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Fundamental Archives |
Written by Saxo Bank |
Jul 13 10 08:56 GMT
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It's All About Dotting The I's And Crossing The T's
We start the morning with Moody's downgrading Portugal's rating down to A1 with a stable outlook and washing out some very insignificant longs in the EURUSD taking out 1.2550 and stops below 1.2540 trading us down to a low of 1.2525 on the move. The market however bounces back fairly well from this and while we are in the midst of the reporting season and equities retain their strength the move higher in the EURUSD isn't complete just yet. On the day I'm a buyer for choice in the cross and look for 1.2525/30 to hold with stops going in below 1.2505 looking to target a grinding return into 1.2580.
Overnight we had a serious sell off in the Asian indices led by Shanghai on the back of unconfirmed rumors doing the rounds in the market about further tightening in the Chinese housing and lending markets. But as is often the case with rumors, they amounted to nothing and the index came back somewhat on the close. Needless to say that the earlier overnight sell off in the JPY and a strengthening in JPY crosses came back and we pretty much finished the session in the same fashion as we started it. Otherwise we had Alcoa reporting last night after the US close and while the result was better than expected (0.13 against 0.11) this did little other than to just give the futures a prop rather than a surge higher. As written yesterday I believe that this reporting period will do little more than give the market a prop before liquidity and rationality return into the market whereby we should see a continuation of the correction and retracement lower.
On the day we are data heavy with June CPI for the UK out along with the Euro zone ZEW index as well as the US trade balance.
My positioning on the crosses remains unchanged and I look to continue playing in somewhat well defined ranges.
In the AUDUSD I fade rallies into 0.8770/80 and take back shorts into initial support around the 0.8680 level.
The EURUSD as mentioned above will continue to be bid for the time being and I play it accordingly.
On the Cable, well I'm still short and believe that this morning's CPI data could be the catalyst for a more serious attempt (and break) of 1.4950.
The USDJPY is just simply boring and still has a tough time near the 89.30 level, so for the time being I still sell rallies. |
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