Good morning everyone,
It looks like a rather uneventful news day today as far as econ data releases are concerned. At 08:30 GMT, we get some data from the UK including y/y CPI and Public Sector Net Borrowing. We also get the BOE inflation letter today but there is no set time for that. All in all, I don't see how any of this will have much impact on global flows other than maybe a small effect on Cable. The key data today will be the US Existing Home Sales report at 14:00 GMT, coincidentally released at the same time as the NY cut option Expiries... More on that in a separate post.
As I had mentioned last week, this correction will be choppy and cautious and I have no reason to change that view at this time. My feeling at this time is that it will continue until at least tomorrow or Thursday, awaiting the results of the EU summit tomorrow (Wednesday) and the rhetoric that will continue to flow from it into European trade on Thursday. What happens after that is highly dependent on the Summit's outcome. Obviously no matter the outcome, the underlying market conditions will not change. It is only the hopium level that will have any effect. Greece is more messed up than it ever was and Spain is right behind it. Therefore, I expect things to get much worse before any sustainable hope (if any) sets in.
Technically, I am looking for this correction to eventually test the 38.2% Fibo level of the move down from 1.3283 to 1.2641 which comes in around 1.2886... This level should also coincide with the 12 day ema depending on when (or if) price reaches there. I have used the word 'if' here because I see a very high risk of some tape bomb ending this correction prematurely at any time over the next two to three sessions. Of course a good dose of hopium could see price shoot up on a face ripping short cover toward 1.2950/60 which I suspect would be pretty much the cap on this move.
Be careful out there. With so much methane gas floating around in the air, one strike of a match and this whole thing blows up sending this pair back to retest the lows in a hurry.
E/U D1
E/U H1
It looks like a rather uneventful news day today as far as econ data releases are concerned. At 08:30 GMT, we get some data from the UK including y/y CPI and Public Sector Net Borrowing. We also get the BOE inflation letter today but there is no set time for that. All in all, I don't see how any of this will have much impact on global flows other than maybe a small effect on Cable. The key data today will be the US Existing Home Sales report at 14:00 GMT, coincidentally released at the same time as the NY cut option Expiries... More on that in a separate post.
As I had mentioned last week, this correction will be choppy and cautious and I have no reason to change that view at this time. My feeling at this time is that it will continue until at least tomorrow or Thursday, awaiting the results of the EU summit tomorrow (Wednesday) and the rhetoric that will continue to flow from it into European trade on Thursday. What happens after that is highly dependent on the Summit's outcome. Obviously no matter the outcome, the underlying market conditions will not change. It is only the hopium level that will have any effect. Greece is more messed up than it ever was and Spain is right behind it. Therefore, I expect things to get much worse before any sustainable hope (if any) sets in.
Technically, I am looking for this correction to eventually test the 38.2% Fibo level of the move down from 1.3283 to 1.2641 which comes in around 1.2886... This level should also coincide with the 12 day ema depending on when (or if) price reaches there. I have used the word 'if' here because I see a very high risk of some tape bomb ending this correction prematurely at any time over the next two to three sessions. Of course a good dose of hopium could see price shoot up on a face ripping short cover toward 1.2950/60 which I suspect would be pretty much the cap on this move.
Be careful out there. With so much methane gas floating around in the air, one strike of a match and this whole thing blows up sending this pair back to retest the lows in a hurry.
E/U D1
E/U H1
Those who say it cannot be done should not interrupt those who are doing it