It appears there is more disagreement inside the Fed than we may have imagined. It was called a ‘close call’ in the September meeting as the FOMC minutes released today revealed,even though the rates were left unchanged. So does that mean there is a chance of a rate hike in November? It is still not likely with the presidential election a few days after the November meeting. The chances for a December hike have increased and the USD has enjoyed the more hawkish interpretation.

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The S&P 500 as you would expect were not so keen on the gloss as it has implications for stocks with the prospect of less easy money around;

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This is still on our list and has broken out of the consolidation. It is not ready yet as we will wait for the breach and acceptance under the monthly low…2100 is the critical level and it is worth the wait with the excellent risk/reward it will offer.

The oil price is always important to watch. It is fighting a weekly resistance and the fundamentals would lead us to doubt the ability it has to break through. I discussed this in the weekly blog. There are problems with follow through on any agreement, problems with enforceability and more importantly more production possible from the non-OPEC group who could easily fill the ‘freeze’ gap.

tip_oil2016-10-12_2155

The weekly level is the one to watch

The other piece of the jigsaw this week is the retail data from the US which is due Friday. If it misses it will dilute the optimism from the latest release.

Much of our watchlist involves a wait for pullbacks on pairs which have seen a breakthrough but that is just the way it is. Maybe Friday’s numbers from the US will provide what we need! Here is our list with no live positions at present:

USDSGD

This we would prefer as a pullback to 1.3730, but if it breaks the current level around 1.3825 and accepts we will look for longs.

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NZDUSD

A short on a pullback to 0.7220. The counter-long to that level could be possible for the brave.

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This on market profile, which we use in our analysis and is available on our pro site, the Fotis Academy and also shows a more aggressive short as well as the bigger balance pullback we prefer:

tip_mp_2016-10-12_2214

USDCAD

This is high on the list. The set-up is one of the best. The CAD did not perform well when oil was rallying showing some inherent weakness. It also has not left the balance and is very close.

usdcad_tip2016-10-12_2238

AUDJPY

This is a sentiment trade which is at interesting levels but we need a fundamental environment to support it.

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The equities are on watch as we see in the S&P500 above

Gold, also discussed in the blog is a long term long position. We will watch the weekly low at 1241.44 but also the USD news and it’s recent strength has kept Gold subdued. There are other aspects that can lead to sentiment shifts such as weak equities, lack of growth globally even if the US is upbeat and a whole deal of political uncertainty. The bias and the underlying fundamentals have not changed. These are threads we will pick up in the weekend analysis.Let us see if we have a balance around this weekly level:

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These are our trading ideas and not recommendations and are published to illustrate our process. We are happy to answer questions below and will be back Monday, hopefully with some entries!

Judith Waker

Robbie Stephenson
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