Daily Insight; Markets Await NFP, European Crisis Not Yet Over?
Matt Simpson | Jan 10, 2014 03:20AM ET
Market Snapshot:
EUR: The ECB reiterates the need for historical low interest rates as Draghi states it is still too early to assume the Eurozone crisis is over. Draghi's comments contradict Barroso's prediction that the Eurozone would be out of the crisis by 2014.
GBP: BoE continue 'as per usual' by keeping the Asset Purchase Facility fixed at 375bn per month and interest rates at 0.5%. 3 of the top retails stores within UK reported disappointing Christmas sales; however this diverges from stores which have a stronger online presence.
USD: The markets eagerly await NFP later today. USD/CAD hit our interim target of 1.086 yesterday and has now stalled beneath this level. A break above 1.086-88 could be significant for the pair as highlighted in yesterday's analysis.
KIWI DOLLAR: Taking a breather before resumption of Gains?
You'll notice today the common theme is NZD. This is simply because it has been the strongest currency of the week (and year so far) and appears to be taking a breather before a suspected resumption of the uptrend.
That said we are heading into Friday, which is also NFP day. Therefor my preferred approach is to monitor these into Monday to see if you can achieve a safe entrance.
NZD/CAD: Forming Bullish Pennant?
Whilst it is too soon to declare a pennant shape, I have favoured this potential pattern because we are trading between Monthly R2 and Weekly Pivots. Add to the mix today's NFP and I see potential for price to form a minature triangle shape before volatility returns.
I favour the bullish breakout simply becuase Kiwi is the strongest currency this week and CAD is by far the weakest (across the board).
NZD/JPY: Within established uptrend with room for another high
The projected target is approximately twice the daily range of candles produced this week, so if you prefer not to jump in before the weekend or NFP, you may be able to enter on Friday for a lower risk entry and still achieve target.
In the event we break beneath the trendline we do have a bed of support around the monthly pivot. How price reacts here is key to the subsequent bearish move. A clear rejection would favour a new trendline to be able to be draw, however if we see small candles down here the I would favour a retracement towards the broken trendline before a resumption of losses.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.