The US Dollar weakened yesterday in a trading session of focus on Europe with the US closed for its Independence Day Holiday. Despite further ructions in UK politics and soft economic data which admittedly was soft tier, Sterling managed a slight gain in a session also marked by some support for the EUR. Sterling and the EUR, dipped but only briefly, after a weak UK Construction PMI which saw the sharpest contraction since 2009, while for the Euro, the EC’s Sentix Investor Confidence Survey for July revealing a sharp decline in expectations.
To mark my 1100th issue of Tradernoble Daily Commentary I am offering a special 2 year rate of Euro 2500 for my Platinum Service which includes 1/4 updated emails throughout the trading day. This offer is open to both new and existing members and if anyone is interested please email me on bryan@tradernoble.com for details.
For anyone following my Platinum Service it made 55 points yesterday and is now ahead by 85 points for July having made 2550 points in June. The previous three months saw gains of 1532, 2175 and 2265 points respectively. Since I started this service in June 2015 it has averaged a monthly gain of over 2200 points.
Seemingly at his moment of political triumph, UK Independence Party Leader Nigel Farage, resigned saying now he has his ”country back”, ”I want my life back”. Meanwhile, in an FT interview, the Chancellor of the Exchequer, George Osborne had set a goal of further reducing the Corporate Tax Rate from 20% to 15% to support business investing in the UK. This rate is already scheduled to fall to 17% by 2020. The Cable which had spiked to 1.3340 on this news is back trading below 1.320 this morning as the market is nervous ahead of the UK PMI at 9.30 am.
The AUD and NZD sit at the top of the major FX Leader Board despite the sell-off in oil and base metals though Iron ore rose 3.48% to close at $56.22 a tonne which is the highest since May 18. Earlier this morning the RBA left interest rates on hold and so far this has not affected the AUD Exchange Rate.
No even sterner words from yesterday from the ratings agency S&P could hold the AUD back, with S&P saying that ”we could lower the rating if parliamentary gridlock on the budget continues and Australian budgetary performance does not improve broadly as we expected a year ago”. Meanwhile Moody’s commented that short-lived political uncertainty would have limited implications for Australia.
This morning on the economic front we have German, Euro-Zone and UK PMI at 8.55 am, 9.00 am and 9.30 am respectively. This is followed by Euro-Zone Retail Sales at 10.00 am and US ISM New York at 2.45 pm. Finally we have US Factory Orders at 3.00 pm.
Later this evening at 7.30 pm the Fed’s Dudley will speak at a discussion round table.
September S&P 500
As expected the S&P traded in a narrow range yesterday with the US markets closed. However we are seeing some anxiety hitting Asian markets and this is filtering through to Europe after last weeks huge sell-off followed by just as dramatic rise. There is no doubt the S&P is getting support from the fact that the Fed are probably on hold with interest rates for this year and may only do one hike next year which is incredible when you see the bullish talk on rates from all the Fed Members with the exception of Fed Chair Yellen who has been relatively cautious all year. I am still flat the S&P and today I will continue to look to buy the market in small size from 2078/2084 with a 2073 stop. My only interest in selling this market is on a rally higher to 2112/2120 with a 2125 stop.
EUR/USD
No change as I am still a buyer on any dip lower to 1.1010/1.1050 with the same 1.0970 stop. My only interest in selling the Euro is still on a rally higher to 1.1230/1.1280 with a 1.1305 stop. Remember a break and close over 1.1240 that holds for more than a few days will be very constructive.
September Dollar Index
I will now lower my sell level to 96.00/96.40 with a 96.75 stop.
September DAX
Shortly after the DAX opened this morning the market traded lower to my 9620 buy level. The one market that I am not comfortable in been long is the DAX and I subsequently emailed my Platinum Members to exit this position at 9645 and I am now flat. Today I will now lower my sell level to 9720/9770 with a 9815 stop which is just above the high made early yesterday morning. I do not want to be long the DAX at this time.
September FTSE
Unfortunately the FTSE just sold off after I posted yesterday morning. I waited to buy the market at 6495, and I still long with the same 6440 stop which will probably get hit later today. If I am stopped out of this trade I will be a more aggressive buyer on any subsequent dip lower to 6350/6385 which is very strong support with a 6325 stop. I still do not want to be short the market at this time.
I am still flat Cable which is getting hit ahead of the UK PMI at 9.30 am. Sterling is really getting hit against the Euro with the market trading just below the key 0.8500 resistance level. Today I will be a small buyer in Cable on any further dip lower to 1.3090/1.3140 with a 1.3045 stop.
Dow Rolling Contract
No change as I am still a seller on an further rally higher to 18060/18130 with a 18180 stop. I still do not want to buy the Dow at this time preferring instead to only buy the FTSE and the S&P.
September BUND
The sell-off in European equities this morning sees the Bund trading higher. I am still flat and today I will continue to look to sell the market on any further rally higher to 167.60/168.00 with a 168.40 stop.
Gold Rolling Contract.
No change as I am still a small buyer on any dip lower to 1312/1320 with the same 1305 stop.
Silver Rolling Contract.
Overnight Silver traded lower to my 19.70 average buy level with a 19.50 low print. As I mentioned at length yesterday about the huge open interest and the fact that the Daily Sentiment Index reading is over 90% I have decided to cut this position at 20.00 and I am now flat. Today I will again look to buy the market on any dip lower to 19.10/19.60 with a 18.75 stop. The 18.00/18.30 area is very strong support for Silver and I will be a very aggressive buyer on any dip back to this level over the coming days.
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