News Sentiment on May’s GBP Drop, Santa Rally and the Week Ahead :: 9 Jan 2017

January 9, 2017

Well, let’s hope you didn’t start the year long on Cable or short on EURGBP.  Over the weekend, Teresa May mentioned that immigration was more important than a trade agreement with Europe and the markets responded.

GBPUSD is now down below $1.22 into unfamiliar territory and the Pound crosses are looking equally gloomy.  Right now we are showing very Bearish on Cable and, if we set our Market Alerts to look at only Pound Pairs we see that that Daily Alerts caught 2 nice moves to the downside, including today’s, on GBPCHF and 2 moves on Cable over the last couple of weeks.

If we look at the same for Hourly Alerts for the Pound pairs we show 100% accuracy over the last few days.

If you are trading the pound this week, watch out for tomorrow’s Manufacturing Production data.

Early tomorrow, as well, we have Australian Retail Sales figures.

Looking at Aussie and it’s crosses, News Sentiment is fairly neutral with one notable exception.  EURAUD is hitting support so be careful here and we have a very strong Daily Market Alert on AUDCAD and we are right in the middle of a consolidation pattern here.

Getting back to GBPAUD, we are at lows from 2 months ago approaching support.  If this fully Bullish News Sentiment holds we may be looking at a reversal and some relief for the pound.

Looking at the Indices today, it seems that the Santa Claus Rally did, in fact, hold true for 2016.  All indices shot up around Christmas. With the Dow Jones Industrial average still flirting with the magic 20,000 figure all indices shot up again last week into the new year.  Right now most indices are showing quite Bullish except for the DAX and CAC40 with some profit taking this morning.

As you know, we are able to set our Market Alerts to view only these indices or individual indices and, as we can see, many of the moves were spotted in advance on daily and Hourly Market Alerts.

For example, here we see a series of Bullish alerts over the last month on the Nikkei which has been on a bull run for 2 months now.

Continuing with this week’s news events, watch out Wednesday for Crude Inventories which will affect the price of oil, of course, and the value of the Loonie.

News Sentiment on Oil is very bearish right now and price has been falling today.  This has had a bit of an effect USDCAD but no effect on the crosses.  News Sentiment on USDCAD is bearish right now so we will keep an eye on this.  With the new US president starting in the White House, we may see some anti-NAFTA rhetoric and this may also put some pressure on the Canadian Dollar.

Looking at the USD Majors both the charts and News sentiment are mixed right now but we have lots of news affecting the dollar Thursday and Friday with Unemployment Claims, Janet Yellen speaking, Retail Sales, PPI, and Consumer Sentiment.

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