- Baidu announced a 12 months buyback programme worth 1 billion
- Asian shares tipped higher on the back of dovish Fed statement
- Cost cutting seasons with Shell and Centrica on the headline
- Nokia in surprise profit
- Australia building approvals m/m came worse than expected -8.2
Outlook: Post FOMC dovish statement, US GDP forecasted to come in better than expected
Biased: End of the month book squaring – positioning for a possible rate hike tantrum into August?
- Turnaround dollar despite dovish statement – found support and held – Dollar remains king
- Commodities currencies continue to suffer the headwinds
- Yen weakness continues – helped Japanese exports favourable – Nikkei agrees
Outlook: Opportunity for a rate hike by Miss Yellen put into question but most likely a September hike
Biased: Expect US GDP to create market volatility as we approached end of the week
- Given Euro weakness, Bunds continue to enjoy higher prices. However, we are threading into potential resistance on the Bunds and a long Euro trade is viable soon
Outlook: Break above 154.22 will be impressive but watch out for daily ma resistance at 100 and 200. In addition, we have 50% fib retracement confluence in that area.
Biased: Bunds look exhausted after an impressive run higher that we envisaged but there are rooms higher still
- We have had a retest of lower low on several commodities
- Various commodities reached oversold territory but without any sign of reversal – rallies are selling opportunities
Outlook: Watch the dollar index closely for clues while commodities continue to struggle
Biased: Rallies continue to be selling opportunities
Dollar found support at 20 ma after the kneejerk reaction at 12063 – watch that the RSI is diverging after dollar hit resistance and has made lower low and lower high. Is this a potential sign of a topping pattern?
The lower timeframes on the Bund suggest short term weakness ahead of resistance. Can it break above previous high of 154.22? Possible yes and break higher to 50% fib and 200 ma coming in as confluence where we look to setup a short.
Lack of global demand and potential tightening in the US does not help Copper prices. Power house such as China continue to struggle. Only a break above the orange downtrend line will give buyers some confidence. Otherwise, sellers continue to dominate the copper market.
Dax filled up previous gaps as envisaged in our write up – post Greece Euphoria – Chinese stimulus – concern about rate hike have all been priced in. Current chart setup shows a bearish wedge and a retest of 200 ma is in the cards. We will not rule out a retest on the lower BB line. Resistance stands at 20 ma and the 50% fib from last week high to this week low.