PMI’s today and from tonight it’ll go crescendo
- European PMI’s came out a bit mixed but ECB will overshadow all EUR traffic this week of course
- I’ve cut the short term EURUSD shorts with some profit in the runup to the event for 2 reasons : 1 . The 1.1730 area has again acted as a good support . And 2: I reckon we will range EURUSD tilted to the topside in the expectation of a serious cut in Bond buying from today or tomorrow.The extension period of it will probably spark some immediate jump or drop but is that really relevant in current scenario? My impression is they will go for the max length and adapt along the road if current economic upswing is confirmed. They won’t want to be seen as hawkish but will the market buy it? I think there’s a fair chance the market wants to try and buy EUROS.There are a heap of options waiting in the 1.19-1.2050 though, which if seen will make that level a tough nut to crack at first.So I will go into the event light and flexible.
- US PMI’s should set the USD tone for the afternoon session.
- I bought tiny EURCHF (1.1592)and EURJPY(133.68) this morning as per above and below anticipation of the EURO picking up a bid tone into ECB.
- My base positions , long USDJPY, long USDCHF, long USDTRY remain in place for now in the expectations of a neutral to hawkish Fed governor announcement, progress on the Tax Plan.
- As the Japanese Lifers announced they will continue to up their unhedged foreign bond buying, JPY should find sellers on small rallies.
- CHF still on the defensive as SNB is never far away from the action .
- TRY is weighed down by politics and EU’s reluctance to go into affiliation talks with Turkey.
- Last night’s long AUDNZD got unfortunately stopped out for -15 pips before the rally after NZ government’s policy announcement yoyo , but haven’t given up on trying it again close/under 1.12.
- Tonight should see a big move on that pair with the Kiwi employment and Aussie CPI numbers.
- Then from tomorrow the calendar will be packed across the Globe.
- More later
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