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Trading Outlook – Neutral

Jarratt Davis
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Originally updated: 07:00

Trading Bias: Not Applicable

Currency pair: None

Current Sentiment: Neutral

In today’s trading session we will be waiting for news flow to provide a catalyst to get into the markets as no stand out trades present themselves at this point of the session.

Fundamentals:

Chinese CPI has fallen to 0.8% – this would typically devalue the AUD as it indicates a general lull in growth and as consequence a decrease in demand for AUD commodities.

However given that the PBoC are looking more and more likely to introduce a stimulus programme with CPI failing to eek closer to their target band – this of course has been taken as positive by the market as Chinese stimulus looks more and more likely, which would undoubtedly get their industrial sector moving again and in need of commodities.

Later in today’s session we UK manufacturing CPI – I’m not expecting this to have a notable massive bearing on the markets unless we get a large deviation, with mild risk being to the upside with the current sentiment around the GBP being mildly positive.

Technicals:

At this stage of the session, with limited news flow to present a reason to get into the markets I will be waiting for pairs to approach key levels of support/resistance and trade the overall trend in line with the fundamentals – this will of course be in conjunction with any news flow we have that provides the market a reason to begin moving price action.

I’ll continue to pay attention to any significant EUR rallies as the session unfolds and simply checking the wires if there is any news to support the moves prior to considering a trade.

Other Market Moving News:

Yesterday SNB’s Jordan stated that they will intervene in the market if the feel it is necessary adding that there is more capacity within the SNB to further cut rates, keep an eye on the CHF and EUR pairs as the SNB give no forward guidance meaning a statement like the above means action could be very imminent.

Concerns regarding the breakdown of talks between Greece and Europe are fuelling some mild risk off moves across the board, with the situation in Ukraine taking less attention from the market – that is until we get further developments from the region with tensions mounting as Russia struggles to fend off deflation under Western economic sanctions.

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