Daily Alert: For Friday 22nd January 2016

Mark Nugent2016 H1, Daily Alert, January 2016

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Fundamentals and Sentiment
  • Vix > 26 but coming down.
  • Commodities hit a new low.
  • WTI oil slightly up on day.
  • US and Euro stock markets up; Chinese and Asian down (the more western markets reflect the latest thinking in terms of sentiment).
  • JPY Index shows JPY weakening.
  • ECB keep rates unchanges. Draghi says inflation forecast to be lower in 2016 than previously thought. May need to change policy in March 2016. Remember, we’ve been here before in Q4 2015 and he failed to deliver.
So, today’s overview is – moving from risk-off to risk-on but still nervous.
Critical Trades for this week
1. USDCAD – further drop today on oil price rise. Should lead to a better entry next week.
2. USDJPY – safe heaven outflow brings us up towards desired entry.
3. EURUSD – Draghi’s comments bring the pair down. Keep watching.
4. USDSGD – a move to risk on should weaken the SGD. Not really happening. I have never traded this pair before and as such will be careful.
5. USDSEK – need to see a close above short term resistance before considering going long.
Tomorrow’s Calendar
  • Draghi speaking at Davos.
  • GBP Retail Sales.
  • Canadian Core CPI.
I’ll see you next on Monday with the Weekly Review and Outlook. Don’t hesitate to ask any questions.