Good Morning Traders
Yesterday we saw trading adopting its usual rhetoric of a struggling European session followed by an aggressive US session. For the large part of the European session we saw all asset classes struggle to make moves to the upside and US futures started the day in the negative. It wasn't long before we saw the 'Buy the Dips' mentality across the market and the equity markets moved higher testing the previous highs. The Dow was trading above the 14700 handle and the SPX trading above the 1570 handle. Coupled with this move to the upside we saw US Dollar weakness and there were some big swings in the FX market with the US dollar losing ground against some of its major pairs.
As we noted on Monday we are now in earnings season in the US and so far so good earnings have beaten analysts expectations. There was a slight cause of worry for investors as 75% of the companies listed in the SPX had revised a negative earnings outlook, and it was seen as an opportunity to take some money off the table and lock in some profits. While some saw this as an opportunity to take money off the table we have seen continued pressure from retail investors who have missed out on the big equity moves to enter the market. This is a particularly dangerous game entering at these levels as we have come a long way in a short space of time and there are calls for a 5-10% correction over the coming weeks. I don't think that earnings in the US have enough power to be the catalyst for this correction we would need something a bit more substantial to get the correction under way, maybe some developments from North Korea or some significant data from the EU, until that happens we should continue to ride the wave created by the FED and as long as they keep their finger on the button markets will inevitably move higher.
Today the FED will release minutes of its March meeting when policy makers left the pace of bind purchases unchanged.
In the FX market we saw all the real volatility yesterday. The EURUSD pair traded down around the 1.30 handle during the European session but we saw the pair moving higher and tripping stops now trading above the 1.31 level. There is said to be significant orders above the 1.31200 level so a push through here could see an aggressive short squeeze.
In terms of the EURJPY pair we have seen the 130 level taken out, just to put into context the pair was trading down at 119 just seven trading days ago, the continued JPY weakness off the back of Kuroda's aggressive monetary easing campaign. The USDJPY is doing its best to take on the 100 figure but it has come into some large barriers around the 99.45 level but we do expect to see the 100 handle breached during the trading week.

Happy Trading
@lowKeyCapital