The Reserve Bank of Australia met today and kept the key Cash rate unchanged at a record low 1.5 per cent per annum. Widely expected, the reasons for the stance included low wage growth, and inflation expected to remain subdued. They maintained a forecast of GDP growth ‘a bit above’ 3 per cent this year and next. As way of comparison the Cash rate was over 7 per cent in 2007.
Data from the RAC today say that diesel and petrol prices rose in May by 6 per cent, their fastest on record, to an average £1.323 and £1.204 per litre; some motorway services stations were charging almost £1.50 for diesel. This ‘punitive combination’ was caused by higher crude oil prices and a weaker pound. Prices had risen on every single day since April 22 through to May 21. The BBC reports that consumers are also facing higher energy bills at home, though the cost of housing has decreased recently.
DAX 30
Momentum more bearish than one might expect considering we’re not all that far from the record high.
SHORT TERM TRADER: Tiny short at 13145; stop above 13050. Target 12400.
POSITION TAKER: Short at 12935; stop above 13050. Target 12000.
FTSE 100
Interesting to see that here too momentum is bearish though we are just a fortnight from the record high and less than 200 pips below it.
SHORT TERM TRADER: Tiny short at 7855; stop well above 7800. Target 7400.
POSITION TAKER: Small short at 7799; stop well above 7900. First target 7400.
S&P 500
Momentum is rubbish as we hover at the Fibonacci 61 per cent retracement resistance taken from the record high.
SHORT TERM TRADER: Short at 2725; stop above 2745. Target 2625.
POSITION TAKER: Small short at 2720; stop above 2755. Target 2620.
BRITISH POUND/US DOLLAR
On the daily chart the commodity channel index has turned positive even though the little bounce stalled yesterday at the psychological 1.3400.
SHORT TERM TRADER: Tiny long at 1.3275; stop below 1.3240. Target 1.3800.
POSITION TAKER: New small long on Friday’s close at 1.3350; stop below 1.3170. Target 1.4200.
EURO/US DOLLAR
The MACD has turned bullish on the daily chart as the euro retraces almost 23.6 per cent of this spring’s drop.
SHORT TERM TRADER: Small long at 1.1685; stop below 1.1500. Target 1.2000.
POSITION TAKER: New long at 1.1660; stop below 1.1600. Target 1.2400.
GOLD
No longer oversold as we consolidate under the 1310 area.
SHORT TERM TRADER: Tiny short at 1294; stop above 1310. Target 1265.
POSITION TAKER: Square.
Nicole Elliott is a long-standing Member of the Society of Technical Analysts and has taken over the IC’s trading coverage. She is regularly interviewed and quoted by the financial media, is a conference speaker, and author of several books on charting.
