Pound Rallies On Better Than Expected Jobless Claims

Transcription

1 January 23 rd 2013 Pound Rallies On Better Than Expected Jobless Claims The British Pound rallied this morning following the better than expected jobless claims for December, the largest single fall since August last year and now its lowest figure since June 2001 at 7.7 percent. The euro gained ground also on the figures as it moved in tandem given the heavy fall on the DAX yesterday. European stocks are still in the green zone this morning at time of writing also adding the weight to the euro s gains from those heavy losses yesterday. Yesterdays afternoon session trading saw gains for the risks in the latter part of the trading day as US stocks ended comfortably higher before all three Snapshot pairs gave their gains back to the greenback overnight during the Asian session as equities plummeted, the NIKKEI some 2.08%. The equity mover for today will be the outcome on discussions from the House of Representatives to possibly suspend the countries debt limit. If the US continue their stance on QE and extend its course, the dollar will ultimately weaken, strengthening the risk currencies further and decreasing exports accordingly. Naturally, this will subsequently affect parent equities which will then strengthen the dollar once again falling in line with expectation. Cable is currently trading at having revisited yesterday s high at following the better than expected unemployment figures out this morning. The low was seen back at 1.58 dead, a usual retracement level (as in the round numbers) for the professional money. Resistance is seen at the high ahead of and the 78.6% Fibonacci retracement level of Support is back at the low of the day not seen since August last year ahead of and respectively. Chart 1 (Cable H4)

2 Chart 1 above on the longer term timescale of 4 hours marks the overall interest by the professionals with he trailing volume seen at the bottom of the chart. Naturally, the demand for the euro has been tested as to be expected by the high volume bars and green VSA indicators accordingly. The support and resistance are also shown giving the range. With equities for this session still firmly in the green, any downside pressure is most likely to be retested back up to the resistance level again. Chart 2 (Cable M15) The 15 minute interval chart once again shows the range by way of the support and resistance a little clearer with this time the increasing volume and subsequent activity by the professional money as the pair head back up to the resistance level before heading back down to the support. Again, equities for the session will determine the overall direction as we head towards the afternoon session. Should stocks continue their bull move into the US trading day expect further upside pressure and a break above the current resistance to push higher. Conversely, towards the major support level. Eurodollar is currently trading near the high of today of at at time of writing having seen a low back down at some 50 pips since this sessions open. Resistance is again at the high as with cable ahead of seen in early trading yesterday prior to the reaction to the DAX s demise. Beyond here the major resistance levels may be tested once again although, as seen on the longer term chart below, pressure is to the downside. The long range on Chart 3 below can easily be seen as marked by the support and resistances. The highlighted VSA indicators signal further downside pressure as the first level of resistance is reached. With the volume and therefore activity of the smart (Professional) money decreases it adds weight to the move. This pressure id further confirmed as stocks for this session start to deplete. Chart 4, as with cable shown on a 15 minute interval timeframe shows the large cluster of green VSA signals across the bottom of the chart and the steadily increasing volume and interest from the professionals for higher prices. As the pair revisit the resistance level shown by the ultra high volume up bar, the red sell VSA signal appears pushing pair back down towards the support confirmed as staed with falling session equities.

3 Chart 3 (Eurodollar H4) Chart 4 (Eurodollar M15) The Aussie rode the waves of the US session equity bull run nearly two hours into the trading day to revisit as seen so many times this month already before falling heavily on the Asian equity bear tones. As the European session got underway today, the correlation that is to be expected was

4 once again seen as this sessions equities headed firmly into green territory. As the middle of the session saw equities once again fall, so did the Aussie seen heading back to the 78.6% Fibonacci retracement level of ahead of the low of today and its support. Resistance is seen at today s highs of ahead of yesterdays highs. Chart 5 (Aussie H1) Chart 5 above again indicates the lack of interest by the professionals by way of the trailing volume in the higher prices for the pair. Again, the range is marked with the support and resistance and again as equities tail, so does the Aussie in correlation. Again, on the 15 minute timeframe the interest in higher prices has decreased confirming further downside pressure and greenback strength, The highlighted VSA sell signals with high volume acts as a test as to the demand for the pair and as they hit once again the resistance level, they retrace back down. Should we see equities come off during this afternoons session, expect further downside pressure.

5 Chart 6 (Aussie M15)