H4 making an inverted H&S and price bouncing off of 88 key level on the daily. Nice H4 TL broken to the upside. Looking to go long on retracement setup subject as always to the right kind of bar formation as confirmation. E.g. Pin, or Bullish Engulfing.
Daily, 88 looking like a strong level here to me. Upside TL still intact (blue line, not red). No follow through on the last wave down, and 88 level acting a solid support. 90 would be 1st upside res I imagine. Would be lovely to jump on board for retest on 93.70 - 94 area :) I can dream.Crits and sanity checks welcome.
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: GDPs, BERNANKE & CONSUMER SENTIMENT: UK Q2 GDP (4:30 EST, 8:30 am GMT, 9:30 BST) is expected to remain unrevised at 1.1% (the highest rise in 4 years), but any downward revision will likely ease cable into the $1.5570s.========= US Q2 GDP (8:30 EST, 12:30 GMT) seen revised to 1.3% from the advance reading of 2.4%. Some have mentioned a figure of as low as 0.6%. All components of the GDP report will be revised but the important PCE component (personal consumption expenditure) is seen unchanged at 1.6%. A figure below 1.4% or 1.3% would hit USDJPY hardest, along w/ downward pressure on yen crosses temporarily before market likely regains composure ahead of Bernankes speech. A shockingly low figure (below 1.0%) would not only hit all yen pairs, but would likely trigger broad selling in USD. I see another EURUSD & GBPUSD attempt towards $1.2760s and 1.5620s. ====== === 90 mins later, Bernankes speech titled Economic Outlook & the Federal Reserves Policy Response will hit the wires, which I expect to focus on the POLICY ACTION instead of the FORECASTS and OUTLOOK, in which case he will explain the FOMCs August decision to purchase treasuries as a way to maintain the size of the Balance sheet. Also watch Univ of Mich consumer sentiment due 5 mins before Bernanke's speech, exp at 70 from 67.8, so a positive figure could also help underpin cable and euro vs USD.
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Tomorrow the Office of National Statistics announces the second reading of the UK GDP second quarter.Market expectationsThe first reading showed a growth of 1.1%, almost twice as fast as the market had expected.The general consensus for the second reading is for no change. However, with strong headwinds facing the UK economy, traders will be keeping an eye on the second reading, particularly if there is any deviation from market expectations.There is no doubt that recent weak economic data from the UK and important trading partners the US and EU has raised investor concerns over the potential for a double dip recession.Indeed only recently Mervyn King, the BoE governor, said that “business and consumer sentiment have shown signs of softening…and there is great uncertainty about the outlook for both the US and our most important trading partner, the euro area.”¹ (source: Market Watch 11/08/10)There could however be some optimism that the second reading of Q2 GDP may be revised up considering the recent data concerning construction activity grew 8.6% last quarter, much higher than the 6.6% expected.A stronger than expected reading could boost hopes that Britain will escape a double dip recession, whilst a weaker second reading could escalate fears and force traders to seek defensive asset classes.
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WHEN MARKETS TAKE A BREAK from the recent selloff, FX traders pick among USD, JPY and CHF as the safe haven currencies to sell. JPY is hit hardest on a combination of a bounce in Asia and European futures after the Jpns govt urged the Bank of Japan to ease the yen as part of an upcoming stimulus that has yet to be confirmed. Politically, PM Kan is being challenged by senior DPJ officials for the leadership. We have been here beforeJapanese political uncertainty combines with temporary bounce in equitiesFX traders capitalize with short-term longs in yen crosses; thus, EURJPY, AUDJPY and CADJPY facing intermediate targets at 108.30, 75.50s and 80.60s. Such yen shorts ought to be short-term in nature, as traders remain cautious from ahead of todays US jobless claims will they decline from prior weeks giant 500K reading) and Thursdays Bernank/GDP combo. EURUSD still seen retesting 1.2760s.
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The best analogy for traders? They are hackers. Just as hackers search for and exploit operating system and application shortcomings, traders do the same thing. A hacker wants to jump in front of your shopping cart and grab your credit card and then sell it. A high frequency trader wants to jump in front of your trade and then sell that stock to you.http://seekingalpha.com/article/204160-what-business-is-wall-street-inRead more…
