. Let’s be
honest, who really knows what is happening…
Elsewhere there were rumours last night that a deal in the U.S. debt
ceiling debacle had been reached, but as quickly as they appeared they
were dispelled.
The DXY has broken lower overnight (obviously) taking out a rising trend
line that in my mind looked fairly solid for the summer break. But
having said that, let’s see where the week ends and how we look once the
dust has settled somewhat.
On the day we have little by way of data and we await more headlines
(although…) for the next blip in any direction on the majors.
With regard the crosses… As stated above, I don’t have a clean view at the moment save for some relative value trades.
I refer predominantly to the GBPCAD, which for the time being is looking
healthy and trailing stops from yesterday's long entry is recommended.
Overall this cross looks like it’s in consolidation mode for the time
being, putting in a medium-term bottom around the 1.5250/5300 level.
Confirmation of genuine upside potential will come with a sustained
break and close above the 1.5550 level.
In the EURJPY, as stated for some time (I like owning JPY) fading
rallies is the way forward. To my mind only a close above the
113.50/114.00 area will signal a short-term reversal of fortune for this
pair and so any sales around current levels need to be carefully
watched and tightly monitored.
The AUDUSD is another pair that I have a hard time accepting at present
levels and can only suggest that what's against her is a resolution made
on a continent far far away from the sunny shores of Oz. Thus fading it
up here is suggested with stops needing to go in above the 1.0930
level, looking for a return into 1.0650 and then 1.0580.
Good luck out there folks, and personally I’m seeking shelter… Long
weekend for your humble scribe, back on the desk on Wednesday.
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