Lots of US and EZ data today… Play it safe look for trend development.


Today there will be a heavy round of event risk from Japan, Euro Zone and US. We already had the BOJ announcement which saw no change in policy, the yen is up a bit across the board going into the Euro session (6:00 GMT). Soon we have German Unemployment Rate and Change (7:55 GMT) followed by EZ CPI at 9:00 GMT. Later on we have Canada and US GDP followed by FOMC meeting.

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Here is a list of the major events today, times are in GMT

Entire calendar here from dailyfx.com

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GBP/AUD looks good for a possible head and shoulders break out with downward continuation, we have entered short.

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AUD/USD looks like it may have topped 3 weeks ago and should continue to trend lower. The Australian economy is lagging, with CPI coming in weaker than expected last week which will put pressure on the RBA to act if things to not improve.

For now we are holding short, it is trading just below the 0.236 fib which is at 0.927 so the next target would be 0.382 fib around 0.915.

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GBP/USD is currently trading near highs for the day, we are looking at a possible trend continuation on the back of some GDP data. If the market is pleased with the data we could possibly see 1.70 in the near future. However some caution should be applied due to the fact that we have a heavy amount of US data this week as well.

For now we are flat.

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More on GBP/USD here

NZD/USD is currently trading near lows for the day (7:00 GMT), NZD/USD has fallen even after the RBNZ hiked rates 25bps from 2.75% to 3.00%. There is always the possibility for further downside until we break out of this downward RSI trend. Major support is market by the long term 0.236 fib at around 0.85. Look for a bullish RSI break for possible NZD/USD continuation higher.

For now we are holding a small long.

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More on NZD/USD here

USD/JPY has been able to break out of this triangle again however it could fall back below easily. Caution should be seen USD/JPY is facing some near term trend line resistance dating back to the beginning of 2014. RSI is sitting right above neutral 50 on the daily chart. Look for 102.2 and 101.9 for possible support and 103 for resistance. The fact that the BOJ may not add any more QE to their already large stimulus program is putting some speculation that we could see a move lower soon.

If we break down below the trend line this week we could see 100 soon which would see a lot of support. Right now it makes more sense to be short since we are closer to the top down trend line of the triangle pattern. If we see a maintain in tapering USD/JPY could get a temporary boost but if NFP under performs market expectations then we could still see a trend line break.

We are currently flat.

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More on USD/JPY here

USD is facing some resistance near term, reaction low resistance and down trend resistance may prevent further USD strength for the time being. USD could possibly rise this week on a continued taper and very good data. Expectations are very high for the USD and this is leaving us with a cautious outlook for the time being.

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Gold has dropped back below $1300 and could face a new wave of selling. Gold is currently trading around $1293 (7:10 GMT).

SPX500 has failed to fall much further as market sentiment is currently very bullish, we could possible see new all time highs this week. If we are unable to press above all time highs there is a risk of steeper declines.

I have added an overlay of Gold to the SPX500 to prove a point that the two are not always inversely correlated. Last month Gold has been pretty correlated vs the SPX500, maybe on possible bubble or market top fears but has dropped off recently…

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