US Equities Get Pumped, USD Rises April 7, 2015
Easter Holiday Ends With Stock Jump With USD
In typical Bizarro fashion, when the US comes back from holiday while European markets are still away they pump up US equities beyond pre NFP figures in the new normal bad news is good because not only will the Fed not likely be raising rates but has even higher probability of dumping more QE on the market. Of course in any normal market situation we should see weakening of stocks and a drop in the USD but remember this is Bizarro world or more realistically the markets are pivoting between Bizzaro and the Real world on a regular basis. At least thats the most simple way to describe it but I have to admit its much more complicated than that. The shortest explanation I could give would reflect the Kieser Report Episode below as they discuss parts of the article I posted in the Live London session training room last week. If you would like to read the entire article the link is posted below the commentary.
EUR/USD Second Push Almost Fails
I say the EUR/USD has shown an almost failed second push because we cant be sure until it at least shows some conviction below the 1.0863 level. When I take a peek at the daily chart it dont surprise me that the 1.1032 level held yesterday with half the market participants still on holiday. Today I will be slightly bias for the next push up still but more open on direction considering the intraday push down. In short its going to take some strong conviction to break through that daily high and a first test rarely does it. The best level for a long is down at 1.0919 but if they widen the Asian range significantly the Asian lows have a better chance for a turn during London. Although the 1.0965 is valid for a short its a weak level and will depend on some conviction to hold price below the 4hr 200 so the safer short is from a retest of the 1.1032 level.
GBPUSD Head Fake, Intraday Push Down
At this point its best to remain open on direction on the GBP/USD. The reason is although there is more to support another intraday push down regarding the potential head fake and push down it will need serious help from the EG if they do run the EU upwards today. Otherwise its more likely to hold this range or we see the EU push down as well if they run price on the USD today. If I do see this early conviction hold above 1.4891 during London I will consider a long on the backside but a test of the Asian lows would be less risk. Otherwise the safer short would be from yesterdays highs even though the daily 1.4943 is valid, its weaker with the break yesterday.
EUR/JPY Runs Extended Push and Reversal
With the EUR/JPY making a fourth intraday push and reversing the entire thing yesterday the best trades will be at the extremes. The 131.26 will be where I look to short while watching the EU since if it breaks to the upside it will likely drag EJ with. Otherwise a long from 130.45 has the best potential for a move up.
Forex News Today
The calendar starts with medium impact Services PMI from Euro Zone countries that should only create some movement on big misses. Of which I doubt but its possible. Later the UK has its Services PMI that has much more potential so I will be looking for the typical set up the last couple hours before the release. Its expected to improve a bit so a disappointment below the last release should have a bigger move than a surprise upward but I will be trading the set up, not the news.
The US is slow with only Jolt Jobs which usually dont do much anyway.
Below is the link for the article mentioned above. Take note of the title, it says alot.
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