Top of the Risk Management Morning,
A lot of significant levels have been broken in the past few trading sessions and again this morning, when the 1.30-1.35 DNT option interest was taken out in the EUR/USD. This is a very significant level which we talked about last week when the EURO pulled back to 1.325. 1.35 is the 50% fibonacci retracement of the 1.50-1.20 fall and it is a psychological number aswell which traders take note of. To briefly explain DNT options and their significance in the currency market. They stand for Double-No-Touch. They are very popular with large central banks especially Asian central banks, and they help to contain a currency inside a range. For example a central bank with one of these options would buy Euro's at the low end of the range and sell at the high end of the range and vice versa. Sometimes they aggresively defend these options and they battled hard with this one but in the end the trend was too strong at it broke through early this morning, tripping stops and sending the Euro towards 1.3515. At month end when the option is about to expire there defense is generally stronger but it nothing is able to stop a strong trend and this was proven this morning.
The break in this level in the EUR/USD coincided with the USD/JPY breaking through a significant level of support and a previous trend line and the S&P 500 futures market breaking through 1500 level, which it had not done since 2007. The JPY weakness, Higher bond yields along with good earnings are driving the American stock market higher. We believe that the market will not correct until JPY strength comes back into the play. The Yen is very weak and oversold and this is allowing the carry trade to take place where Yen can be borrowed at zero percent interest and is being used to buy stocks, thus driving the market higher. The Yen is extremely oversold and will need to correct before going higher because markets never go in a straight line, when this happens the Stock market will take a breather and correct maybe 5% before going higher again.
The S&P 500 trades around 1509 at present and it won't encounter much resistance until 1530-1550 now, we are only 4% below all time highs and the market can see those levels in its horizon now. Support can be seen around 1500 and 1490. EUR/USD levels to look out for are 1.346 for solid support and offers will be seen at 1.353-5.
Some noteable news on the calendar today is ADP non-farmpayrolls at 13 15 GMT. These are an indicator for the big jobs report on Friday. US GDP is released at 13 30 today and the Minutes of the Federal Reserves FOMC meeting will be released at 19 15 tonight. Look for any hawkish tone to these minutes to see if Bernanke has any thoughts of stopping or slowing the Quantitative Easing program anytime soon, but the market thinks it very unlikely. Trade Well
Lowkey
Wednesday, 30 January 2013
Friday, 25 January 2013
Good Morning Traders......
Where do we begin this morning? We have to look at the FX market as we have seen the EUR making new highs across the board. The EURUSD has broken through the prior 1.34 resistance level at the time of writing the pair trades at 1.3438 all on the back of stronger then expected German sentiment data released at 9am this morning. We have seen an aggressive 'Risk On' sentiment return to the market with substantial gains across all asset classes at the closing bell yesterday here and in the US. Just to summarise levels at the time of writing:
$DOW 13873
$SPX 1498
$DAX 7820
$FTSE 6268
EUR/JPY 121.963
An interesting to point to note for $AAPL traders is that the correlation between the $SPX and $AAPL is beginning to decline, we have the $SPX taking on the 1500 level and $AAPL struggling to hold $450. If we have a close below $470 which looks very likely the up-trend from the 20098 low on a weekly chart will be breached and we could see a substantial sell off targeting the $400 level.
With the volatility we have seen during the morning session so far, we expect the market to take a breather before the US market participants enter the market. The RiskOn mentality should continue throughout the afternoon but traders should be aware that it is a Friday and we do expect to see some profit taking and large institutional investors taking some money off the table as the market is entering an overbought position on numerous time frames.
Happy Trading
@lowkeycapital
Where do we begin this morning? We have to look at the FX market as we have seen the EUR making new highs across the board. The EURUSD has broken through the prior 1.34 resistance level at the time of writing the pair trades at 1.3438 all on the back of stronger then expected German sentiment data released at 9am this morning. We have seen an aggressive 'Risk On' sentiment return to the market with substantial gains across all asset classes at the closing bell yesterday here and in the US. Just to summarise levels at the time of writing:
$DOW 13873
$SPX 1498
$DAX 7820
$FTSE 6268
EUR/JPY 121.963
An interesting to point to note for $AAPL traders is that the correlation between the $SPX and $AAPL is beginning to decline, we have the $SPX taking on the 1500 level and $AAPL struggling to hold $450. If we have a close below $470 which looks very likely the up-trend from the 20098 low on a weekly chart will be breached and we could see a substantial sell off targeting the $400 level.
