Last week we had some big news from the Fed in Washington so let’s get right at it and take a look at the US Majors.
Janet Yellen was due to announce a 25 point rate hike, which we all expected and which was priced in to the market. What we didn’t expect, however, was the idea of raising rates 3 times in 2017.
This sent the dollar on a tear and, against the Aussie, Kiwi and Loonie, it seems to be still going in the same direction. However, we see bearish news sentiment on GBPUSD and we are poking at support so we might be looking for a breakout to the downside.
It’s a quiet week just before the holidays but we have US Core Durable Goods Orders, Quarterly GDP and Unemployment Claims this Thursday.
Looking north of that border, affecting the Canadian Dollar this week will be Thursday’s Core CPI and Retail Sales. Monthly GDP figures come out Friday as well.
As we had seen, the Canadian Dollar took a beating against the US Dollar last week but the price of oil is on a Bullish run which may put some strength back into the Loonie. Right now news sentiment is neutral on both but we will keep an eye on these.
Our Daily Market Alerts have given us quite a few positive notifications on the direction of Crude both long and short over the last couple of weeks.
This morning, news form Tokyo saw the Bank of Japan leave their interest rate at negative 0.1 percent with very little effect on the Yen. Analysts feel that the Central bank would be happiest with a USDJPY rate of around 120 to the dollar to help spur exports.
If you’ve been following this you may know that the concept of negative interest rates is still in its experimental phase and, well, the jury is still out.
Right now most Yen pairs are neutral in News Sentiment with mid-Bearish on EURJPY.
The Dow Jones Industrial Average is flirting with a record high of 20,000 and it might have made it last week if not for the Fed’s news. However, News Sentiment is very bullish right now and we are witnessing a bit of consolidation in the form of a pennant so we may see a breakout to the upside.
Having said that, the same thing is occurring on the S&P 500 but News Sentiment looks just the opposite. This is very important every December as usually, stock prices surge during the last week of the year. The reasons for this are too lengthy to explain in this short video but feel free to search the internet for the “Santa Claus Rally”.
Having said all that, keep an eye on the news. Between Mr Trump’s tweeting about Chinese marine activity and the sad news from Turkey regarding their Russian ambassador, these things have a way of moving the markets in a hurry.
Speaking of which, News Sentiment is neutral on The Turkish Lira at this moment but we are looking at resistance and consolidation in the form of this Ascending Triangle. Daily Market Alerts have given us 3 perfect indications on USDTRY over the last month.
If we are expecting turbulence in international events, the contrary move during geo-political upheavals is gold of course. The price of gold has not been this low since the beginning of the year and has been on a bear run since the beginning of July.
News Sentiment was neutral last night and the price has been creeping up since the end of last week. As of this morning, News Sentiment on Gold has shifted to fully Bullish and, as we know, anything can set it moving again.
Looking at the Pound we are still seeing Sterling weakness against the Dollar and News Sentiment bears this out. However, the Pound is looking much better against the EUR and the Aussie but we are currently sitting at support and resistance respectively.
The only major news out of London this week is Friday’s current account.
Just to recap, Acuity Trading reads millions of pieces of news and social media looking for bearish and bullish sentiment on:
Our Radial and Linear Gauges look at the last hour of data and compare that against the average of the last 30 days of News Sentiment.
Our Market Alerts issue trade ideas based on changes in both Hourly and Daily shifts in News Sentiment.
That’s all for now. Happy Trading and Happy Holidays.