Sunday, August 19, 2018

Week Ahead 34

Next week will be busy with news and important data releases. FOMC meeting minutes, resumption of US China trade talks, Jackson Hole just to mention a few. 

USD Index finished the week with a strong bearish bar closing at a S/T resistance at 96.00. Should that level fail MAs offer support otherwise the market could retest the strong support around 95.20.

SP500 closed the gap on Friday finishing the week on a bullish note. Moving averages offer now support and the early Augusts high is the resistance before the all time high. 

Nasdaq Index respected the longer term trendline and bounced back from 7300. The lower highs on short timeframe are a bit of concern now.

DAX bounced back from strong support and needs much more to change the bearish picture.

Declining US yields and flattening yield curve might not be a good sing for equities. The 2y could not bounce back as the US indices did on Friday.

US Oil broke down from the 67-00-70.50 channel. The 200d SMA and the early June lows offer a strong support now.

Copper is off the L/T support at 2.50. Positive trade talks news could lift it even further.

Gold is fully driven by USD rather the prevailing risk on/off mood. It broke the 1200 level on Monday and reversed sharply on Thursday. 

EUR broke the 14.30 S/T resistance but needs follow through. GBP is at the 1.2750 S/T resistance. Both AUD and NZD had a nice follow through after breaking S/T resistance. CAD moved sharply after the strong CPI reading and now is at a S/T support. CNH also broke support on the resumption of trade talks. 

Friday, August 17, 2018

European carmakers

BMW: bounced back from key support and is in an upward channel.
Daimler: broke key support and it is forming a potential double bottom.
VW: broke key supports. Little follow through after the second break, now it is consolidating.
Renault: broke key support and it is consolidating.
Peugeot: broke out from a long term channel and reached a measured move target that acts as a resistance now.
Fiat: the pass away of the CEO pushed the priced down to the January low key support level.
Peugeot/BMW shrinking spread is something to consider.

DX trend is intact but it is facing with key resistance

Wednesday, August 15, 2018

DAX is near major resistance

This is the June 28 low and also a measured move target. I wouldn't call it support now.

The real EUR headache

Compiled from from the respective data.

Inflation is ticking up everywhere

Compiled from from the respective data.

Minor USD correction in the morning

There is minor USD bounce back after the nice run again during the Asian session. I look for price action at S/R or even before given the strength of the trend.

Tuesday, August 14, 2018

JPY is weakening further

It is reported that a lot of Japanese retail investors were hurt in the Turkish crisis. They must have brought most of their money back by now.

GBP is breaking out from the narrow channel

Should it manage to break out the next resistance is around 1.2850 that would be at the 50_4h SMA.

EUR is struggling even to touch the resistance. 

Saturday, August 11, 2018

Week Ahead 33

US Equities didn't move too much last week as the TRY collapse wiped out all the gain on Friday. Though, they were trading in a very tight range from Tuesday that was a sign of weakness. I would want to see at least another leg of this correction before considering buying the dip.

Things look much worse in Europe as DAX dropped more than 2% on Friday. It broke key resistances an completed a H&S pattern. The H&S target coincides with the previous low of 12100. It looks definitely bearish. I would look to sell more at the bounce back if any or it goes further down. The old rule applies: buy US Equities in rallies and sell DAX in the risk off mood. 

It is important to point out how the US2y behaved this moth. We saw dips before the Friday dive so it might be a decent flow to bonds that is not so good for equities.

Trade War victims the agri complex looks to see new lows. It is good for shorts and bad for US farmers who shouldn't blame the traders.

Oil is back to the 67.00-70.50 channel after the false breakdown on Wednesday.

Gold is still in a tight channel bouncing back from the major long term support level multiple times. It looks sellers time to time pop up as the USD interests are appealing. It is important to point out that Friday was clearly risk off day and the 2y fell sharply and gold could not break out from this range. 

It seems that nothing can stop the dollar run.

JPY and CHF can hold despite the run. It looks that any USD correction or more risk off mood could bring the JPY to the 109 area or even further down.

Friday, August 10, 2018

TRY collapses

TRY had broken the measured move target yesterday very decisively and today simple collapsed. I'm taking my position out as I would expect at least some verbal international support as it could easy become a system risk.

USD is the winner of the Trade War so far

Majors are falling off the cliff this morning. EUR/USD cleared a massive stop area.

Only JPY can maintain some strength as this is viewed as a risk off sentiment.

This could spread to equities. ES and NQ futures are in the read now.