With the volatility we have seen during the morning session so far, we expect the market to take a breather before the US market participants enter the market. The RiskOn mentality should continue throughout the afternoon but traders should be aware that it is a Friday and we do expect to see some profit taking and large institutional investors taking some money off the table as the market is entering an overbought position on numerous time frames.
Happy Trading
@lowkeycapital
Thursday, 24 January 2013
Breakfast Blog
Good Morning Traders,
The huge Story from Yesterday has to be the rotten Apple saga. A slight miss in earnings caused an after market sell off of over $50 billion. Before the earnings were delivered last night the stock popped to $527 before selling off to $457. This was an incredible move for such a small miss. Investors are panicking for a number of reasons including competitors, new products and Apple's increasing stockpile of cash which is around the $130 billion mark. We have found some interesting facts about Apple from Zerohedge:
The equivalent of the population of Spain bought Iphone's last quarter.
The after hours sell off in Apple was the equivalent to the Market Capitalisation of Morgan Stanley, which is one of the biggest Banks in the world, or the equivalent of Starbucks and Nike put together!
Apple also have enough cash in surplus to buy anyone of the 4 next biggest companies in the world!
These results may cause a risk-of sentiment when the U.S. opens today, with all eyes on Apple's share price movement. S&P 500 and Nasdaq will likely be weighed down by Apple if its Share price starts selling off. If looking for a long position we would advise entering a Dow Jones 30 position. Nasdaq is not in the DJ's index and this is index has been outperforming from positive earnings of its consumer stock make up.
Level's to look out for on the S&P 500, 1490 Downside then 1482 should hold, whilst 1500 topside may hold until we get another catalyst. Its still a buy the dips trade even though the Overbought RSI and Stochastics point to a correction.
Now to currencies, The FX market has started 2013 with great volatility, which is enabling FX traders to make great gains from the swings in price action. This was the case yesterday and today again. Yesterday we saw a 90 pip sell off in EUR/USD based on dollar strength and a few unfounded rumours. The EURO slipped from 1.335 to 1.3265. This gave any Euro bulls a great chance to go long and it quickly retraced most of its losses to close above the 1.33 handle. We entered a long position at this 1.3265 retracement and will be looking at a test of 1.3490 in the coming days or weeks. Until 1.325-65 is broken the EUR/USD is very bullish so go with the trend and buy dips.
Levels to watch out for our 1.328-9, a lot of bids will be here and topside of 1.337 through to 1.3405 will be scattered with offers. Sovereign names have been reported on the right hand side of the order book in the EUR/JPY cross and this should help the EUR/USD pair aswell.
Trade well! Lowkey
The huge Story from Yesterday has to be the rotten Apple saga. A slight miss in earnings caused an after market sell off of over $50 billion. Before the earnings were delivered last night the stock popped to $527 before selling off to $457. This was an incredible move for such a small miss. Investors are panicking for a number of reasons including competitors, new products and Apple's increasing stockpile of cash which is around the $130 billion mark. We have found some interesting facts about Apple from Zerohedge:
The equivalent of the population of Spain bought Iphone's last quarter.
The after hours sell off in Apple was the equivalent to the Market Capitalisation of Morgan Stanley, which is one of the biggest Banks in the world, or the equivalent of Starbucks and Nike put together!
Apple also have enough cash in surplus to buy anyone of the 4 next biggest companies in the world!
These results may cause a risk-of sentiment when the U.S. opens today, with all eyes on Apple's share price movement. S&P 500 and Nasdaq will likely be weighed down by Apple if its Share price starts selling off. If looking for a long position we would advise entering a Dow Jones 30 position. Nasdaq is not in the DJ's index and this is index has been outperforming from positive earnings of its consumer stock make up.
Level's to look out for on the S&P 500, 1490 Downside then 1482 should hold, whilst 1500 topside may hold until we get another catalyst. Its still a buy the dips trade even though the Overbought RSI and Stochastics point to a correction.
