Breakfast Blog

Good Morning Traders,
After Mondays volatility the Market decided to take yesterday off. The EUR/USD was trapped in a range between 1.312 and 1.304, The S&P 500 ranged between 1485 and 1499, but was unable to crack 1500 and sold off into the close to finish at 1495. Bernanke's speech was worded extremely consistently with the Fed's policies and initially caused a spike lower in risk but then a monster Gold Buyer came in at 1585 and pushed it to session highs of 1620 to give gold its best daily gain since January. All in all his testimony may have been slightly more dovish then the market expected but no extreme dollar weakness was seen.
A point of note for anyone new to trading is when Bernanke is speaking the best option generally is to sell the Dollar against a foreign currency and buy Gold because he is a known dove and the markets perception is he wants to continue the Quantitative Easing Program.
This morning the Euro had a slight pop from better then expected Eurozone data and an Italian BTP auction that went well, the Euro spiked to 1.3120 but was capped by Asian Sovereign's selling into the rally and the euro whipsawed back to 1.308. Trading at 1.309 as I type. Everytime the EUR/USD has spiked over 1.31 it has been hammered back down and we believe a sell any rally strategy is the most appropriate to adopt as we await more fundamental data. Technically all the risk is on the Downside.
This afternoon we see Durable goods sales from the States and Home Sales, These are at 13 30 and 15 00 GMT respectively. Levels to look out for on the S&P 500 are 1499 topside and 1501(200 Day MA on 4 Hour chart) and 1485 on the downside. Keep stops tight as it is month end and markets can be illiquid and volatile. Trade well. Lowkey