Sunday, January 15, 2017

More facts on Brexit and many CPI data release next week

There were two events last week that had meaningful impact on markets:
- Trump news conference and 
- US retail sales.
Nether of them offered some clear guidance, though both of them moved the USD. Trump speech resulted in USD weakening as market expected some more facts from president elect.

Retail sales was not so impressive, though it first helped the USD. Later on the USD gave back most of the gains. 

The key event next week will be May's Brexit speech in the Parliament. I suspect it would be  rather on the hard side that could lift the USD as risk aversion could prevail, but should have the biggest impact on GBP and EUR. GDP, USD and CAD CPI data will be released. Market is very much focused on the CPI figures, so especially the USD data will be important. BOC and ECB meet next week. On Friday Chinese GDP data will be released.

Equities
Equities do not seem to care about anything as they march higher. Technically the picture is mixed. There is a massive MACD divergence everywhere as the Trump rally entered into a consolidation phase.

The Nasdaq and the DAX both made some kind of breakout both with a very week follow through. I would refrain from looking any short opportunities here. Technically Nasdaq looks the strongest so I will look for long opportunities there, but scalp rather swing my trades. 

AUD/USD
Aussie is at a major resistance.


There are two forces (that are strongly interconnected) that move now the AUD:
- recovering commodity prices
- easing worries about Chinese hard lending.

Commodity prices are reflected in the strong Chinese PPI data released earlier.

The Chinese GDP is seemingly stabilizing at the 6.7% level.


USD/CAD
We are at the confluence of the long term trend line and the DEC low resistance that held so far.  


Gold
The Gold is retesting the 1,200 area which is a major resistance.

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