Now to currencies, The FX market has started 2013 with great volatility, which is enabling FX traders to make great gains from the swings in price action. This was the case yesterday and today again. Yesterday we saw a 90 pip sell off in EUR/USD based on dollar strength and a few unfounded rumours. The EURO slipped from 1.335 to 1.3265. This gave any Euro bulls a great chance to go long and it quickly retraced most of its losses to close above the 1.33 handle. We entered a long position at this 1.3265 retracement and will be looking at a test of 1.3490 in the coming days or weeks. Until 1.325-65 is broken the EUR/USD is very bullish so go with the trend and buy dips.
Levels to watch out for our 1.328-9, a lot of bids will be here and topside of 1.337 through to 1.3405 will be scattered with offers. Sovereign names have been reported on the right hand side of the order book in the EUR/JPY cross and this should help the EUR/USD pair aswell.
Trade well! Lowkey
Wednesday, 23 January 2013
BREAKFAST BLOG
Good morning traders. We have seen a very quiet start to the European session this morning as all eyes will be on Washington this morning as the US House of Representatives vote to suspend the countries borrowing limit also known as 'Kicking the can down the road' until May 19Th.
Last night after the close we saw $GOOG smashing its fourth quarter earnings, advancing the stock by nearly 5% in after-hours trading.
This gave a healthy boost to most US asset classes, we saw $DOW breach the significant 13,700 level which has proved as previous resistance the index reached a high on 13,754 but is currently off these highs at the time of writing. The $SPX also took a move to the upside testing 1,497 levels but failed to test the 1,500 level. We are all waiting to see if the 1,500 level can be broken but for traders it is important to note that it may struggle to break through this level on its first attempt but a slight pull back would provide a great buying opportunity and all traders should be looking to 'Buy On Dips' in the current market as long as the Fiscal Cliff remains in the background.
In the FX markets we have seen the Eur weaken against more of the major pairs over night and during the trading session yesterday. The EUR/USD is hoovering around the 1.3300 level and this should provide a base but if this level is breached 1.3200 could be the next target.
The EUR/JPY has seen a significant move to the downside and a fundamental retracement from its 1.20 highs, and it is look as though its going to test the 21 day moving average on the daily chart at 116.235. From traders trading the Eur the mindset should be 'Sell On Rallies'...
Just one thing to note $AAPL report earnings after the close today and this should have a significant impact on the US equity markets, a poor result could provide a nice buying opportunity.
Happy Trading
@lowkeycapital
Last night after the close we saw $GOOG smashing its fourth quarter earnings, advancing the stock by nearly 5% in after-hours trading.
This gave a healthy boost to most US asset classes, we saw $DOW breach the significant 13,700 level which has proved as previous resistance the index reached a high on 13,754 but is currently off these highs at the time of writing. The $SPX also took a move to the upside testing 1,497 levels but failed to test the 1,500 level. We are all waiting to see if the 1,500 level can be broken but for traders it is important to note that it may struggle to break through this level on its first attempt but a slight pull back would provide a great buying opportunity and all traders should be looking to 'Buy On Dips' in the current market as long as the Fiscal Cliff remains in the background.
In the FX markets we have seen the Eur weaken against more of the major pairs over night and during the trading session yesterday. The EUR/USD is hoovering around the 1.3300 level and this should provide a base but if this level is breached 1.3200 could be the next target.
The EUR/JPY has seen a significant move to the downside and a fundamental retracement from its 1.20 highs, and it is look as though its going to test the 21 day moving average on the daily chart at 116.235. From traders trading the Eur the mindset should be 'Sell On Rallies'...
Just one thing to note $AAPL report earnings after the close today and this should have a significant impact on the US equity markets, a poor result could provide a nice buying opportunity.
Happy Trading
@lowkeycapital
Tuesday, 22 January 2013
Afternoon Blog
Good afternoon Traders. We didn't have time for a Breakfast report this morning due to a highly volatile market fuelled from the BOJ's monetary policy decision last night and a number of rumours that were circulating Europe. The overnight conclusion of the BOJ's meeting and announcement of further Asset Purchasing caused a "buy the rumour swell the fact" move, with USD/JPY pulling back from its highs of 90.169 to eventually find support at 88.36. EUR/JPY initially spiked through the 1.20 handle but sold off considerably once Europe entered the market this morning. Rumours circulated about the resignation of ECB's Weidmann and German bank's profit warnings, with Deutsche's shares off by almost 3% mid morning. The EUR/USD sold off from 1.337 to 1.3266 in an aggressive manner before finding support. It followed the rapid decline of the DAX, at one stage off by 120 points. The spanner in the works was the release of the German ZEW Business sentiment at 10 a.m. which came in at a whopping 31.5 up from 6.9 in December and destroying Reuters estimates. This changed the mood to risk on immediately with the DAX recovering almost 100 points and the EUR/USD recovering almost 80 pips to sit at 1.3334 as I type now.
