T-Minus 2 days : MOAR QE

Dollar Index

Dollar is consolidating well ahead of this coming Thursday ECB meeting. This week hosts many important central bank speakers – jawboning is part and parcel of the process. Sell-off on the dollar at the beginning of the month looks like profit taking after the false breakout. Dip buying remain the strategy but we are wary (as addressed in our weekly report) what other fundamentals are there post ECB and FOMC meetings for a strong dollar?

Daily

4 hour

German Bunds

Do not fight with central banks! The trend continue to point for higher prices and dips are bought. Daily chart shows that bunds have reached a critical resistance area where it rejected a move higher for the 3rd time. Experience says, there is seldom a 4th time charm. In the short term, we need a solid break and close below 157.00 otherwise a blow off top at the daily Bollinger band can offer the opportunity to sell.

Daily

4 hour

Euro

Since there is no new sellers below 1.055, the Euro rebound and shorts are covering some of their positions. Mind you, sellers remain in control but a short relief bounce is expected. Buy the rumour sell the fact is at play – certainly one to watch as we head to ECB press conference. Failure to break 1.055 by this week could send the Euro bouncing higher.

Daily

4 hour

German Dax

Stronger Euro and dollar weakness – risk off sentiment kicks in and the German Dax has been struggling all morning to break above 10400 levels. This level also sits with confluence of resistances and a pullback from here to close gaps below is still viable. Initiating a short before ECB is a big risk thus thread carefully here.

Daily

4 hour

 

 

 

 

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