Calendar Week 17-2023

 

Bit of a dud week with conflicting signals for the global economy. USA in particular is giving off multiple mixed signals, with data points both showing inflationary and recessionary. End result of last week is that it is mostly unchanged in price action across the asset board.

 

Only thing really moving is risk, or credit default to be precise, as USA comes closer to the debt cliff and politics comes before sanity. If you call $31 trillion sane. Still, despite the grandstanding, I cannot see the Americans defaulting on their debt and the “ceiling” will be raised yet again. Calling it a ceiling is laughable though right? Cant be a ceiling if you never reach it.

 

Looking ahead, the big numbers this week are at the back end, starting with US consumer confidence (inflationary linked) and Australian CPI Wednesday, with US GDP on Thursday and the Bank of Japan on Friday.

 

Currency Guidance

 

USD – Tracked sideways but looking technically bearish. If risk off stays (as VIX indicates it will) then look for this to retest the double bottom of 100.50 of Feb/Apr.

 

AUD – My position on the AUD remains, stay away. It is so loved up to 67 cents, it will take a major announcement to kick this out of the chop. Will CPI mid week be that announcement?

 

EUR – The pullback was shallow and this looks like it is heading to 1.12 now.

 

GBP – Also a shallow pullback, indicates good buying intention and this should target 1.2650 now.

 

JPY – Staying on the 4hr chart, this pair looks to be starting a new cycle. Tough trading though as both Yen and Greenback are dominated by sellers right now.