Levels to look at this afternoon are 1.34 EUR/USD topside and 1.326-8 on the downside, this has proved solid support. On the S&P 500 1474 is a solid bottom and topside 1491 may contain a breakout for now.
Google earnings are released tonight so a lot of traders may be waiting to see how they get on before taking a position for the rest of the week. On another note, just as I have typed this last paragraph UBS have downgraded Apple's outlook! So look at the Nasdaq to open down. Happy Trading!!
Lowkey
Levels to look at this afternoon are 1.34 EUR/USD topside and 1.326-8 on the downside, this has proved solid support. On the S&P 500 1474 is a solid bottom and topside 1491 may contain a breakout for now.
Google earnings are released tonight so a lot of traders may be waiting to see how they get on before taking a position for the rest of the week. On another note, just as I have typed this last paragraph UBS have downgraded Apple's outlook! So look at the Nasdaq to open down. Happy Trading!!
Lowkey
Friday, 18 January 2013
Breakfast Blog
Overnight we saw the Asian session make steady advances for the first time in three days. The main driving force behind this move to the upside was was the strong GDP reading out of the Chinese economy, the economy expanded 7.9% in the fourth quarter according to published government data last night. This data highlights the global growth recovery story and has given support to the rally that we have witnesses from the start of January.
We saw the Yen break through the psychological 90.00 level against the USD its lowest level in over 3 years, analysts across the board seem to be extremely bullish on the Japanese market on the back of the weaker Yen which will boost Japanese exporters earnings.
We saw the EUR/USD pair touch the 1.34 handle overnight but large sell orders at this level now have the pair back down at 1.33728 at the time of writing. The direction of the euro today we need to keep an eye on the EUR/JPY which is currently trading above 120, however this level on both weekly and daily charts is overbought which would suggest a correction may occur but we should wait and see if the rally continues or we see some profit taking at the end of the trading week.
In the US equity markets we had good data out of the us yesterday which helped indices take another leap to the upside. An Interesting level to note on SPX is 1474 any level above this will support the bullish rally, and it may act as a new floor going forward. The DOW broke through the 13600 level during yesterdays trading session however it failed to close above here which could be interesting to note.
I think we might see some profit taking alter on into the European close, and later on into the US close. All asset classes have made major advances this week and it would only natural to see some people taking some money out of the market and cashing in on profits.
Happy Trading
@Lowkeycapital
We saw the Yen break through the psychological 90.00 level against the USD its lowest level in over 3 years, analysts across the board seem to be extremely bullish on the Japanese market on the back of the weaker Yen which will boost Japanese exporters earnings.
We saw the EUR/USD pair touch the 1.34 handle overnight but large sell orders at this level now have the pair back down at 1.33728 at the time of writing. The direction of the euro today we need to keep an eye on the EUR/JPY which is currently trading above 120, however this level on both weekly and daily charts is overbought which would suggest a correction may occur but we should wait and see if the rally continues or we see some profit taking at the end of the trading week.
In the US equity markets we had good data out of the us yesterday which helped indices take another leap to the upside. An Interesting level to note on SPX is 1474 any level above this will support the bullish rally, and it may act as a new floor going forward. The DOW broke through the 13600 level during yesterdays trading session however it failed to close above here which could be interesting to note.
I think we might see some profit taking alter on into the European close, and later on into the US close. All asset classes have made major advances this week and it would only natural to see some people taking some money out of the market and cashing in on profits.
Happy Trading
@Lowkeycapital
Thursday, 17 January 2013
Breakfast Blog
Good Morning Traders, Yesterday was another Up and Down day in the Stock exchange, Selling off in the Morning and then rallying all afternoon until the close when it failed to make a new high and sold off. The S&P 500 has been ranging between 1465 and 1475 in a controlled manner but does not have a macro stimulus to create a breakout that all traders are waiting for. This will not continue for long, The market is too high and overbought and a correction is only a matter of time.
