By reviewing and comparing market % performance we can gain a quick and convenient insight into where money is flowing to (and from) to help us refine our trading watchlist for the days or weeks ahead...
After a relatively quiet start to the week with ranging markets and subdued moves the markets finally woke up to see a weakening USD and AUD with money flowing back into Gold.
Over the weekend the situation in Ukraine has been heating up with Russian troops now moving into Ukraine, resulting in Global equities gapping down and losing ground during early Asia trading today.
If things continue to escalate I would expect to see CHF and JPY crosses benefit, particularly against a weakening AUD and USD, whilst Stocks continue to sell off from their highs and move back into bonds. AUD/JPY, an excellent proxy for risk sentiment, gapped down to 4-week lows today and is trading just above 90 at the time of writing.
Going into Friday with have Nonfarms payroll from US with CPI and Trade Balance from China which are sure to get the markets moving, even if only temporarily. With AUD and NZD being particularly sensitive to news from China and Nonfarms being a ‘traders favourite’ news release then AUD/USD, AUD/JPY and USD/JPY will be the pairs to watch for potentially large moves for Forex traders, along with Nikkei 225 and US Indices for stock traders.
FOREX:
AUD: Looking increasingly weak the Australian Dollar dominated both sides of the leader board to end the week down against all majors (even the Canadian Dollar...)
CAD: The losses have lost momentum and the Loonie is trading sideways on the weekly charts, however remains technically still bearish amid a sideways correction.
CHF: With USDCHF at 2-year lows on Friday the Greenback is looking increasingly fragile with the Swiss Fran currency basket breaking to multi-year highs and on increasing volume.
EUR: Busy week ahead for euopean news which includes PMI, Retail sales, bind auctions and Drahi speaking.
JPY: Volumes are up for the Yen with the currency basket closing the week at a 9-week high.
GBP: Following a quit week previously, last week also started range bound against the greenback but closed back near the 1.1.67 highs. Technically still looking strong but has been overshadowed by EUR and CHF strength.
USD: USD Index hit our 80 target on Friday and appears set for further losses.
COMMODITIES:
METALS: After a deeper than anticipated pullback on Silver my next target remains $23 with potential for a swing low being formed at $20.90. Gold is trading back near the February highs in light of global events seemingly on route to 1360.
OIL: WTI is on track to catch up with Brent in terms of price and gapped up in early Asian trading and currently trading at 6-month highs. With momentum technically bullish 106.30 remains the next target in the daily charts.
INDICES:
Futures charts all gapped down in early Asia trading in line with a ris-off sentiment. With NASDAQ 100 testing last week's lows, NASDAQ breakig beneath last week's lows and Dow Jones testing 16160 support, the downide appears more likely. Nikkei 225 is trading at 2-week lows, dragging USDJPY dowm through 101.60 support with it.
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