Hi, well we all saw the result of Friday’s dramatic NFP news.
Those results have put a major spoke in the wheel of the Feds intended interest rate rise and J.P Morgan say that the “probability of a recession occurring within the next 12 months has never been higher during the current economic recovery.”
In the UK an up to date poll suggests that the leave camp is growing and the chance of the UK leaving the Eurozone is now a real possibility no matter how much Cameron and his crew try to scare voters into backing him.
In the Eurozone, Japan, Australia & New Zealand their heads of government/finance ministers will be watching their currencies strengthening with alarm.
Particularly the ECB & Japan, both of whom are printing Billions of their currency every month in an attempt to stimulate their economies. The last thing they want to allow is the currency to gain strength as it completely negates the reason for doing it.
Trying to trade on Monday is akin to playing Russian roulette!
Its all about the fundamentals and global macro analysis is more important than technical right now. Check out Judiths post in the morning to see her take on the current situation.
So watching and waiting is the mantra for the week ahead. Yellen speaks Monday, the financial press will be hanging on every word. Draghi has a scheduled speech on Thursday, there is Australian & New Zealand interest rate decisions and the more dangerous speeches afterwards. Trying to trade this week is akin to tip toeing through a mine field whilst wearing a blindfold
As traders our first goal is to not lose money. The good thing is even if a major recession rears its ugly head the skills you are acquiring mean you will still be able to make a profit BUT for that you need to protect your bank.
I will place NO forward orders this week. The following are only areas of interest. Because of the Brexit situation I am not going anywhere near the Gbp except Gbp/Euro. I will watch it, but am unlikely to get involved early in the week nor when Draghi is speaking. Also bear in mind any of the top finance people may say something unscheduled at any time. If you ignore my advice and trade. Only be in one at a time and manage your risk carefully.
Aud: 0.7350 was the preferred area. – now watching only. Wait until things settle down and then after the interest rate news.
Nzd: Same as Aud.
Gbp/$: Still too messy for me due to Brexit talk.
Euro/$: Still only looking to short 1.1450 is an area to watch and even more so 116.90 wait until after Draghi speech before getting back in.
Euro/Gbp: We are there now BUT no forward order, one to watch on 4 hour chart 0.7790.
Aud/Yen: Still looking to short at 84.70 BUT not a forward order
Cad: Major break after NFP & oil is key. If it maintains current price or goes up then I expect this to fall, so a pull back to 1.300 is of interest to short,
New members please note: If I am looking to take a trade long, at for example 1.5000 , I place my order 10 pips above & 10 pips below for a short. This is because price often does not quite reach a major line and you need to allow for spreads. We are NOT a “tipping service” our aim is to teach you how to trade for yourself.
For more up to the minute updates do not forget to drop by the forum in Pierre’s corner.
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