Between month end madness on Tuesday and Non Farm Friday funnies today this market is not living up to normal February liquidity, volume or rationality. Yesterday's price action around Merkel's visit to China spruiking her wares and Premier Wen's half finished/half translated sentences certainly gives you an indication of exactly how thin it really is out there at the moment. It was like playing pinball in the EURUSD yesterday, 60/70 point range about 20 times back and forth. Interestingly though the other USD pairs didn't suffer the same fate, which in many ways is a dead give away about how the market sees things at the moment.
Bottom line, no one wants to hang their proverbial twig and two berries out there on the off chance that they either get chopped or frozen off (weather reference there, in case you were wondering).
On the day we start with European figures, with PMI's out of Germany, France and the Eurozone composite, followed promptly by UK Services PMI. While in the US session we look out for CAD and US NFP and rounding the week out US Non-Manufacturing ISM. Hope you brought your helmets along today folks.
On the majors, well, status quo maintained for the time being and certainly no-one is going to be too keen to get out ahead of the train that awaits us this afternoon.
In the EURUSD, go buy yourself a lottery ticket. On the topside 1.3200/30 initially caps it, however a massive amount of stops has now built up above there and we will very likely ramp through 1.3250 today folks, be quick, be nimble and fade that false break. Downside supports sit where they have the last couple of days, around the 1.3080/50 areas, first port of call 1.3125/30 (small stops below).
Cable, has got one massively serious bid sitting just below figure at 1.5790/00 and has been hoovering the market for the last 18 hours without fail, so clearly this thing goes higher for now. Having said that, if they fill their boots, she'll run lower in a hurry once breaking 1.5770/50. The topside remains open into 1.5870.
AUDUSD is looking a little softer, but not by much. Downside level to keep an eye on is 1.0680, with stops below, while the topside is marginally capped in around previous highs at 1.0780. Small stops sit just above.
USDCAD has tested and rested on its 200 DMA around the 0.9960 area, but remains relatively heavy for the time being. The commodity complex led by Gold is definitely giving the Loonie its lead. Beware false breaks, and be ready to buy dips into 0.9930.
Good luck today folks, as I for one am ready to tear this market a new one!
Helmets on as always.
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