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US500 4 HOUR CHART – Correlation?
In the absence of fresh economic news, markets are like steering a boat without a rudder.
This leads to looking for correlations to steer the boat. In this regard, early USD strength seemed to correlate with weaker stocks, which have since recovered and the USD has backed off its day highs.
Note, correlations work until they stop working so keep an eye on Stocks to see if the pattern continues (or not).
As for U5500, trading with a bid (while above 5700) but consolidating unless 5758-73 are taken out.
‘USDJPY 4 HOUR CHART – Key levels cited
As noted yesterday, key levels are at 147.20-149.37 and tests of both side at 147.34-140.12) have paused within this band.
Pivotal level is clearly 148, which will dictate the next directional move.
For those still looking at this as a retracement, here are the FIBO levels for 161.93-139.58
EURUSD 4 HOUR CHART – POWER OF 50
Turing on my screen what popped out was EURUSD making another run at 1.0950 (1.0951 double bottom).
The significance is not only the psychological 1.0950 level but the 1.0949 key chart support just below it.
Lending potential support could be caution at some stage ahead of tomorrow’s US CPI report although the focus will soon shift to next week, ECB meeting, where a 25 bps rate cut is widely expected.
On the other side, there is the ongoing Middle East situation with traders waiting for the other shoe to drop (Israel reprisal against Iran).
In any case, our view that EURUSD will stay defensive as long as it trades below 1.10 has so far worked out. a firm break of 1.0949 would put 1.0881 on the radar as next key support.
AUDNZD DAILY CHART – RBNZ FALLOUT
It is the reaction to news that matters played out overnight with the NZDUSD falling sharply (down about 1%) after the RBNZ, as generally expected, cut rates by 50bps
AUDNZD reaction (up) would need to establish above 1.1056 to expose the Major level at 1.1151.
Otherwise, range is to 1.0980-00,
Brent Crude Oil
Oil Prices Fall as Israel’s Response to Iran’s Attack Fails to Materialize and China Declines to Add Further Stimulus
Oil prices dropped on Tuesday for the first time in six sessions as traders await Israel’s response to Iran’s Oct.1 missile attack and China avoids new stimulus measures to revive a flagging economy.
West Texas Intermediate crude oil for November delivery was last seen down US$1.40 to US$75.74 per barrel, while December Brent crude, the global benchmark, was down US$1.43 to US$79.50.
Oil gained 13% in the five sessions after Iran’s attack as traders worried Israel response would hit at Iran’s oil infrastructure, potentially cutting into the country’s 1.7-million barrels per day of exports. Fears abound also that a wider war in the oil-rich Persian Gulf is on the horizon and could threaten nearly a third of global oil output. However the risk premium may be fading given the delay in Israel’s response.
NAS100 DAILY CHART – BACK ABOVE 20k
NAS100 back above 20K but any high other than a new record high will be a disappointment.
It feels like markets in general are waiting for Israel’s reprisal to get the focus away from geopolitical risks.
Stocks, meanwhile , are trading with a bid ahead of earnings in the hope that current lofty valuations can be justified.
XAUUSD DAILY CHART – Range or retracement?
As I have been pointing out it has been glaring that GOLD has not gotten a safe haven bid despite geopolitical tensions and risks.
As also pointed out, if you t=assume a 2600-2700 range then 2650 wills et the tone, below it increasses the risk of a retracement.
Now we see id 2600 holds. If not, then support is at 1545-85.
Let me start out by saying where you place a stop is more important than where you enter a trade. Understand this concept and you are on your way to changing the way you look at trading
Let’s see if this turns around the way you look at trading
This Will Change the Way You Look at Trading
US500 4 HOUR CHART
When you compress this chart you can see US500 has been in a range and consolidating for more than a week.
It feels like markets in general are waiting for Israel’s reprisal to get the focus away from geopolitical risks.
Stocks, meanwhile , are waiting for earnings to see if current lofty valuations can be justified.
In any case, risk of a recession has faded and question is whether the uS economy is headed for a soft landing or no landing (i.e. continued growth).
2-10 yield curve widens by 4bps to 0.06
Source: CNBC
A positive yield curve indicates that long-term debt interest rates are higher than short-term debt rates.
A positive yield curve can mean that the economy is expected to grow in the future. This is because a rational market will generally want more compensation for greater risk, and long-term securities are exposed to greater risk.(AI Overview)
EURGBP 4 HOUR CHART – REVERSAL OIF FORTUNE
Retreat from .8404 helping to give GBPUSD a bid while EURUSD lags after a tepid attempt at 1.10, on a reversal of the price action seen yesterday.
With key support at .8349, .8350-00 seems more like a no man’s land so watch this cross as it is influencing EURUSD and GBPUSD.
EURUSD 4h
Waiting from yesterday to see 1.10 and reaction to it – lame…
Supports : 1.09750 , 1.09500 & 1.08850
Resistances : 1.10000 , 1.10350 & 1.10500
Close of this Bar above 1.09850 would be Bullish short term – another leg Up
Close below 1.09800 would indicate possible continuation of the Downtrend
XAUUSD DAILY CHART
Since setting a record high 9 days ago, XAUUSD has traded either side of 2650 in the following 8 days.
This is clearly the pivotal level, especially if you view the current range at 2600-2700.
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GOLD has been aa disappointment in that it is not benefiting from safe haven flows but it remains to be seen if it is just biding its time, In any case, 2650 will eventually dictate whether the current move is just a pause or the start of a retracement,
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