Macro Morning (Greek snow job)

By Chris Becker

For all the hyperbole leading up to the recent Greek election, markets have largely brushed off the turmoil, save the Euro (literally) which fell from 1.16 to just below 1.11, but has since recovered somewhat.

The bigger news, relatively speaking, is the massive blizzard hitting New York and elsewhere in the north-eastern US, which is having an impact on Wall Street.

While it gapped-down significantly yesterday morning alongside everything else post-Greek election, the S&P500 has recovered to resistance at 2060 points and looks set to breakout here:

Chart SP500, H4, 2015.01.26 21:30 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

European stocks have completely brushed off the Greek result with both the DAX and FTSE pushing to new highs. The former looks considerably overbought, but that is to be expected post ECB QE:

Chart DAX30, H4, 2015.01.26 21:32 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

The daily chart of the FTSE shows it has broken through overhead resistance but there doesn’t seem to be much potential from here unless the long term 2013/2014 highs can also be broken:

Chart FTSE100, D1, 2015.01.26 21:33 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

SPI futures closed yesterday have now played catch-up and look set to push the ASX200 higher, although iron ore and gold stocks might be sold off due to the commodity price moves down.

Gold is still wavering around the psychologically important $1300USD per ounce level and post Greece has found itself sitting precariously on support at $1280USD on the four hourly chart. After this small retracement, I’m still expecting a tight range before another leg up but a reversal below $1250 should be watched closely for a new short position:

Chart XAUUSD, H4, 2015.01.26 21:36 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

Oil is not letting up with WTI crude hovering just above $45USD per barrel, down over 1% last night alongside Brent at $48USD per barrel. As the four hourly chart shows the attempted breakout above $50 has been thwarted and we’re back to terminal support (the red horizontal line) with a breakthrough that level bringing out all the shorts again on the ride down to $30:

Chart CL-OIL, H4, 2015.01.26 21:39 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

Currencies once more provide all the opportunity. Euro was slaughtered (rightly so) on the Greek vote as I mentioned above, but also provided opportunity for long swings on the gap on Monday morning. I doubt any of these will be held onto longer term as selling torque returns and safe haven buying in USD accelerates:

Chart EURUSD, H4, 2015.01.26 21:41 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

Pound is putting on a small recovery, inching above the 1.50 handle as the half hourly chart below shows, but is still in a determined downtrend against the USD with a break above 1.5260 needed before getting excited about being long:

Chart GBPUSD, M30, 2015.01.26 21:43 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

Yen is range trading as I expected and had a volatile Monday morning as no one was around to trade Aussie against it, and is now forming a triple top in its range pattern. I’m looking for a substantial break above the 119 handle for a long and it seems with higher lows on the four hourlies, everyone else is too.

The Aussie is now firmly below the psychologically important 80 cent handle against the USD (and on the crosses) breaking below late last week going into the Greek election, and seeing 78.50 briefly on the gap open yesterday morning.

Chart AUDUSD, H4, 2015.01.26 21:46 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

I’m not expecting much upside here longer term but short term should provide some counter rallies to the downside trend. For those looking to add/put on longer term short positions in AUD, daily resistance at 82.50 provides an obvious uncle point on any rallies up to that level (perhaps leading up to the Feb RBA decision)

Data today is pretty solid locally, with NAB business confidence and Roy Morgan unemployment prints this morning before closely watched Chinese industrial profits print around lunchtime. In Europe tonight we have the UK 4Q GDP that should get Cable burning and then a swathe of mid level US releases, highlighted by consumer confidence and new home sales.

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