In a speech early this morning Guy Debelle, Deputy Governor of Australia’s central bank noted, ‘just as the policy rate in Australia did not need to decline to the very low levels seen in other parts of the world, the fact that other central banks increase their policy rates does not automatically mean that the policy rate here needs to increase’. At last, separating the men from the sheep!
Overnight an earthquake measuring 6.7 on the Richter scale hit the Aegean Sea between the Greek Island of Kos and the Turkish tourist resort area of the towns of Bodrum and Datca. There are currently fears that a tsunami might follow. Two have been killed, many injured and people have been warned not to enter damaged buildings.
DAX 30
Today the Financial Times reports that in the week to 19th July investors poured $3 billion into European equities, the highest level since May and taking this year’s total inflows to $26 billion. Meanwhile the euro is at its strongest against the US dollar in almost two years. The Dax’s shooting star yesterday inside Tuesday’s range is a variation on a harami combination indicating a pregnant pause.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
FTSE 100
Bursting back up to the trend line taken from June 2016’s low as we break above the recent highs.
SHORT TERM TRADER: Square.
POSITION TAKER: Stopped out of my short position at a loss.
S&P 500
A doji at a marginally new record high and overbought on the RSI makes for a frightening combination.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Sterling weaker again, masked here by US dollar weakness, as it trades at £0.8990 to the euro – a new high for this year.
SHORT TERM TRADER: Stopped out of my long position at a loss.
POSITION TAKER: Small long at 1.3090; stop below 1.2900. Target 1.3400.
EURO/US DOLLAR
With the Euro zone more often than not running a surplus on its current account, a stronger currency might not be what the doctor ordered. Trading at its strongest against the US dollar since August 2015 a weekly close above 1.1500 would signal that it has eventually broken out of the roughly 1.0500 to 1.1500 that has held for all too long.
SHORT TERM TRADER: Small long at 1.1525; stop below 1.1450. Target 1.1700, maybe 1.2000.
POSITION TAKER: Square.
GOLD
Bullish momentum’s got stronger but gold isn’t benefiting that much from US dollar weakness where its index has lost almost 1 per cent so far this week.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
