EUR/USD Bearish Below 1.30
Matt Simpson | Sep 08, 2014 05:52AM ET
CNY: Bank Holiday saw quieter trading throughout Asia; Trade balanced comes in with mixed results
AUD: Job ads +1.5% on month; Internet job ads up +1.4%; Newspaper Ads +1.8%
JPY: 2Q GDP falls sharpest in 5 yrs, contracting -7.1% instead of the -6.8% consensus.
Iron ore prints fresh 5-year lows
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No red news tonight and due to last week being explosive we do run the risk of a quiet start to the trading week. Therefor try to be realistic with setting targets (such as another 250 decline on Euro).
- German Trade Balance could help boost the fragile Euro, particularly if it comes in above 19. However expect any upside to be limited as traders are likely to be selling into any bullish rallies on EURUSD.
- Canadian Housing Balance is a volatile number. Previous months have seen +13.8% and +13.5% expansion m/m with an expectation for this to cool off at -10%. With a low expectation we could take -0.5% (or above) as bullish for CAD, and even more so if it expands further.
EUR/USD: Bearish below 1.30 but risk of consolidation
This week will struggle to live up to the excitement of last week. That said the trends are quite clear, so we require catalysts to push the EUR/USD into 'sell zones' to hop on board the bearish gravy train.
BIAS: Risk of minor runs up to wards 1.30 but may not even make it this far due to the speed of the decline. Seeking to sell into any rallies but a break below last week’s low is a bearish continuation signal.
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COUNTER-BIAS: Price to rattle between last week’s low and 1.30 in a haphazard way. Further Euro gloom is required for a more directional break lower.
ASX 200: Below 5611 targets 5500
The Weekly time frame has seen a Bearish outside week, and now trades near last week’s lows. I suspect 5683.4 is a top and a deeper retracement should soon take place. Currently we are near the targets projected from a double top, so there is a risk that the move may already be complete.
BIAS: Prices to be capped at 5612 and target 5500
COUNTER-BIAS: A break back above 5612 invalidates the analysis.
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