Equity Chaos
There was chaos on Wall Street today with the S&P falling below major Support levels, but, the reaction that has been in place for a while did not
come; the Europeans tore a hole in the Dollar today, something that has not happened recently on low Equity days. This gives us more confirmation that the Forex Markets may have moved into a pattern that confirms Equities going lower could have exhausted most Trade Desk’s ability to move to Treasuries, and therefore for them to protect the Dollar. Commodity values have a big hand to play in that as well, but the Dollar could garner no strength from the move out of Stocks, and that really is against the recent pattern of trade.
Hold Euro & Swissy, But Do Not Buy New
Be careful with the Euro and Swissy now, they are both through the 70% RSI area, a signal to hold existing positions, but to not add to or open new. These will need to pull back a little before we will get a new Buy signal. The Pound/Dollar crashed straight into the upside SMA Resistance at 2.0130, but the 100 and 200 day Averages are likely to hold back any further moves.
High Yield Pain
The Aussie was sold heavily today, as was the Kiwi, both suffering from being High Yielding Pairs. The pull-back was dramatic, and has certainly cleared out the Long cobwebs. Be a little careful going long on these two on the last Asian trading session of the week.
BoJ
At any time from 23:00 EDT tonight the Bank of Japan could release their Interest Rate decision, so do not be sitting in anything that has the Yen on it. The chances are for ‘No change’ on the 0.5% Rate, but if we were pushed to have to say one way or the other, a cut in Rates would not be surprising to us. If that were to happen the Equity woes from Wall street would likely be forgotten, and the Yen Cross Pairs may fly higher.
NFTW
The US Non-farm Train Wreck is coming on Friday morning, Non-Farm Payroll numbers are expected to confirm that the labor market is suffering from contraction, and that the economy may be in recession. Whatever comes on Friday morning is likely to be volatile, please be very careful in trading anything at 08:30 EDT on Friday.
0 Comments.