Weekly Report Monday 20th July 2015
Last trading week was defined by the following themes
- What Grexit?
- Greece and its creditors reach a deal on Monday and has subsequently been approved by the Greek and other EU parliaments, importantly Germany
- The crisis is diverted for now and risk appetite is back to the market, expressed through strong bounce in global equities and decline in safe havens currencies XAU and JPY
- Yellen signalling rate hike in 2015
- Yellen reiterated that the Fed can start the gradual rate hike cycle this year
- It is dependent on the data coming through with employment, inflation and retail sales all key to the Fed
- Strong US companies Q2 earnings
- US technology stocks are especially strong, with NASDAQ reaching record high
- Google was up 26% last week! An increase of almost 100 billion on market capitalisation.
- Commodities linked currencies (G10: AUD, NZD, CAD) are fragile
- AUD, NZD, CAD have declined nearly 10-15% since early May
- Last week, Bank of Canada surprised the market with a rate cut and weak data releases from NZ have further dampen the sentiment on the currencies
- AUD is facing headwinds with weak non-mining activity, China’s slowdown resulting in poor terms of trade and continued decline in commodity prices
- XAU is testing its 2010 lows at 1131 after China reported an increase in physical gold holdings, whether it continue downward from here or bounce is certainly one to watch
Data to look forward to this week:
Please check www.easy-forex.com/au/financialcalendar/ for full calendar and timing
- Tuesday: Reserve Bank of Australia minutes
- Wednesday: AU inflation data, RBA Governor Stevens speaking, Bank of England
- Thursday: Reserve Bank of New Zealand cash rate – the market is expecting a rate cut
Friday: China Markit Flash Manufacting PMI, German Flash Manufacturing PMI
Nasdaq 100 (CME) (U5) ST: key resistance at 4711.
Pivot: 4711
Our preference: Short positions below 4711 with targets @ 4259 & 4152 in extension.
Alternative scenario: Above 4711 look for further upside with 4796 & 4883 as targets.
Comment: As long as 4711 is resistance, look for choppy price action with a bearish bias.
Supports and resistances:
4883 **
4796 **
4711 **
4607 Last
4259 **
4152 **
4035 **
USD/SGD ST: the upside prevails.
Pivot: 1.34
Our preference: Long positions above 1.34 with targets @ 1.376 & 1.393 in extension.
Alternative scenario: Below 1.34 look for further downside with 1.3285 & 1.314 as targets.
Comment: The RSI calls for a new upleg.
Supports and resistances:
1.406 **
1.393 **
1.376 **
1.365 Last
1.34 **
1.3285 **
1.314 **
AUD/USD ST: the downside prevails.
Pivot: 0.7805
Our preference: Short positions below 0.7805 with targets @ 0.727 & 0.698 in extension.
Alternative scenario: Above 0.7805 look for further upside with 0.8165 & 0.8305 as targets.
Comment: The RSI is bearish and calls for further downside.
Supports and resistances:
0.8305 **
0.8165 **
0.7805 ***
0.7412 Last
0.727 *
0.698 **
0.6865 **