FX Trading - Eruption

The currency markets awake from slumber as we see some action on Tuesday. EURUSD had been on a weak footing the whole day and took a larger hit as Eurozone PMI and retail sales came out below expectations. Have traders shifted focus from the impending rate hike to Europe's woes? Who knows, but the colorful candles seemed to have suggested the action so far. Monday saw the pair pop just above it's recent high and top of the range only to close back below; not quite an evening or shooting star, but the implications were obvious (a similar pattern is seen in AUDUSD). Too early to call a turn, something we'll only know on Thursday at the earliest.

EURUSD - 6/6 hindsight

GBPUSD was a much different story, with no bearish signs on the charts. The pair shot higher with the help of a strong UK PMI number, breaking out of its mid-range sojourn in one sudden move. Suspiciously, the rally took place a couple of minutes before the actual release of the figure (leak, anyone?), which probably explained its ferocity as everyone was taken by surprise. The move above 1.6200 took us long as there's not much to keep it from heading to range highs in the 1.6350-00 area. Will re-assess on a move back below 1.6150.

GBPUSD - run to the hills!

 

These contrary moves of course meant a sliding EURGBP and our stop got hit. Our little adventure there ended earlier than we'd thought, but we may still consider longs if the cross trades to the 0.8680-00 area. On the other hand, GBPJPY remains firm for the time being.

Other Trading-Related Stuff

While it's a holiday in China, the central bank announced a rate hike effective tomorrow, trumping the Reserve Bank of Australia which kept rates as they were. More Fed speakers on the cards later today after Bernanke said earlier that inflation must be watched 'extremely closely'; basically telling us what he should be doing everyday anyway, no? US ISM's coming out, which should be interesting, although the FOMC minutes may not make any waves especially since we have the latest views from the Fed Presidents coming at us almost everyday. 

And now for something to tell your boss about. A British study has found that those working 11 hours or more a day had a 67% higher risk of heart disease. Hmm....

Peace