18 ledna 2010

Ken Veksler's Market Commentary

Good morning,

Let’s start with the fact that it’s a US holiday today and coupled with the first trading day of a new week, we are likely to see range bound and choppy trading at best. Of most interest (at least to me for the moment) is the incredibly bid tone in the Cable that is causing a lot of traders out there (both interbank and retail) a lot of pain. For those not sure why the Cable is here and still looking strong, all the blame lies in my view with Cadbury’s, the related bids for a corporate takeover (M&A flow) and the EURGBP which has been hostage to all of this since the last 2 weeks of last year. Having closed below 0.8850 on Friday this pair is set to test today intermediate support at 0.8775 with much firmer support coming in at 0.8730. What this means for the Cable is that we will see a test of 1.6360/80 today with good offers and decent sized stops sitting around those levels. Look for a clean out today and then reevaluate before looking to get short the Cable.

The EURUSD to me as noted in Fridays comment is still heavy and as above will be range bound in the absence of the US and any real data of note today. I think moves into 1.4430 or close enough need to be sold with a greater move lower before the end of the week looking to test and break 1.4250. Truthfully when it comes to the other major crosses I still hold the same views expressed in my Friday piece and don’t really expect any major surprises today, although in thinner liquidity nothing will surprise. Only thing worth mentioning is that the price action in my strategic AUDUSD short is still supportive of the trade and that’s even despite better inflation data over the weekend from Australia.

Best bet today is to keep your head down and look for developments to play out during the coming week.

Best regards,

Ken Veksler.

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