The contrasting data out from the Eurozone and UK continues to weigh on the Eur/Gbp cross rate with the market now approaching a retest of the 2009 lows by 0.8400. UK economic releases have once again managed to impress across the board.
MORNING SLICES
Fundys – The contrasting data out from the Eurozone and UK continues to weigh on the Eur/Gbp cross rate with the market now approaching a retest of the 2009 lows by 0.8400. UK economic releases have once again managed to impress across the board after consumer confidence, Halifax house prices, [B]PMI[/B], industrial and manufacturing production all have come in better than forecast. Meanwhile, in the Eurozone, PMI was weaker, while [B]retail sales[/B] were extremely disappointing. A survey released by Bloomberg showed that the Bank of England will soon signal an end to its QE program. In China, the PBOC was out pledging a more flexible currency, while also retaining an accommodative monetary policy outlook. Sterling is the strongest currency on the day against the USD, while the Canadian Dollar continues to lag following Tuesday’s Flaherty comments, in which the finance minister warned over excessive volatility in the Loonie. US mortgage applications data has come in at +4.4% versus a -6.3% previous weekly print. Looking ahead, Challenger job cuts are due at 11:30GMT, followed by ADP employment (-350k expected) at 12:15GMT. ISM non-manufacturing (48 expected) and factory orders (0.0% expected) follow at 14:00GMT. US equities futures point to a mixed open, while commodities are slightly offered.
[B]Quant –
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For information on the above tables, please visit our Guide to Morning Slices Quant section Techs - EUR/USD continues to consolidate latest gains since posting fresh 2009 highs on Monday by 1.4445. Key levels to watch over the coming session come in by 1.4445 and 1.4365. Bulls eyes psychological barriers at 1.4500. USD/JPY price action has been less than compelling of late as the market continues to trade sideways. Key levels to watch over the coming session come in by 95.90 and 94.85. GBP/USD remains very well bid with the market looking to establish above 1.7000. No real resistance until 1.7100, while back under 1.6900 required to take pressure off. USD/CHF not willing to breakdown down just yet after just sqeaking out fresh 2009 lows by 1.0560 on Monday. The market has been consolidating back above 1.0600 with a break above 1.0645 to potentially open the door for more significant basing. Back under 1.0560 negates.
Flows – Exporter offers in Usd/Jpy; system stops above 95.80. Specs on the bid in Eur/Jpy. Asian central bank bids in Usd/Chf. Model and option names selling Cable. Asian central bank and Middle Eastern offers in Eur/Usd.
Trade of the Day – Aud/Usd: The market has now retraced just over 61.8% of the multi-year high-low move in 2008 and 2009. Both daily and weekly studies are showing signs of overbought at current levels and we like the idea of looking for opportunities to establish fresh shorts in the pair if given the chance. Key psychological barriers are approaching by 0.8500 and we would have a hard time seeing any form of reversal before this level is at least cleared in some form. The current ATR resides at 120 points and this projects a potential high today by 0.8515. As such, we will look to take advantage of any rallies above the figure and into this area in anticipation of a major pullback over the coming days/weeks.[B] STRATEGY: SELL @0.8510 FOR AN OPEN OBJECTIVE, STOP @0.8710. RECOMMENDATION TO BE REMOVED IF NOT TRIGGERED BY NY CLOSE (5PM ET) ON WEDNESDAY.
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P&L Update and Overview: 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].
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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Quant section prepared by David Rodriguez, Quantitative Strategist for DailyFX.com
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