PPI Disappoints And S&P Has All Time Closing High May 15, 2015
S&P Has Highest Close Ever On Bad Data
I have said many times before that we are living in bizarro world and yesterdays market movements only makes that clearer. The PPI release disappointed much more than I expected and as I said “any drop below zero will add fuel to a (USD weakness) move”. I would expect some to say that the better than expected Unemployment Claims had something to do with it but that argument would carry much more weight if it werent just 10K better. Thats really not that big of a difference.
I will say that the impact on currencies wasnt quite so bizarro with the EUR/USD and GBP/USD just 50+ pips higher on the EU but should we see more negative data we can just about guarantee new all time highs printed in equities as the USD weakens further and the Fed gets closer to QE4 rather than touting rate hikes much more. Anybody other than me notice how quiet they have been about that lately? Any recent talk on rates has included the same “we are looking at the data to tell us when to hike rates” and the majority of the data has been crap.
EUR/USD Runs Short Third Push
The EUR/USD did make an attempt at a clean third push but came up short at a hefty daily level within 50 pips of the February highs yesterday. Considering that along with the full reversal from the highs I will be more open on direction today. It has made a 100+ pip push and full reversal and could go either way. I would be a little more convinced they will make an attempt at 1.5000 if I saw them run stops to the lows on the reversal but that didnt happen. The safest entries will be at the extremes of 1.1443 for a short and 1.1341 for the long. The levels in between I will watch for conviction beyond to signal a test of the next level and while the Asian range H/L look like they will be valid by the time London opens they are much higher risk to trade at today.
GBP/USD Short Extended Push
The GBP/USD strength is still holding up but has weakened further for today leaving me more open for the short. We wont have anything clear until we get some conviction below yesterdays lows telling us the higher probability they will push lower so although I will prefer a long I wont be bias for that direction. The safest short will be from a set up at 1.5811 while yesterdays lows would be the safest long at 1.5732. However if they do intend another push upward they will most likely start from either 1.5752 or just below at the NY/London overlap lows.
EUR/JPY Has Third Clean Push And Reversal
The EUR/JPY is getting an early start on a weak Yen this morning showing enough conviction they will test yesterdays highs. Since there is some Yen movement I will be open for the short at 136.30 level or just above but will need the USD/JPY to agree. Otherwise I will be more open on this pair as well today. The third push and reversal leaves direction questionable so shorting from the highs while watching for any conviction is valid and looking for the long at the daily level at 135.48 if there isnt a short entry. I will say the 135.86 level is also valid for the long during London but carries enough risk that I will need some convincing to get me long there.
Forex News Today
The calender is slow again today with nothing to get them pushing until the NY Empire Mfg. Index during the NY session. Expectations are for this to pop into positive territory but considering there were six disappointments in the last seven releases the probability is better for the same again. Especially considering the weak data lately. There is also US TIC data late in the day but I dont expect much baring a large miss in expectations again having a better chance to disappoint.
Have a great weekend
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