Apple was the out performer of the day, Up 4% or $20 to close above the $500 mark. This helped drag up the Nasdaq and the S&P 500. Boeing was the notable under performer of the day, down 3.5% after more problems with their new Airplane the Dreamline and weighed down the Dow Jones 30.
From a currency perspective Yesterday the EUR/USD had no fundamental driver and drifted in line with the Equity markets in a range from 1.326- 1.333. Just as I type the pair has broken out higher and sits at 1.335. Market talk is their is notable corporate sellers between 1.335-70, this may cap the upside for now, but the Euro does seem bullish and we believe that their is definitely more room to the topside. A near term target we are looking at is 1.3490, This was the 2012 high and is the 50% fibonacci retracement of the 1.50-1.20 fall in the EUR/USD and we can guarantee that 90% of Euro bulls will be looking to take some profit here on any long trades.
A quite day on the European data calendar, with the only potential market moving news is 2 bond auctions from Italy and Spain. On the other side of the pond we see Initial Jobless claims at 13 30 and Philly Fed Manufacturing at 15 00. Some levels to look out for are 1475 to 1465 on the S&P 500. On a EUR/USD 1.324-6 looks like very solid support and 1.335-70 is initial resistance on the topside.
USD/JPY has continued its parabolic upward move and looks a buy the dip trade on any pullback.
Good luck in the Markets!
Apple was the out performer of the day, Up 4% or $20 to close above the $500 mark. This helped drag up the Nasdaq and the S&P 500. Boeing was the notable under performer of the day, down 3.5% after more problems with their new Airplane the Dreamline and weighed down the Dow Jones 30.
From a currency perspective Yesterday the EUR/USD had no fundamental driver and drifted in line with the Equity markets in a range from 1.326- 1.333. Just as I type the pair has broken out higher and sits at 1.335. Market talk is their is notable corporate sellers between 1.335-70, this may cap the upside for now, but the Euro does seem bullish and we believe that their is definitely more room to the topside. A near term target we are looking at is 1.3490, This was the 2012 high and is the 50% fibonacci retracement of the 1.50-1.20 fall in the EUR/USD and we can guarantee that 90% of Euro bulls will be looking to take some profit here on any long trades.
A quite day on the European data calendar, with the only potential market moving news is 2 bond auctions from Italy and Spain. On the other side of the pond we see Initial Jobless claims at 13 30 and Philly Fed Manufacturing at 15 00. Some levels to look out for are 1475 to 1465 on the S&P 500. On a EUR/USD 1.324-6 looks like very solid support and 1.335-70 is initial resistance on the topside.
USD/JPY has continued its parabolic upward move and looks a buy the dip trade on any pullback.
Good luck in the Markets!
Wednesday, 16 January 2013
Breakfast News
Good Morning Traders. Overnight during the Asian session we saw The Nikkei 225 slide by the most in eight months, this mood slipped into the Chinese market with shares sliding there for the first time in three days. From a technical perspective the MSCI Asia Pacific RSI reached a value of 75 yesterday, any level above 70 is considered as a sign that the market is overbought. The Yen has also begun to make gains against some of the currency pairs over the last few days after the Japanese Policy makers stated that they would like to see the USD/JPY around the 89.00-88.00 level.
Overnight we saw the EURUSD remain stuck in a tight range, the pair reached a high of 1.33200 but at the time of writing it sits at 1.32877. From a technical perspective the psychological 1.33 level has been breached, if we fail to get back above this level we could see the pair make its way back toward 1.30-1.31 levels.
The mood is the market this morning looks to have changed, US Equity Futures are in the red this morning (DOW -.25%, SPX -.27%). Failure yesterday to make new highs in the SPX yesterday and the change of mood in the EURUSD pair may flag to some traders that the New Year rally may in fact have run its course. Today is a big day on the earnings calender with some of the large US banks reporting ( JP Morgan, Goldman Sachs, Bank of New York) so profit taking ahead of these releases would not be surprising.
