Category Archives: Trade Ideas

Asian Open: NZ unemployment falls to a new record low

New Zealand’s jobs report saw severance fall for a fifth successive quarter to a fresh record low of3.2.
Wall Street extends it rally (on declining volumes …)
US indicators rose for a third day although upside volatility was the smallest of the 3- days. Whilst it’s nice to see equities rise after a trouncing we also remain aware of the fact they rise on lower volumes. The jury remains out as to whether this is the early stages of a bull rally or simply a bear0market brio. The S&P 500 rose0.7 to the Nasdaq’s0.6, and the Dow led the way with a0.8 gain.
Reverse take advantage of a weak note
The New Zealand bone retained its place at the top spot history after another strong severance print, although the Kiwi and Aussie bones were formerly strong due to a weaker bone. Severance hit a new low of3.2, although employment change underwhelmed by only growing0.1, below0.3 anticipated and the 2 previous. Labour costs also rose0.7 q/ q and2.8 y/ y. The Kiwi bone has endured its fair share of dealing these once many weeks and it has allowed some breathing room to rebound from cycle lows against all majors except AUD.

The bone continues to correct
US bone indicator was lower for a third day with some Fed members helping to keep it under pressure. Bullard thinks the coming job report “ will not be good” whilst also stating that a 50 bps hike would help the Fed. Coming form a jingoist, that should be taken note off if you ’re hanging your chapeau on such a hike in March.

US manufacturing slows to a 14-month low
ISM manufacturing expanded at its slowest rate in 14-months, down to57.6 from57.9. Whilst it continues to gesture that growth has outgunned it does remain above its long- term normal of 53. New orders slipped to a 19-month low of57.9 whilst prices paid ( affectation element) rose to a 2-month high of76.1, which remains fairly high to its long- term normal of 60.

Gold toys with its 200- day eMA
Gold rose to a 3- day high of 1808, meaning it reached both of our near- term downside targets. Yet the 200- day and 50- day eMA’s continues to limit as resistance, and the request is on track for a bearish hammer on the diurnal map. The four-hour map shows the yearly pivot point and38.2 Fibonacci retracement is also acting as resistance, whilst the request also trades in a tight bullish channel into resistance.
This leaves two implicit issues; prices could hold the channel and break above 1810 to hint at trend durability on the four-hour map. Or bears return and break below 1797 out of the channel, which makes the 1797-1810 range of significance over the near- term. Given gold is only over against the US bone (and lower against all other majors), and real yields rose overnight we ’re leaning towards a strike break. But that isn’t reason to not be on guard for either script.

ISM Manufacturing inflation component much hotter than expected

Because the affectation element of ISM was advanced than December’s reading, the Fed will have to search for lower affectation away.
In Europe, the Market Manufacturing PMI is considered the most watched index for manufacturing and services exertion. The check is released as a primary reading near the 20th of each month and a final reading on the 1st of each month. Still, in the US, the ISM Manufacturing PMI is considered the leader for watching manufacturing and services PMI data. For January, the caption print was57.6 vs57.5 anticipated and58.7 in December. The caption print was weaker than December’s print due primarily to the New Orders Element (57.9 vs 61 in December). Still, requests know that what the Fed really cares about right now is the affectation element. The January ISM Manufacturing Prices was76.1 vs68.1 anticipated and68.2 in December.

Recall that from the FOMC press conference, Fed Chairman Powell talked exorbitantly about affectation and the possibility of raising interest rates at the March meeting. He noted how the “ Committee is of a mind to raise rates at the March meeting”. He also noted that “ We aren’t making progress on the force chain issue”. See our complete FOMC recap then. In addition, over the last many days, no smaller than 4 Fed members have been speaking about raising rates in March. Philadelphia Fed President Harker indeed suggested there’s indeed the possibility of a 50bps rate hike if there’s another shaft in affectation, though he’s less convinced of that now.

EUR/ USD has been in a over leaning channel courting to May of 2021. The brace briefly broke below the channel in late November 2021 and traded sideways back into the channel, only to test the topside inmid-January. The range of the sideways pattern in December 2021 and January 2022 had been substantially contained between1.1235 and1.1375. ( green lines). On January 27th, EUR/ USD broke below the channel and below the November 24th lows at1.1186. Still, with the doji candle on January 28th, and the long green candle on January 31st, a morning star conformation has been formed. This is a bullish reversal pattern.

On the 240- nanosecond timeframe, vertical resistance sits just above current situations at1.1274, also a convergence of resistance at the 50 Day Moving Average ( see daily map) and the 50 retracement position from the highs of January 14th to the lows of January 28th, near1.1302/1.1305. Above there, resistance is at the61.8 Fibonacci retracement position from the same timeframe near1.1345. Vertical support is below1.1173 also the recent lows at1.1121. Still, the coming support position is 1, If price breaks below there.1105, which is the127.2 Fibonacci extension from the November 24th, 2021 lows to the January 14th highs.