|1.0975||100 HMA||1.0830||Friday low|
|1.0940||(23.6% of 1.1299/1.0830)||1.0821||10 Mar low|
|1.0900||Minor||1.0775||(76.4% of 1.0521/1.1616)|
|1.0875||Minor||1.0710||5 Jan low|
Eur/Usd remained heavy on Friday, with the dollar still underpinned by Trumps victory, and headed into the good support that lies in the 1.0820/50 area, making a low of 1.0830. A break below 1.0820 means that there is little to hold the Euro up until 1.0775 and with the dailies pointing in this direction it would seem that this is where our focus should lie. Trading from the short side and selling into short term strength seems to be the plan, with resistance to be seen today in the 1.0970/1.0920 area. SL above Friday’s high. Note that Mario Draghi will be speaking today.
An important point to note is the price action in the US bond market since last week’s US election. I am not an interest rate trader but the charts look as though they are about to scream to the topside – in yield terms – (I have attached a weekly 30 year US T-bond chart below). The look of this chart would tend to be supportive of the theory that Trump will start spending in order to build the economy, stoking inflation and possibly causing the Fed to be quite active in managing monetary policy (higher rates), which will underpin the dollar in the medium/long term. 2017 is going to be an interesting year – I suspect with a new dollar bull trend ahead – we shall see.
|24 Hour: Prefer to sell rallies||
Medium Term: Mildly bearish
Economic data highlights will include:
M: German Wage Price Index, EU Industrial Production (Sept), ECB’s Draghi Speech, Fed’s Lacker Speech
T: EU Trade Balance (Sept), Provisional GDP (Q3), German/EU ZEW Economic Sentiment Survey , Feds Rosengren Speech, New York State Empire Mfg Index, US Retail Sales (Oct), Business Inventories, API Weekly Crude Oil Stock Inventory
W: EU Non MP Meeting, Feds Bullard Speech, US PPI, Industrial Production, Capacity Utilisation, NAHB Housing Market Index, Feds Harker Speech
T: EU CPI, Construction Output, ECB Minutes, US Housing Starts, Building Permits, Jobless Claims, CPI, Philadelphia Fed Mfg Survey,
F: ECB Governor, Mario Draghi Speech, EU Current Account, Feds Bullard Speech, BUBA’s Weidmann Speech, Kansas Fed Mfg Activity