The weakness in the US$ has continued to support lead US equity indexes and commodities alike. This week I’m instead going to focus my words on the weaker non usd indexes especially given the likeliness of a bounce here in the US$.
So the key price weakness in recent weeks has been European Indexes and the big question, especially for any one long, is whether we have seen the 2017 top in these indexes like dax and ibex35 etc. As the guys pick up the euro is indeed overbought and the US$ due a bounce so how the euro indexes perform of this weakness will be telling.
Will price offer us a higher high or not on euro indexes? Euro Stoxx50 chart looks to be providing a huge bull flag signal from the mid may highs to the current under performance with its obvious inverse correlation to the eurusd. To get a clearer view of the stoxx50 bring up (FEZ) a usd view of the euro50. She is very close to breaking out in USDs. I want to see that price confirmation soon. The tactical trade is clear. It would be rare, so long as we do see some euro weakness, for price not to at least achieve the 3600 level on a high momentum retest of the may highs. (All eyes on Draghi most likely to give legs to the technical setp).The dax likewise was (and remains) a buy today given its weakness back to its five day lows vs the medium term tech setup.
The Hangseng has been on fire and is overbought and inversely correlated the USD. Therefore could be a wise moment to take a little profit on this index. Commodities for a moment check the copper futures chart. We have indeed achieved a higher high which is an inflationary signal as well as US$ weakness signal of course. Alas the copper miners themselves have not yet broken out of their Feb17 highs. Although lead individual stars like ANTO (a personal hold) have moved beyond their feb highs and confirmed the underlying. Audusd confirming and back to levels last seen in 2015. The reflation is not dead yet!
Tips has been weak in recent months but given the US$ recent debasement we should expect the inflationary data to soon start to come through in the shape of producer and consumer prices. Expectations may leap upwards when the data starts to show which may support gold. As the guys correctly mention the cftc trading weightings are supportive for a bounce in gold prices. Its no longer a trade many are in or an empty trade rather than a crowded trade.
Anyway without further delay here the swiss team as usual:
Please note the guys will be on holiday next week so I’ll take a holiday. Therefore the next update here will be on the 9th or 10th of August.
And here a macro run through from WF:
The uk is in a precarious position and the GBP close to key supports so a timely report here.
Also here the cftc report on the pms via scotia as picked up on by the guys:
I may update this release with a v2 ie inc Fitzpatrick’s work in the next 24hrs or so.
Also we have batched the subscription renewals into this month from the last quarter or so. For those of you who have renewed many thanks to you for your continued support. This site would not exist without your support. For those who have not yet renewed please take a week or so but beyond this we will be doing a data base clean up and your account will be deleted if you don’t tell us something.
Kindest regards to you all
Rich