Published yesterday, Minutes from the Fed’s July 25-26 meeting showed that the decision to keep the Fed Funds target rate at 1.25 per cent was unanimous and followed a lengthy discussion about the recent soft inflation readings, Reuters reports. ‘Many participants…saw some likelihood that inflation might remain below 2 per cent for longer than currently expected, and several indicated that the risks to the inflation outlook could be tilted to the downside’. Their preferred measure dropped to 1.5 per cent per annum in June after peaking at 1.8 per cent in February.
London’s The Times newspaper reports that the US Federal Deposit Insurance Corporation (that backs deposits at banks) has launched another Libor related lawsuit which might claim up to $400 billion from British High street banks. They claim that the 39 American banks the FDIC were forced to bail out lost money because Libor rates were consistently set too low in order to pretend that the UK banks were in better health than they really were.
DAX 30
A second consecutive daily shooting star type candle below horizontal resistance at 12345 yet momentum is still zero. Today the Financial Times reports that Hesse state prosecutors and bank regulator BaFin are widening their probe into Deutsche Borse, no longer concentrating on shares the CEO bought in the stock exchange but reviewing the ‘reliability’ of all top management.
SHORT TERM TRADER: Small short at 12225; stop above 12355. Target 11550.
POSITION TAKER: Short at 12175; stop above 12415. Target 11500.
FTSE 100
A spike high and shooting star candle yesterday just above the 50 per cent retracement level has kept momentum marginally bearish.
SHORT TERM TRADER: Small short at 7410; stop above 7500. First target 7310.
POSITION TAKER: Short at 7300; stop above 7455. Target roughly 7000.
S&P 500
A second consecutive little shooting star candle ahead of the 2480 area that capped for much of July has kept the MACD just bearish.
SHORT TERM TRADER: Short at 2468; stop above 2485. Next target is pivotal support at 2400.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Trying to hold against the Fibonacci 61 per cent retracement support helping the commodity channel index turn up a tad.
SHORT TERM TRADER: New small long at 1.2885; stop below 1.2800. Target 1.3100, maybe 1.3270/1.3300.
POSITION TAKER: Square.
EURO/US DOLLAR
Very odd that prices are holding so steadily against the 1.1700 area yet momentum has turned more bearish.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
GOLD
Not what we had expected as we bounce quickly back up to the 1290 area and so the commodity channel index is back above the 100 level. Oh dear.
SHORT TERM TRADER: Small short at 1269; stop above 1296. Target 1210 again.
POSITION TAKER: Square.
