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Another day brings another change of tone, and in fact today saw two different phases – some risk-off overnight on weak Chinese PMI surveys and Google results late yesterday, followed by a stronger Eurozone and Italian GDP estimates for Q1 and massive surprises on German CPI for April powering a euro comeback across the board. EURUSD looks fully reversed from the downside breakout attempt if it closes the week above 1.1200, although strictly speaking 1.1250 offers better confirmation of a reversal.
Today we merely make a couple of observations on the latest moves as we are reluctant to take on new positions ahead of tomorrow evening’s Federal Open Market Committee meeting (though we may add a EURAUD position tomorrow on a strong close today – see below.) Breakout signal tracker
The EURUSD short was stopped out on today’s steep back-up and we feel less bad about our “poor” entry level for the position, as even had we waited for a better entry, the stop level would not have been far above 1.1200 anyway. The EURSEK long still in working order, and we raise the stop level there as it would be disappointing after yesterday’s new high close for the cycle to see the price action back below 10.60 – the time frame for the trade runs out Friday if the stop survives. The USDCAD long is still alive after a weak GDP print from Canada today.