No wonder the Reserve Bank of Australia yesterday trimmed the cash rate to a new record low at 1.25 per cent. GDP data published this morning, covering the first quarter of the year, showed that it grew by a lower than expected 0.4 per cent over the 3 months, and at an annualised rate of just 1.8 per cent. This is the slowest pace in almost a decade – 1.6 per cent in Q4 2008 and 1.4 per cent in Q3 2009.
Data published yesterday showed that inflation for the Eurozone as a whole slipped to 1.2 per cent in May, down from 1.7 per cent in April. Once again, well below the ECB’s 2 per cent target. Worth comparing with Switzerland which on Monday showed that CPI was running at a mere 0.6 per cent in the year to May 2019, and has been running under 1.2 per cent for most of the time since 2008.
DAX 30
Getting rather messy as we break above the neckline of the small head and shoulders top that formed in April and May; the MACD is still bearish though, and the trend line might now provide resistance.
SHORT TERM TRADER: Short at 11870; stop above 12200. Target 11325.
POSITION TAKER: Short at 11700; stop well above 12000. Target 11000.
FTSE 100
The MACD is still just bearish despite the bounce which has retraced a Fibonacci 38 per cent of May’s losses.
SHORT TERM TRADER: Short at 7100; stop above 7320. Target 6875.
POSITION TAKER: Short at 7275; stop above 7320. Target 6875.
S&P 500
The MACD has been resolutely bearish since the beginning of May despite the index recovering a Fibonacci 38 per cent of last month’s losses.
SHORT TERM TRADER: Short at 2880; stop above 2845. Target 2720.
POSITION TAKER: New short at 2805; stop above 2870. Target 2625.
BRITISH POUND/US DOLLAR
Momentum is trying to turn bullish as we painfully pick up one big figure – just in time for the celebration of 75 years since the D-Day landings were launched.
SHORT TERM TRADER: Small long at 1.2675; stop below 1.2600. Target 1.2925.
POSITION TAKER: Square.
EURO/US DOLLAR
The MACD is now clearly bullish as bankers speculate as to which central bank will cut rates next.
SHORT TERM TRADER: Long at 1.1195; stop below 1.1180. Target 1.1400.
POSITION TAKER: Square.
GOLD
Quite the leap and in stark contrast to the laboured price action between March and May. Trouble is, it’s overbought and approaching an area of resistance (1340-1360) where it’s failed several times over the last 3+ years.
SHORT TERM TRADER: Looking to sell against long term resistance.
POSITION TAKER: Square.