We have seen Apple break the major $500 technical support level that had held for the past month, that level is now in the past as Apple sits at $485 in the pre-market with $420-400 as next targets. Be aware that if you are trading the SPX Apple accounts for 3% of the index and if you have an interest in the NASDAQ in accounts for 10% of the index.
Bulls beware, its looks like the bears may have entered the market.
Happy Trading
@lowkeycapital
Overnight we saw the EURUSD remain stuck in a tight range, the pair reached a high of 1.33200 but at the time of writing it sits at 1.32877. From a technical perspective the psychological 1.33 level has been breached, if we fail to get back above this level we could see the pair make its way back toward 1.30-1.31 levels.
The mood is the market this morning looks to have changed, US Equity Futures are in the red this morning (DOW -.25%, SPX -.27%). Failure yesterday to make new highs in the SPX yesterday and the change of mood in the EURUSD pair may flag to some traders that the New Year rally may in fact have run its course. Today is a big day on the earnings calender with some of the large US banks reporting ( JP Morgan, Goldman Sachs, Bank of New York) so profit taking ahead of these releases would not be surprising.
We have seen Apple break the major $500 technical support level that had held for the past month, that level is now in the past as Apple sits at $485 in the pre-market with $420-400 as next targets. Be aware that if you are trading the SPX Apple accounts for 3% of the index and if you have an interest in the NASDAQ in accounts for 10% of the index.
Bulls beware, its looks like the bears may have entered the market.
Happy Trading
@lowkeycapital
Tuesday, 15 January 2013
Breakfast Blog
Good Morning Traders, Yesterday was a rather Whimsical day in the Stockmarket. With President Obama making his last speech of his first term and Ben Bernanke making his first speech of 2013 the Market was in rather wait and see mode ahead of any possible comments on the Debt Ceiling or Large scale asset purchases(QE). Both failed to deliver anything Market moving on either of these topics and the S&P 500 was stuck in a 7 point range all day.
The continuing rotten Apple saga continues with Apple's share price trading below $500 in the Pre market and in trade briefly yesterday. A 25% loss of share price in 3 Months since its September highs of $700.
Apple has been weighing down the Nasdaq and the S&P 500 in the last 2 trading sessions with the Dow Jones 30 the Notable outperforming Index, With investors diving into Consumer stocks. A clean break of $500 for apple could see a sell off in all equity indices as the market will become very nervous about the future growth of the worlds leading company.
Moving onto Currencies the story of the day was the EUR/CHF breaking out of its deadzone/ceiling that the SNB had imposed in 2012 to stop the rapid appreciation of the Swiss Franc. In the last week the Swissy has risen from under 1.21 to 1.239 with investors more optimistic about the Euro's future.
The EUR/USD was quiet yesterday after its hectic last week, Selling off in the morning before Rallying into Bernanke's speech.
Level's to watch out for today are 1.334 on the downside and 1.34 topside. The S&P 500 has been ranging and needs a catalyst to break out of it 1466-1475 range. Maybe the Retail Sales report at 13 30 today?
We will wait and see!
Happy Trading
The continuing rotten Apple saga continues with Apple's share price trading below $500 in the Pre market and in trade briefly yesterday. A 25% loss of share price in 3 Months since its September highs of $700.
Apple has been weighing down the Nasdaq and the S&P 500 in the last 2 trading sessions with the Dow Jones 30 the Notable outperforming Index, With investors diving into Consumer stocks. A clean break of $500 for apple could see a sell off in all equity indices as the market will become very nervous about the future growth of the worlds leading company.
Moving onto Currencies the story of the day was the EUR/CHF breaking out of its deadzone/ceiling that the SNB had imposed in 2012 to stop the rapid appreciation of the Swiss Franc. In the last week the Swissy has risen from under 1.21 to 1.239 with investors more optimistic about the Euro's future.
The EUR/USD was quiet yesterday after its hectic last week, Selling off in the morning before Rallying into Bernanke's speech.
Level's to watch out for today are 1.334 on the downside and 1.34 topside. The S&P 500 has been ranging and needs a catalyst to break out of it 1466-1475 range. Maybe the Retail Sales report at 13 30 today?
We will wait and see!
Happy Trading
Monday, 14 January 2013
Breakfast Blog
We have seen a continued move to the upside during the Asian Trading session, most asset classes moved higher as a result Charles Evans (Federal Bank Of Chicago President) speech in which he reiterated the fact that the Fed will continue to support the economic recovery in the US.
