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October 16th 2014 I Scalped Gold overnight and EURUSD too. Yesterday was a volatile day most particularly in the Indexes. As the weak retail sales number came out of the U.S yesterday I essentially threw a grid across EURUSD and scalped it for 1.14% gain. That on top of my Gold trades made for 3% yesterday.
EURUSD – We have now closed above 1.2790 on a daily basis. The clincher would be such a close on a weekly basis so two more days to go before we know for sure. Such a close in theory would set us up for further upside in the coming weeks. Nevertheless we have Initial Jobless Claims today so all is not lost for the short positions intraday.
Gold – I’ve just traded this market again overnight. Outlook is basically unchanged. $1180 has held firm for two weeks and last week’s candle was a higher high. This sets up the market for a continuation higher. Key resistance is via the weekly descending trend line at $1317.00.
USDJPY – I don’t see it getting too far lower and actually previous resistance at 105.50 now turns support and I would be using this pause in dollar strength to begin buying USDJPY. Ultimately these two central banks are going in opposite directions.
EURCHF – The SNB have pegged the Franc to the Euro at 1.20 and a challenge of that level would seem likely. This would seem especially true if we begin to see the flight of capital from Russia pick up, or if we see a high profile Russian corporate debt default on debts dominated in foreign currency. Any long trades down here I think warrant a guaranteed stop because this could get ugly if we get a market moving move over a weekend. Any challenge of the 1.20 peg not only calls the credibility of the SNB into question, but arguably it brings all central banks actions to manipulate markets in the past few years into question.
NZDUSD – Yesterday’s move was highly correlated with EURUSD and shows that markets do not trade in isolation but rather are part of an ecosystem. As EURUSD took out last week’s high at 1.2790 so Kiwi took out last week’s high at 0.7973. It likely sets us up for a corrective move higher in the coming weeks. If you want to know what Kiwi will do, keep one eye on EURUSD!
