Tuesday starts out rather quickly, as we have an interest rate announcement coming out of Australia. There is no change expected, but expect the statement to cause a lot of noise in the marketplace. With that, the Australian dollar looks a bit vulnerable at this point as we have formed a shooting star for the Monday session. The shooting star suggests that we are heading back into consolidation though, so expect the Aussie to be a little bit soft, but not necessarily in some state of meltdown. On the other hand, if we break the top of the candle for the session on Monday, we believe that the market goes to the 0.9450 level.
The US ISM Manufacturing PMI numbers come out as well, and the of course will have a massive effect on US stock markets, especially the S&P 500 which is currently sitting just two points below the all-time high. If we can get above the 2005 level on a good ISM number, we believe that this market will certainly continue to go much higher and anything above 56.8 could in fact do that.
The EUR/USD remains a “sell rallies” type of pair, and as a result that’s exactly what we will look to do on short-term charts. The NASDAQ has already broken out, so quite frankly that’s a one-way trade at this point, and oil certainly looks like it might be picking up a little bit of steam to the upside. We believe that moving above the $96.00 level will be vital for oil to continue going higher, and the ISM numbers been strong out of America could in fact influence the market to go higher as it will suggest there might be more demand for energy out of the factories.
We believe that a lot of the previous themes will continue, meaning that stock markets will do well, and the US dollar will still remain the favored currency overall. With that, we think it’s more of a “steady as she goes” type of market.
