FX Trading Notes – 22/6/2017

Key points

  • European equities are under pressure, while US stocks have opened on a flat note. The US dollar is flat lined as falling inflation expectations dampen the Fed rate hike outlook.
  • 5-30 yield curve has been completely hammered. Expect weakness in banks, especially if the oil finds fresh sellers.

S&P 500 – Tuesday’s bearish Marubozu candle and Wed’s bearish move suggests exhaustion. I wouldn’t mind attempting short trades with very small tight stops. Objective would be 2148-2405.

EUR/USD – A nice rounding top kind of formation on the 4-hour chart. The 50-MA & 100-MA have topped out on the 4-hour chart. Makes sense to stay short, expecting a retreat to 1.1119-1.11 handle. A break lower should yield 1.1043 (daily 50-MA).

GBP/AUD – Descending trend line on the 4-hour breached, bullish price-RSI div. Attempt longs on a break above 1.6804 with tight stops. Expecting the cross to jump to 1.6865-1.6938.

Brent Oil – Having noted the oversold RSI on the daily and 4-hour time frame, am watching for a potential bullish-price RSI div on 4-hour followed by a upside break from the falling channel on the 4-hour. That could yield at least 100-150 point up move. Would want to initiate fresh shorts around $47-47.50 if the rise to the said levels lacks the backing of a bullish RSI div.

 

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