Market Update 10/5/2013
Friday, May 10, 2013
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The economic calendar is quiet in European session hours and through the end of the trading week. This puts the spotlight on a meeting of G7 finance ministers and central bank governors set to begin today and carry into the weekend. Trades will look for commentary about the so-called “currency war” after central banks in New Zealand and Australia seemingly jumped into the fray this week. The debate between countries promoting fiscal austerity and those in favor of pro-growth policies as the way to correct global imbalances and spur recovery is likewise set to continue.
On balance, officials are unlikely to issue much besides vague admonishments against competitive devaluation given the increasingly widespread drive toward monetary stimulus across the globe. Meanwhile, policymakers’ taste for deficit reduction seems to be on the wane, pointing to the likelihood of a relatively accommodative tone to official rhetoric. Taken together, this seems supportive for risk appetite, which seems to open the door for continued Yen weakness as capital pours into carry trades financed in terms of the perennially low-yielding currency.
My Recommendations
keep shorting AUDUSD below 1.0100 targeting 0.9960 stop above 1.0160
Keep shorting EURUSD below 1.3080 targeting 1.2960 and 1.2920 stop above 1.3120 .
Good Luck
Ayman Khlifat on Twitter
Follow @aymankkhlifat
The economic calendar is quiet in European session hours and through the end of the trading week. This puts the spotlight on a meeting of G7 finance ministers and central bank governors set to begin today and carry into the weekend. Trades will look for commentary about the so-called “currency war” after central banks in New Zealand and Australia seemingly jumped into the fray this week. The debate between countries promoting fiscal austerity and those in favor of pro-growth policies as the way to correct global imbalances and spur recovery is likewise set to continue.
On balance, officials are unlikely to issue much besides vague admonishments against competitive devaluation given the increasingly widespread drive toward monetary stimulus across the globe. Meanwhile, policymakers’ taste for deficit reduction seems to be on the wane, pointing to the likelihood of a relatively accommodative tone to official rhetoric. Taken together, this seems supportive for risk appetite, which seems to open the door for continued Yen weakness as capital pours into carry trades financed in terms of the perennially low-yielding currency.
My Recommendations
keep shorting AUDUSD below 1.0100 targeting 0.9960 stop above 1.0160
Keep shorting EURUSD below 1.3080 targeting 1.2960 and 1.2920 stop above 1.3120 .
Good Luck
Ayman Khlifat on Twitter
Follow @aymankkhlifat
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