Good morning,
A quiet Asian session showed us little by way of any major developments or price action. It was instead various pieces of sound bites/comments and general jaw boning that was seen to be market moving setting up the market for today’s European session. Equities were lower and sold off overnight with the Dow dipping and staying below the psychologically important 10,000 level.
The comments and developments overnight that I refer to include some of the following;
• Joseph Stiglitz commenting that Europe should teach speculators a lesson in the face of record short EUR positions
• The Fed’s Bullard commenting about possible exit strategies and general gradual changes to the cash rate
• RBA governor Stevens warning that low rates for too long will spur bubbles
Chief amongst that was the fact that Trichet was seen to be leaving Sydney (RBA’s 50th birthday) early to be back here for the European Council meeting on Thursday heightening speculation that there is something more serious in the air regarding their treatment of Greece and the other beleaguered economies….
Read into that what you will but we walk in this morning to see the EURUSD better bid having cleaned out stops sitting in the 1.3715/20 area and we trade to 1.3743 in a short covering squeeze despite good offers lined up all the way into 1.3750. My personal feeling on this is that we see the remaining offers getting paid and we take out the more formidable stops above 1.3750 taking us in all likelihood towards the 1.3800 handle with good offers then sitting ahead of the 1.3830 level.
On the other majors it’s pretty much business as usual in the sense that risk is creeping slightly back in the market, but in my view this is simply a case of the market taking a breath before continuing on its merry way lower. I say look to fade rallies today and don’t get caught up in the euphoria (however temporary it might be).
Data wise we have little of serious note, save for UK trade balance data which if anything might see the Cable rally in smalls ahead of the number to then only be sold off afterwards.
I remain sidelined from the market and look to see how the next few days develop.
Best regards,
Ken Veksler.
С Уважением | Yours Sincerely | Med venlig hilsen
Ken Veksler - Senior Manager | Trading and Advisory
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