Good morning,
The USD trades weaker post G20 meeting, mainly vs EUR, AUD and JPY.
What I am reading from various commentators from Banks and the financial press is that despite the fact that the G20 agreed to agree on specific limits to keep current account imbalances at sustainable levels, to refrain from competitive devaluations, to remain vigilant on disorderly movements in exchange rates while aiming at reducing risk of excessive volatility in capital flows, there seems to be no willingness to engage in currency coordinated interventions.
It seems the market has been much more influenced by strong Australian figures pointing to higher inflation, and some research that I read from Goldman's Hatzius regarding Fed policy:
-Fed almost certain to announce easing Nov. 2-3
-probability of QE is extremely high starting with 500 bio, going up to 2 trillion
-Taylor rule shows Fed might need up to 4 trillion
With those numbers, no doubt it gives food for thoughts..
We have Chairman Bernanke speaking today at 2.30 pm, it will be certainly interesting to hear what he will tell us. On sterling, Mervin King is due to speak tonight at 21.00 pm, it will certainly keep the pound under pressure until then (in the crosses at least).
Trading wise, I have some supports on EURUSD around 1.4025-30, followed by 1.3970-90.
Nice resistances up 1.4105-15, then 1.4170-80.
Let's see if the weak USD mood continues, if so I will try to buy on the supports I just mentioned (1/2 a unit on the 1st support and 1/2 a unit on the 2nd support). Stop loss should be placed below 1.3930, to be adjusted as the day goes by.
Good trading,
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