Weekly EDGE 9-3-12 (Labor Day Edition)

I hope everyone has had a great weekend with family and friends. And for those of you in the United States, I hope you are enjoying your Labor Day Weekend. Here are a few articles I have read over the weekend you may enjoy.

Although we have been targeting the AUD/USD on the short side since about 1.0600, in the last week the articles have really picked up regarding the slowdown in China and the slump in iron ore prices. Here is another one from the WSJ.

Also, the WSJ notes the next year in equities cold prove to be a tough one for the 1st year of a presidential term, regardless the outcome.

Also, from the WSJ, your favorite Fed watcher (Jon Hilsenrath) is on the loose.

Although Mario Draghi skipped Jackson Hole, it hasn’t stopped him from hitting the wires. Here are some comments from the ECB head in Reuters about “bond buying.”

Here are some responses from Bloomberg in regards to Draghi’s comments.

I almost forgot today’s Moodys downgrade of the EU…..

On the calendar this week we started off with AUD Retail Sales yesterday that came in lower than expected at -.8% vs .03% expected. This alongside the China Manufacturing numbers on Friday (showed contraction and missed) put the downside in focus in the AUD. Tonight the RBA makes their decision on rates which the RBA is widely expected to keep rates unchanged. Look for comments from the RBA to guide price action later this evening. Earlier today the CHF also had Retail Sales, and GBP had Manufacturing PMI. Tomorrow out of the US we have ISM Manufacturing PMI, and tomorrow evening we have AUD GDP. Wednesday CHF CPI, GBP Services PMI, CAD Rate Decision and later that evening is AUD Employment Numbers. Thursday GBP has their Rate Decision alongside the EUR with Mario Draghi’s Press Conference. US will have ADP Jobs Numbers (day late due to the holiday) and ISM Services PMI. Early Friday Morning GBP will have Manufacturing Production, PPI and then CAD and US will have their respective Employment Numbers. CAD will also have IVEY PMI.

Lastly, most of you know that my team and I broadcast daily from 7AM ET through the NY stock market close. To access our live webinars daily (which are free, and our live in the market analysis has been for nearly 10 years now) just click on this NEW link. (If you have signed up in the past, Citrix is requiring you to re-register. If you have registered in the last couple weeks you should not have to do this again)

Here are some charts to kick off the week for you:

The weekly chart of the USD index sitting on key support. But take a look at the daily:

Look at the “confluence” with the 200 day SMA, 61.8 Fib level and (weekly trend line) just below

One thing that makes me a little nervous buying the USD here is the breakout in Gold.

This AUD/USD 4 hour chart is pretty self explanatory (whooops…trade plan is on there)

Copper is close to breaking out of this triangle

This is a “bull flag” on the weekly 10 year. As much as it “doesn’t make sense” to most analysts and traders, you must respect the price action.

Speaking of a looming breakout….look at the transports.

You can follow me on Twitter or Stocktwits @pipczar


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About Blake Morrow

Blake Morrow is the Chief Currency Strategist for Wizetrade. Blake has over 15 years of trading experience and has been a co- owner of a Dallas based brokerage firm and LiquidTrader Technologies. Currently, Blake does analysis daily for thousands on individual traders, also has appeared as a regular analyst on WizetradeTV, Traders Television and MBT Vision. Blake has also managed 6 figure trading accounts and is a seasoned individual investor in equities and FOREX.