Trader Talk

Daily Trader Talk – Thursday 20^th July.

What Happened on Wednesday > Top 3?

> AUD on a tear higher

> Euro Holding above 1.1500 leading into ECB

> Gold consolidates & Oil Higher on Inventories data

Outlook

+ AUD Jobs Data

+ Bank Of Japan

+ ECB Rate Announcement & Press Conference

Data & Event Risk Today?

• (AUD) Aussie Jobs Data– 11.30am Sydney.
• (JPY+) BOJ Monetary Policy announcement– Tentative 2/3pm Sydney.
• (EUR+) ECB Rate announcement & Press Conference – 9.45/10.30pom Sydney

USDX: 94.55

The Dollar Index bounced back a little yesterday which was to be expected after such a sharp move on Tuesday.

The chart on the 4 hourly still looks heavy and lower lows likely in store unless next week’s USD tier 1 data is better.

USDJPY: 111.80

Dollar-Yen showed signs of softness after a pretty quiet trading range on Wednesday.

For the most part, the price action hung around 112.00 but it did get Offered down to lows of 111.55 in the London session before getting back to 111.85.

Bank Of Japan is very likely to stand pat today which may be Yen negative so a move back to 112.50 is just as possible as a move to 111.

EURUSD: 1.1530

Euro still holding most of the recent gains leading into tonight’s ECB decision & press conference.

Almost all analysts agree that Mario Draghi will very likely have to talk the Euro down from these recent high levels. Moreover, most traders are expecting a retracement lower tonight, followed by BUYERS stepping in afterwards.

It is a good opportunity to wait for the initial knee-jerk moves & whipsaws to occur, then to follow the trend (buying) in the aftermath.

Look for whipsaws lower and then potential moves towards 1.1600.

GBPUSD: 1.3030

Sterling traded in a tight trading range, drifting between 1.3020 and 1.3060.

After this week’s wild moves which were dominated by the softer Inflation data for the GBP we may see a quiet end to the week for Sterling as the attention shifts to Euro, Yen & CAD.

AUDUSD: 0.7965

The Aussie dollar has been on a tear, smashing to a 12-month high against the Greenback.

In 45 minutes, we get the Aussie Jobs report and this will be pivotal for a move above 0.8000 or a sharp pullback.

I prefer to stay with the trend on this trade and be LONG looking for moves higher still.

NZDUSD: 0.7365

The NZD is back to its familiar 7360 price level in a restrained trading range yesterday.

The AUDNZD is a more interesting pair at the moment, finding a good base above 1.0800 and ripe for a continuation higher towards 1.1000.

That trade will play out shortly once we see the Unemployment & new Jobs data for Australia.

USDCAD: 1.2598

USDCAD traded under 1.2600 in another move lower in the US session following the Oil Inventories data – which propelled Oil buying (and CAD buying).

USDCAD has traded ridiculously lower in the past 5 weeks on the back of the triple forces of Soft USD, CAD rate hike & Oil price recovery.

VIX: 9.79

Volatility Index holding lows and relatively unchanged overnight.

Not much else to say except that this will break out soon and when it does we will see it in a big wave across the Equities markets & major FX pairs.

GOLD: $1,240.30

Gold made it to $1,243 highs before a small retreat in the US session to close off at 1240.

The $1,250 level to almost certain to come up but a gradual grind higher most likely now that the attention shifts away from the USD until next week.

Oil (WTI): $47.40

Oil was Bid higher to 47.50 as I called, on the back of Inventories data.

A grind to $48 will inevitable happen and then we may take a run at $50 once again.

Macro Themes in Play

• ECB Likely to want to slow down the EURO rally, traders await keep language in Draghi’s Press Conference.
  • Aussie Dollar rips higher and looks like easily taking out 80c

++Markets are looking to the ECB & BOJ for the next big sentiment drivers.