Some better than expected data overnight has helped to re-infuse risk appetite with currencies showing bid on the day thus far. UK CPI surprised to the upside, holding steady at 1.8% after analysts had been looking for a drop to 1.5%, while German and Eurozone ZEW came in stronger than consensus estimates. Looking to sell the Euro on an intraday rally back towards the 10/20-Day SMAs.
[B]MORNING SLICES[/B]
[B]Fundys – [/B]Some better than expected data overnight has helped to re-infuse risk appetite with currencies showing bid on the day thus far.[B] UK CPI[/B] surprised to the upside, holding steady at 1.8% after analysts had been looking for a drop to 1.5%, while [B]German [/B]and[B] Eurozone ZEW[/B] came in stronger than consensus estimates. There had been some pre-data release rumors for a strong German ZEW, and this rumor was also exceeded. Elsewhere,[B] S&P[/B][B] affirmed China’s sovereign credit ratings[/B], while the [B]chief economist [/B]at the stats office came out with an upbeat outlook for the Chinese economy. Looking ahead, [B]US producer prices[/B] (-5.9% expected), [B]housing starts [/B](599k expected) and [B]building permits[/B] (577k expected) are due at 12:30GMT, along with[B] Canada international securities transactions[/B] (2.0B expected). [B]Sterling[/B] is the strongest currency on the day against the buck, while the [B]Yen[/B] is the weakest. US [B]equity futures[/B] point to a higher open by over 0.50%, while [B]commodities[/B] are also well bid.
[B]Quant –
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For information on the above tables, please visit our Guide to Morning Slices Quant section
[B]Techs -[/B] [B]EUR/USD[/B] (See below). [B]USD/JPY[/B] setbacks have finally stalled out by 94.20 on Monday with the market rallying on Tuesday thus far to set up the potential for a bullish reversal day. Key levels to watch over the coming session come in by 95.50 and 94.20. [B]GBP/USD[/B] finding some bids on Tuesday after the market finally managed to close below the 50-Day SMA. Look for any rallies to now be well capped into the 1.6550-1.6600 area by the 10/20-Day SMAs. Below 1.6275 opens next drop. [B]USD/CHF[/B] continues to chop around within a very well defined multi-week range with the price currently locked in the middle of said range. No reason to be taking any positions here and will only consider playing the pair on a break towards the range lows or retest of the range highs. Recent price action has been constructive however, and a higher low is sought by 1.0670 ahead of fresh upside towards the range highs by 1.1025 over the coming days. Below 1.0670 negates.
[B]Flows –[/B] Asian central bank and Easter European demand for [B]Eur/Usd[/B]. Middle Eastern accounts buying [B]Cable[/B]. Local banks selling [B]Aussie [/B]while US bank on the bid. Japanese and US bank interest in [B]Usd/Jpy[/B] and [B]Yen crosses[/B]. Model funds offering [B]Usd/Cad[/B].
[B]Trade of the Day – Eur/Usd:[/B] Medium-term technical studies show the potential for a top carving after the market posted fresh yearly highs by 1.4450 on August 5. A shooting star weekly formation (week of 09 high) has been followed by a weekly lower high and lower low, with the market continuing to track lower into the current week. As such, we like the idea of looking for opportunities to sell the major in anticipation of additional weakness over the medium-term. However, market conditions remain quite choppy, and any shorts taken, will only be done on overbought intraday rallies. The 10/20-Day SMAs coincide and currently come in just over 1.4200 and we will look for these moving averages to cap gains ahead of some bearish resumption. [B]STRATEGY: SELL @1.4210 FOR AN OPEN OBJECTIVE, STOP @1.4380. RECOMMENDATION TO BE REMOVED IF NOT TRIGGERED BY NY CLOSE (5PM ET) ON TUESDAY.
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[B]P&L Update and Overview:[/B] Many of you have been asking for a way to better track trading results and open positions. In response to these requests and in an effort to be fully transparent, a simulated portfolio was been created in June to track and mirror all recommendations and trades. Below is a return on equity curve since inception on June 1, 2009, along with an open and closed position tracker. I am hopeful that this will make things easier for you all.
Additionally, please feel free to check out a [B]full profit and loss statement since inception on June 1, 2009[/B].
[B]Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
If you wish to receive Joel’s reports in a more timely fashion, e-mail [/B][B][email protected][/B] [B]and you will be added to the [/B][B]“distribution” [/B][B]list.[/B]
[B]Quant section prepared by David Rodriguez, Quantitative Strategist for DailyFX.com
To contact, e-mail [/B][B][email protected][/B] [B][/B]
Joel Kruger publishes 6 daily pieces:
[I][B]“Tech Talk”[/B] – A Daily Video Highlighting Technical Developments in the Overnight Session of Trade. [/I]
Monday-Friday (between 5:30am-6:30am EST)
[I][B]“Morning Slices”[/B] – Morning Overview using Fundamental, Technical, Flow, and Quantitative Analysis (Includes “Trade of the Day”).[/I]
Monday-Friday (between 6:30am-7:30am EST)
[I][B]“Indicator of the Day”[/B] – [/I][I]A Feature Report that Highlights our Most Significant Technical Indicator of the Day. [/I]
Monday-Friday (between 8:00am-9:00am EST)
[I][B]“Midday Snapshot” [/B]– A Midday Fundamental Update, along with Technical Analysis of Selected Rates. [/I]
Monday-Friday (between 10:30am-11:30am EST)
[I][B]“Scandi Daily”[/B] –[/I] [I]A Specialized Daily Fundamental and Technical Overview of the Nordic Currencies. [/I] (This report is only distributed through email. Please contact [email protected] if you would like to be added to distribution.)
Monday-Friday (between 11:30am-12:30pm EST)
[I][B]“Daily Classical”[/B] – A Daily Technical Overview of the Major Currencies. [/I]
Monday-Friday (published between 2:00pm-3:00pm EST)
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