“If you’re playing for emotional satisfaction, you’re bound to lose, because what feels good is often the wrong thing to do.” – William Eckhardt
q2 kicks off with the usual China related gap up open on the indices. All in all, our expectation is for this opening gap to fill sooner rather than later. We do not see this as a pop on anything that justifies a good old fashioned sustained ‘gap and run’ so our tactical intraday focus will be on the gap fill and what this means for the other charts too.
On the commodity side we still expect Crude to resolve lower and Gold to resolve higher but not in a smooth fashion. As discussed, this 60 mark into the 200DMA zone is the fade zone to watch in crude and Gold in stuck in a very choppy 1250/1350 broader range. More on this in the outlook video.
On the FX side, our main focus this week will be on EURUSD so far failing to attract new sellers in this 1.1250/1.1200 key support zone and on AUDUSD and the RBA decision. As far as Euro is concerned, we feel that the more interesting play is to look for a tactical bounce and as far as Aussie is concerned, we will be look for opportunities to fade any hawkish RBA surprise.
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Wishing you a great day ahead.