Published overnight Minutes from the Bank of Japan’s June 15-16 meeting show that they discussed whether and how much information should be disclosed as to its plans for ending and winding back quantative easing. This despite once again failing to reach their 2 per cent inflation target. Meanwhile in an unusual move CEO of Japan Exchange Group Inc. has criticised the central bank for inflating valuations via its ETF buying programme.
In a speech in Liverpool the Bank of England’s Alex Brazier warned that consumer credit was growing too quickly. ‘Household debt – like most things that are good in moderation – can be dangerous in excess’ [having grown by 10 per cent this year].
DAX 30
Given back a Fibonacci 76.4 per cent of the rally since late April yet holding this retracement support with a hammer candle. This suggests the market will try and hold above yesterday’s low at 12140 today. However note the gap to 12090 on 21 April that really ought to be filled.
SHORT TERM TRADER: Small short at 12225; stop above 12500. Target 11550.
POSITION TAKER: Square.
FTSE 100
Seriously galling as the trend is now acting as resistance, slapping the index back down to the pivotal 7400 area. Note that the commodity channel index tuned negative on yesterday’s move.
SHORT TERM TRADER: New short at 7394; stop above 7520. First target 7300.
POSITION TAKER: Square.
S&P 500
Hovering in a rarefied atmosphere yet the commodity channel index here too looks set to turn down.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Tentative tiny moves around the psychological 1.3000 area. Momentum remains bullish and a number of economists are reviewing their outlooks for the second half of this year. Trump and the mighty dollar may not go hand in hand.
SHORT TERM TRADER: Square.
POSITION TAKER: Small long at 1.3090; stop below 1.2900. Target 1.3400.
EURO/US DOLLAR
Overbought on the daily chart as we trade in a tiny range at the highest level in two years. Light-headedness might lead to some dubious assumptions.
SHORT TERM TRADER: Small long at 1.1525; stop below 1.1450. Target 1.1700, maybe 1.2000.
POSITION TAKER: Square.
GOLD
Stalling roughly mid-way between the recent range, a tiny doji yesterday and the commodity channel index threatening to turn down. Watch this carefully.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
