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Trading is Like a Puzzle
Trading is like a puzzle and when the pieces fit together, price action will make sense to you, and you will know how to react to what you see on charts and headline news.
Traders have different puzzles as they have different approaches. For me, this caught my eye on Friday and why I posted it a few times. It explained why the latest exchange of attacks between Iran and the U.S. have been largely ignored with a greater reaction to any headlines that the two sides would continue talking.
It was a missing piece to my puzzle that I will keep an eye on in case hostilties escalete.
Markets’ response to the latest attacks has been relatively calm, however, suggesting investors have seen this movie before and believe the ultimate result will be a return to talks – not all-out war
Market Update: Headline whipsaw
Following this latest one…
A source with knowledge said another round of negotiations between the US and Iran is expected next week, possibly in Switzerland, reports Axios ;”>Source: Try Newsquawk free for 7 days
From an earlier post: Markets’ response to the latest attacks has been relatively calm, however, suggesting investors have seen this movie before and believe the ultimate result will be a return to talks – not all-out war
EURUSD US500 XTIUSD
Oil popped with on this headline with risk taking a sharp but so far brief hit elsewhere
US President Trump says Iran has asked us to continue “talks.” We have agreed to do so, but the United States has stated to them, in no uncertain terms, that the Cease Fire is OVER!
Market Update: US stock bulls trying to take control
US500 7 day pivot likely to be broken and bulls still need to firmly regain to be in control, Beyond 7552 only resistance ahead of the 7624 record high is 7583.
NAS100 keeping its bid above 29K but still needs to regain 29852 and 30K to confirm bulls are back in control
US500 NAS100
USDJPY 4 HOUR: Better than verbal intervention
Fin Min Katayama’s encouragement for pension funds to invest in Japanese assets was better than verbal intervention as it sent USDJPY tumbling.
If I was the BoJ I would try to keep USDJPY below 162 or risk a backfire if there is no follow through.
In any case, the move down has paused just above key 161.25 support (low 161.28), which blocks putting 160 on the radar.
On the upside, if there is to be teeth to a shift in portfolio flows, then there should be a sell on blips bias as long as 162 holds on top.
All subject to geopolitics, price of oil and US bond yields.
Market Update
Inconclusive trading with EURUSD running stops above 1.1450 followed by a quick retreat after 1.1462 held on top, US500 so far breaking a 7-day pivot around 7500 (bullish) but still needing a break of 7552 to confirm while crude oil remains on the defensive but consolidating after holding a test of support (see 4 hour charts).
EURUSD US600 NAS100
Forex Market Snapshot
It is back to square one for most currencies after reboundinbg from a brief USD sell-off overnight. The JPY is an exception as it outperforms but here, too, USDJPY has come off its low although still trading below 162. USDCAD so far breaking a 12 day pattern where 1,42 has traded each day (bearish) but with limited follow after a brief break of the 1.4149 range bottom in what feels like a TGIF end to a choppy, headline filled week.
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