Following the Federal Open Market Committee meeting yesterday where, as widely expected, the Fed Funds target was kept unchanged at 1.25 per cent, members noted that inflation was still below their 2 per cent target – as it has been for the last five years – and core inflation is running at 1.4 per cent. Admitting they could tentatively start reversing QE as early as September, in reality this is wide open and would merely involve not re-investing proceeds of bonds that had matured.
Today Swedish PM Stefan Lofven is expected to call a news conference as the ramifications of the leaking of masses of confidential data spirals. His minority Social Democrat government might be forced to resign if the opposition call a no confidence vote, or he may have to call fresh elections ahead of those scheduled for next year.
DAX 30
A minute shooting star candle yesterday has added to bearish momentum.
SHORT TERM TRADER: Small short at 12225; stop above 12500. Target 11550.
POSITION TAKER: Square.
FTSE 100
Another index with a (clearer) shooting star candle yesterday but until we start holding consistently below the pivotal 7400 area the jury is out – and the commodity channel index may not be giving the correct signals.
SHORT TERM TRADER: Short at 7394; stop above 7520. First target 7300.
POSITION TAKER: Square.
S&P 500
BRITISH POUND/US DOLLAR
As the US dollar loses altitude all around the world cable has managed its second daily close above horizontal resistance at 1.3030. Hopefully it will capitalise on this and manage a weekly close above here, increasing bullish momentum.
SHORT TERM TRADER: Square.
POSITION TAKER: Small long at 1.3090; stop below 1.2950. Target 1.3400.
EURO/US DOLLAR
Trading today at this year’s highest level and bullish momentum has now matched the strongest levels seen earlier this year.
SHORT TERM TRADER: First target 1.1700 met and profits taken. Will now see how it closes on the week to decide whether to take a more serious long term position here.
POSITION TAKER: Square.
GOLD
Oh dear, not at all what we had expected and we have been stopped out within the day. Back to the drawing board keeping in mind the generalised US dollar weakness and its effect on asset prices.
SHORT TERM TRADER: Stopped out of short position.
POSITION TAKER: Square.
