DislikedHi We have daily bullish engulfing and mixed data from EU again. Great PMI from GER, better from Spain and weak data from France and Italy. I'm surprised with Spain and i guess it's positive, as Spain was also lagging Germany together with France and Italy. Worse data from France somehow connects with your view of French bonds to trade higher than current levels which is EUR negative if im correct and this also means new stimulus and / or rate cut coming to boost growth. GDP at -0,4% YOY is not any CB would like to see. Shall we be going short based...Ignored
We have still a few politically related head winds in the US, so even though we may see excellent data from there, the fact is that no matter how much Bernanke and Yellen will deny political interference or influence, the fact remains that it exists. This means that if the Fed feels the upcoming Q1 2014 Washington debates on the budget and debt ceiling may turn into another debacle, there is a strong probability that they will hold off from tapering. This is very key in USD strength and Euro weakness.
Furthermore, the heightened optimism in the UK is not only supporting Cable, but also the Euro and all EU economies are tightly linked, just like Canada and the US..
So, what do we need for the Euro to go down? Simply put, first off we need the technical conditions to support it, which at this time are mixed, so it is possible. Secondly we need a taper and/or dovish ECB action. Today's ADP version of the NFP will prompt the market to start pricing in whatever it suggests, but ultimately it is the actual BLS version that will have the most effect, provided it is higher or lower than expectation at the time. Tomorrow we shall find out what the ECB has in mind, if they choose to announce new policy change or suggest that one is or is not coming. Therefore, the short answer is "We have to wait for the data".
Regarding a good resource for T/A and P/A, there are too many books and website that offer good stuff, so a Google search should yield some excellent results. However, what has helped me alot is StockCharts.com >> http://stockcharts.com/school/doku.php?id=chart_school
Cheers and many pips to you.
PT
Those who say it cannot be done should not interrupt those who are doing it