Friday, October 28, 2016

Dollar sideways, equities are widening the range

The good US preliminarily GDP (+2.9% q/q annualized vs +2.6% expected) did little with the USD.

EUR is within yesterday's range. There are two forces drive EUR rates:
- Policy divergence trades fueled by the increase in December FED rate expectations against the common currency.
- Better than expected Eurozone data helped the EUR. Coming releases will be important in this respect.
Look for short entry around 1.0950 or 1.0965 and false breakout, strong rejection bar at 1.0850.

There is not potential fundamental catalyst in sight that could significantly move GBP. Brexit talk ignited moves were faded quickly recently. Look for short at 1.2250 and long at 1.2080.

Aussie gave back the better than expected CPI gains and more. Its is in the middle of the 0.7500-0.7700 daily range. Look for opportunities at these levels.

Kiwi is somewhat similar to AUD on daily basis but looks technically stronger on the hourly chart. AUD/NZD cross seemingly rejecting the 5 months old resistance at 0.7700. Iron ore prices rose for the seventh day by 10%. Aluminum prices have also rallied strongly to five-year highs. The commodity complex should support the AUD, so I would not short at 1.0770. I would rather look for the false break of the 1.059 0 resistance.

USD/JPY exhibits some consolidation. I look for long at 104.85.

USD/CAD breakout loosing steam. Look for long entry at the retest of 1.3250.

SP500: long at 2124/2110 short at 2150/2170.

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