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Forex Trading Strategies Market shrugs off massive US confidence number as temperature heats up ahead of Fed Beige Book today and ECB tomorrow.
Strong data out from Australia overnight - but AUD/NZD slips to new 30-year low.
MAJOR HEADLINES PREVIOUS SESSION
US Consumer Confidence for November out at 98.9 vs. 90.2 expected and 85.0 in October
US New Home Sales for October out at a record 1424k vs. 1200K expected
New Zealand Building Permits for October out at -6.7% vs. -2.5% in September
US Weekly Consumer Confidence out at -15 vs. -17 the previous week.
Japan Nomura Manufacturing PMI out at 55.3 vs. 54.7 in October
Australia Retail Sales for October 0.5% vs. 0.4% expected
Australia Construction Work Done for Q3 out at 0.9% vs. 1.5% expected
Australia Private Sector Credit grew 0.9% in October as expected
Japan Labor Cash Earnings for October out at 0.5% vs. 0.7% expected
Japan Overtime Earnings for October out at -0.1% vs. +0.4% in September
Japan Housing Starts for October out at 9.1% vs. 3.8% expected. The annualized housing starts rate was out at 1.292M vs. 1.216M expected.
France Unemployment Rate for October out at 9.7% vs. 9.8% expected. The Unemployment change was out at -13k vs. -11k expected
Market remained rangebound overnight, though the USD weakened a bit from the strongest levels in the wake of the US Consumer Confidence numbers
THEMES TO WATCH UPCOMING SESSION
Reasonably strong numbers from Japan and Australia overnight - without much reaction as the market remains nervous and rangebound ahead of all the numbers later this week. Our view has not been altered much by events overnight, thought the spike in yields yesterday on the superstrength US Consumer Confidence number theoretically offers short-term support to the USD. The Australia numbers overnight were rather strong, and with all of the recent strength in metals combined with these numbers, we ought to take a shine to the currency. And we may as long as the recent stock market sell-off doesn't turn into a rout. AUD hates uncertainty and AUD/USD correlation historically with the S&P500 is very high. Japan's numbers overnight were also strong - and we're still looking for a reversal in USD/JPY as well as a topping process may have started there.
Up today we have German Retail Sales (out at a very strong 1.9% we note at the last minute...), UK Consumer Confidence and the first revision of US Q3 GDP - expected revised upward to 4.0% vs. the original 3.8%. Possibly more important than any of these is the Fed Beige Book today out later in the US session: we'll be combing through it for any clues that the Fed is shifting its view on monetary policy.
The market is already expecting good US numbers and continued oil sell-off is adding to the optimism. Still - we expect a pivot soon toward a weaker USD, but are trying to be patient and wait for the break above 1.1900 in EUR/USD for proof. The transition to a new calendar month may be one of the triggers that could see the expected move. But the market has taught us lately that we need to be cautious as it continues to whipsaw back and forth.
Note: the support/resistance levels used in the matrixs of this document are levels derived from yesterday high, low and close. Reference in the text to other support/resistance levels will occur.
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