In today’s market commentary I will turn the readers’ focus again on markets that have been moving steadily higher lately. In other words, they are trending. This behaviour results from continuous money flows into these assets. Occasionally some take money off the table and cause markets to ease a little from their overbought condition but their actions aren’t enough to turn the tide. While I go deeper into many of the topics in the upcoming webinars, I want to briefly give a word of warning: do NOT fight the big money funds! Trading is difficult enough without you making it even more difficult to yourself. Some try to be heroes while others feel the need to be cleverer than the professional big money traders and try to fade the trends. My simple question is: why? Why would you do that? There are plenty of opportunities in following the big money traders. By reading further you agree with our disclaimer at the bottom of this page and acknowledge that we don’t provide investment advice.
The week has started with Hang Seng stocks moving higher on the back of positive liquidity news from China. The central bank promised additional medium-term lending to banks which supports their ability to provide financing to companies and therefore envigorates the economy. Other China-related news stories come from the battlefields of US-China trade war and from the world of video. While the review of US-China phase I trade deal is postponed indefinitely, the US President hinted that he is not satisfied with blocking TikTok but his next target might be Alibaba. This could very well be part of his election tactics in which he wants to be seen as doing something concrete to protect the American economy.
Some other analysts are joining us and voicing their views that the EURUSD has a strong fundamental basis for the current uptrend. And, indeed the EUR is in an uptrend even though the historical resistance around 1.1855 – 1.1915 is currently slowing the pair down. Other strong EUR pairs include EURJPY and EURNZD. Both have been trending higher for quite some time and provided many trading opportunities. EURNZD is approaching resistance level (1.8260) at the time of writing this. For intra-day analysis and actionable trading strategies join our webinars (here). I’ll teach you what kind of strategies could be applied to better take advantage of my market analysis.
As mentioned before EURNZD has been one of the strongest performers among the currency pairs recently. Now the rally continues for the fifth consecutive day. Fast SMA (10 periods) is pointing higher and the Stochastic oscillator tends to move at the upper end of its range, both signalling a strong uptrend. EURNZD is trading inside a bullish price channel and near to its high. We believe in following the money and are looking to trade this market on the long side using strategies described in our webinars. I will be happy to help you to move forward in your journey to becoming a better trader.
The next significant resistance level can be found at 1.8260 which is a high from May this year and also a 38.2% Fibonacci retracement level. The sideways range between 1.7725 – 1.7912 acts as a natural support area should the price retract and move lower.
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Recent macroeconomic data
- US Unemployment Claims 963K (1120K expected)
- China Industrial Production 4.8% (5.1% expected)
- China Retail Sales -1.1% (0.1% expected)
- US Retail Sales 1.2% (2.0% expected)
- US Core Retail Sales 1.9% (1.3% expected)
- Preliminary UoM Consumer Sentiment 72.8 (72.0 expected)
Macroeconomic releases today and tomorrow
- Japanese Prelim. GDP q/q -7.8% (-7.5% expected)
- Australian Monetary Policy Minutes
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Chief Market Analyst
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