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Market Wire Update:
Monday- Central Banker Alert
Forex Trader Note: Keep an eye on the futures market at 8am EST on Monday because Jean Claude Trichet, the President of the European Central Bank is due to testify on monetary policy before the Economic and Monetary Affairs Committee of the European Parliament, in Brussels. The tit-for-tat rallies from global central bankers who, (all except Mr Bernanke, the Head of the Federal Reserve), want a stronger Usd. Mr B says he stands behind a Strong Dollar policy, but has not been able to make any moves to create that scenario.
Talking of hot-air, jawboning, and Central Bank speak, Mr Bernanke has the chance to disrupt the regular flow of market activity as at 12pm EST on Monday when he is due to deliver a speech entitled Federal Reserve Frequently Asked Questions, at the Economic Club Luncheon, in Washington DC. Do you recall the market reaction to his last Economic Club luncheon in New York?
It was 12.15pm on Monday 16th November. Take a look, the S&P was testing weekly highs around 1112 (not Mr B's fault admittedly), and as soon as that speech started the rally reversed. By the time that cucumber sandwiches were served, the market was around 1100 support, having absorbed Mr B's pearls of wisdom.
Macro Minute:
The major Pairs and global market drivers (equities and commodities) are all out of alignment in regard to their 4 hour trend and momentum reads. We have a swing point on all that has yet to confirm a continuation of Friday trade, or reversal at major Daily chart price points. The Usd is overbought, and the path of least resistance does look to be to initially sell the buck. Sunday/Monday trade will offer clarity as to whether global markets will buy into new-found Usd strength. Long USD/CAD on Usd strength, Long GBP/USD on Usd weakness will garner most attention. We will update as things move.
Red Flag Economics:
03:15 EST Chf Retail Sales Exp 1.2% ,Prev -1.6%
--:-- EST Gbp Halifax HPI Exp 0.8%, Prev 1.2%
08:00 EST Eur ECB President Trichet Speech
08:30 EST Cad Building Permits Exp 1.1%, Prev 1.6%
12:00 EST Usd Fed Chairman Bernanke Speech
Dollar Index: The dollar index went into Neutral mode on 26th Oct and has held that trend since. The near-term path of least resistance is consolidation around new lows, with long-bounces on weak equity trading days. A weekly close above 76.00 (that signals buyers are dominating) is bullish and signals a momentum reversal. Swing Point: 75.55
S&P Futures: The S&P futures market confirmed a Long momentum read on Nov 11th and have built a near-term support base around 1085. The 1115 area will be a major resistance point to battle this week. The moves to test and hold support are impressive, and now backed with Japanese and German markets that are also looking bullish. Swing Point: 1105
Crude Oil: There is still a very flat momentum read to crude oil trade that has been in place since 6th Nov. The 76.50 area continues to be a main price point, after sellers were held at bay recently around 72.50. The 80.50 area is the topside number to breach. There is a lack of speculative interest in oil trade right now. Swing Point: 76.10
Gold Bullion: Gold signaled long on 3rd Nov and has easily held that mode. 1135 is near-term support, backing any further long tests of 1200. Now looking for signals that support is in to buy a Jan Call option, or that 1135 fails to hold, and to buy a Jan Put option. Swing Point: 1172.