- Fed's signal to an end to QE
- Slowdown in BRIC economies, notably China
- Not talking about Europe anymore!
Does that mean cheaper commodity prices in the near future, at least for a while? Can't wait for crude price to collapse.... wink!
This week will be interesting as the mix of full moon and increasing correlation amongst asset classes should come out with a potent concoction!
Before I start, let's thank Temasek for that signal yesterday... smart money indeed!
E$ has trigger a bear signal and I have to claw back on my bullish view for now (delayed). With that signal, it opens up scope for E$ to retest previous low 1.2973.
However, in a risk off environment, EURXXX will benefit as carry trades are being unwound. Expect EURXXX to correct lower over the next 48hrs before rebound. Will watch for buy signals. EURAUD & EURNZD will be the fun pair.
For E$, may see early pressure following yesterday's sell-off. 1.3070/80 to hold on first dip and 1.3160/80 region to cap. Be careful of whipsaw price action!
When in doubt, cut out, step back, and re-assess. Never be held hostage by a bad position. There will be lots of other opportunities.
Update1: Waning downside momentum in the currencies suggest consolidation with an increase in probability of short squeeze.
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