In the FX market we have seen EUR/USD continuing its strong rally off the back of Thursdays ECB's meeting. The pair broke through the 1.3400 level overnight but at the time of writing we are back at 1.33545 as a direct result of profit taking. With no significant news due out this morning all eyes will be on today's option expiries to dictate the direction on the pair (1.3300,1.3350, 1.3400).
Overnight the USD/JPY reached highs as 89.67 but we have seen the pair retreat back to 89.404 since the opening bell in the European market. If we see a clean break of the 89.00 level the next resistance falls at 92.89.
In the Equity markets we have seen both US Equity Indicies retrace off their highs from the Asian session. $SPX reached a high of 1,475.50 and analysts are targeting 1,500.00 in the coming weeks. The $DOW broke through 13,500 and looks to be targeting 13,600-13,700. The Fiscal Cliff has slipped into the background over the past week, but investors should be weary that we are in Earnings Season and this week will see some of the 'Big Banks' post their earnings, so keep it simple and buy the dips until we encounter any bad news.
Happy Trading
In the FX market we have seen EUR/USD continuing its strong rally off the back of Thursdays ECB's meeting. The pair broke through the 1.3400 level overnight but at the time of writing we are back at 1.33545 as a direct result of profit taking. With no significant news due out this morning all eyes will be on today's option expiries to dictate the direction on the pair (1.3300,1.3350, 1.3400).
Overnight the USD/JPY reached highs as 89.67 but we have seen the pair retreat back to 89.404 since the opening bell in the European market. If we see a clean break of the 89.00 level the next resistance falls at 92.89.
In the Equity markets we have seen both US Equity Indicies retrace off their highs from the Asian session. $SPX reached a high of 1,475.50 and analysts are targeting 1,500.00 in the coming weeks. The $DOW broke through 13,500 and looks to be targeting 13,600-13,700. The Fiscal Cliff has slipped into the background over the past week, but investors should be weary that we are in Earnings Season and this week will see some of the 'Big Banks' post their earnings, so keep it simple and buy the dips until we encounter any bad news.
Happy Trading
Friday, 11 January 2013
Now Yesterday was a TRADING DAY! What an active market we had, Draghi sent the euro soaring as he erased expectations for the ECB to cut rates, saying the decision was unanimous. Once the momentum got rolling, it was unstoppable with the euro rising more than 200 pips. S&P 500 closed at a 5 year high of 1472 up 0.8% on the day. To add fuel to the fire, the Japanese Prime Minister Abe says the BOJ is to target Unemployment, which sent the JPY tumbling against all pairs. The USD/JPY has taken out the 89 Figure and has 90 firmly in its sites, as I type the price action is just above the 89 handle. The Euro led whilst the JPY lagged yesterday so the 350 pip spike through the 200 week moving average is no surprise, this pair looks like an express train heading at the moon. Up 1800 pips in under 2 months, surely this has to correct soon? I would heavily advise against, there is no sign of any decent pullbacks, its a buy the dips trade at the moment.
What's in store for today?
The data calendar is very sparse today, with only an Italian Debt auction this morning.
Some of the levels to look out for on the EUR/USD are 1.325 for small bids, and further down to 1.321 where there is reported real money and sovereigns on the Ride hand Side of the Order book. Topside you have to look at the obvious psychological 1.33 level, which maybe tough to clear today considering the Euro's rally yesterday.
A pullback to 1.32 before going higher and taking out the 2012 highs could be a medium term target for the EUR/USD. A rally above 1.35 might be unsustainable with Europe's Macro outlook.
Moving onto Equities, 5 year highs on the S&P 500 and a close of 1472, the market has completely forgotten all the ongoing Fiscal Cliff problems and pushed higher, up 3.2% for this year already. Coming into Earning season's a pullback could be inevitable. Support on the downside near term can be seen at 1461 and 1450 whilst there may not be a lot of resistance until 1490, what will be the catalyst to bring us there? As I type the market has pulled back a few points with a quiet morning in prospect.
Happy Trading follow us at @lowkeycapital
What's in store for today?
The data calendar is very sparse today, with only an Italian Debt auction this morning.
