Trading Plan – Mon 12 Aug: Bullish pin bars on equities and currencies at extremes

Mark NugentAug 2019, Trading Plan

Trading Plan – Mon 12 Aug: Bullish pin bars on equities and currencies at extremes

Last week saw equities drop on global trade concerns but then rally significantly, ending the week where they started and creating a bullish pin bar on the weekly chart.

Central bank activity saw the RBNZ dovish with a 50bp cut (25bp expected) and the RBA relatively hawkish (no immediate need for further cuts).

The GBP hit post-referendum lows after quarterly GDP showed the first contraction since 2012. Other currencies are at extremes: USD at 2 year high; JPY at 3 year high; CAD at 1 year high; AUD at 4 year low.

GOLD rose significantly on global trade fears.

This week gets off to a roaring start with Trump saying he wants the Fed to cut by a further 1% and he might cancel the September meeting with China. North Korea launch yet more missiles.

In terms of trading:

1. The bullish pin bars (W1 chart) on equities deserve attention.

2. I will be watching the GBP closely. The GDP miss on Friday was bad and we have Average Earnings on Tuesday, CPI on Wednesday and Retail Sales on Thursday so there are plenty of catalysts to drive the currency down further. I am only interested in GBP shorts at the moment.

3. I will also look at AUD, currently at 4 year lows. Wednesday sees Wage Price Index and Westpac Consumer Sentiment and Thursday sees the RBA’s key measures – Unemployment and Employment. Again, I am interested in AUD shorts.

Happy trading.

The updated Trading Plan is HERE.

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