Some of the levels to look out for on the EUR/USD are 1.325 for small bids, and further down to 1.321 where there is reported real money and sovereigns on the Ride hand Side of the Order book. Topside you have to look at the obvious psychological 1.33 level, which maybe tough to clear today considering the Euro's rally yesterday.
A pullback to 1.32 before going higher and taking out the 2012 highs could be a medium term target for the EUR/USD. A rally above 1.35 might be unsustainable with Europe's Macro outlook.
Moving onto Equities, 5 year highs on the S&P 500 and a close of 1472, the market has completely forgotten all the ongoing Fiscal Cliff problems and pushed higher, up 3.2% for this year already. Coming into Earning season's a pullback could be inevitable. Support on the downside near term can be seen at 1461 and 1450 whilst there may not be a lot of resistance until 1490, what will be the catalyst to bring us there? As I type the market has pulled back a few points with a quiet morning in prospect.
Happy Trading follow us at @lowkeycapital
Thursday, 10 January 2013
LowKeyCapital Breakfast Report Thursday 10/01/2012
LowKeyCapital Breakfast Report Thursday 10/01/2012
LowKeyCapital Signal: Bullish (Cautious)
Overnight we have seen a significant move to the upside in US and European equity classes, this comes on the back of positive Chinese export data (+14.1%) which beat economists expectations and signals stabilisation in the chinese economy. We currently see US equity futures in the green with the DOW trading above the significant 13,400 level and SPX trading at 1,463.68. In terms of the FX market we have seen the EUR pair back some of its losses yesterday against some of the major currencies, continued EUR strength going into the ECB meeting in Frankfurt today (EURUSD 1.30686, EURJPY 115.326 EURGBP .81602).
We expect the morning session to be reasonably quiet as all eyes will be on EBC President Mario Draghi and the EBC Policy meeting this morning. Market expectations have cooled since the last ECB meeting in December and we do not expect an interest rate cut decision this morning. Economic data as improved since the December and it would make sense for the ECB to remained sidelined for the present time and Draghi to replicate his dovish stance laid out in his previous post-meeting press conference.
We will then be switching over to the US as Labour Department Figures (Initial Jobless Claims) are due out at 1.30pm analysts are looking for a figure around 365,000 from 372,000 last week if correct this should help US equities into the opening bell, but it is interesting to note that these figures tend not to have any major influence unless the actual figure is a big miss.
In conclusion the market look like it wants to go higher in the short term, and it will be interesting to see if Draghi sticks to his game plan this morning. Due be aware that across the water we are in earning season and results tend to surprise the markets. We remain bullish in the short term across European and US Indicies, but cautious to the potential correction phase that we have yet to experience.
For all your daily trading updates find us @loekeycapital
Happy Trading
LowKeyCapital Signal: Bullish (Cautious)
Overnight we have seen a significant move to the upside in US and European equity classes, this comes on the back of positive Chinese export data (+14.1%) which beat economists expectations and signals stabilisation in the chinese economy. We currently see US equity futures in the green with the DOW trading above the significant 13,400 level and SPX trading at 1,463.68. In terms of the FX market we have seen the EUR pair back some of its losses yesterday against some of the major currencies, continued EUR strength going into the ECB meeting in Frankfurt today (EURUSD 1.30686, EURJPY 115.326 EURGBP .81602).
We expect the morning session to be reasonably quiet as all eyes will be on EBC President Mario Draghi and the EBC Policy meeting this morning. Market expectations have cooled since the last ECB meeting in December and we do not expect an interest rate cut decision this morning. Economic data as improved since the December and it would make sense for the ECB to remained sidelined for the present time and Draghi to replicate his dovish stance laid out in his previous post-meeting press conference.
We will then be switching over to the US as Labour Department Figures (Initial Jobless Claims) are due out at 1.30pm analysts are looking for a figure around 365,000 from 372,000 last week if correct this should help US equities into the opening bell, but it is interesting to note that these figures tend not to have any major influence unless the actual figure is a big miss.
In conclusion the market look like it wants to go higher in the short term, and it will be interesting to see if Draghi sticks to his game plan this morning. Due be aware that across the water we are in earning season and results tend to surprise the markets. We remain bullish in the short term across European and US Indicies, but cautious to the potential correction phase that we have yet to experience.
For all your daily trading updates find us @loekeycapital
Happy Trading
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