This is hitting markets, from the New York Post:
Dr. Craig Spencer, who returned to New York City from Africa 10 days ago, was rushed in an ambulance with a police escort from his Harlem home to Bellevue Hospital on Thursday, sources said.
He was suffering from Ebola-like symptoms — a 103-degree fever and nausea, sources said.
While he was in Africa, the doctor had been treating Ebola patients in Guinea, sources said.
He’s undergoing testing at Bellevue to see if he has the deadly virus, sources said.
It still hasn’t hit the major newswires but it’s likely what’s weighing on USD/JPY and stocks.
The New York Daily News has more details and says:
FDNY hazardous materials specialists sealed off the apartment as EMS rushed the doctor, clad in an exposure suit, to Bellevue.
I think the trade on ebola is to fade fear but the story is still breaking so the trick is timing it.
Oil longs finally caught a break today on talk of Saudi oil production cuts.
The headlines sent WTI crude immediately $1 higher to $81.75. After some choppiness, it has continued higher to $82.05. But what’s more important is that it’s successfully retest $80 and that’s an early sign of a bottom.
To be sure, the bias is still down and WTI will have to clear $85 to spark any kind of continued optimism.
WTI crude oil daily
EUR/JPY is a classic metric of the trade but it’s been hit-and-miss since the European crisis because of the euro-specific negative factors. No one is in love with either currency because of non-existent growth and potential deflation.
Today, the pair is ripping higher on better sentiment surveys in Europe and reports of good results in bank stress tests. But the overwhelming factor is another banner day in the stock market with the S&P 500 up 2%.
The yen, meanwhile, is weak right across the board on stocks but also on reports of more potential easing in Japan.
Add it all up and EUR/JPY has climbed more than 150 pips from the start of European trading and erased two days of gains in the process. What it hasn’t been able to do is get above this week’s high of 137.01.
Watch that level.
EURJPY daily chart
The turnaround in the pair shows how quickly you can get wrongfooted in a EUR/JPY trade.
Analysts at Merrill Lynch have been looking at the long term USD/JPY charts … and they like what they see.
A key level they highlighted was the downtrend since 2002. They say a break above confirms a base and targets 110.67/112.42.
USDJPY monthly chart
Meanwhile BofA is bearish and short AUD/USD.
“Now that triangle is drawing to a close and the larger bear trend could be about to resume. Minimum downside targets are seen to 0.8525, ahead of 0.8415,” BofA projects.
“Further gains should not exceed 0.8861, while a break of the Oct-09 high at 0.8900 would invalidate this bearish view,” BofA adds.
BofA holds a short AUD/USD from 0.8818 with an initial target at 0.8525.
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The AUDUSD trading range is less than 100 pips this week. The is toward the low end of the extreme (SEE 1-week ATR in the chart below). I know we had equally as low trading ranges earlier this year, but volatility is increased of late and markets are more normal. Non trending leads to trending so I am on full alert for the trend move higher.
The range for the AUDUSD is very low so far…
Looking at the hourly chart the pair is coiling is also showing a market that is coiling like a snake. The 100 and 200 bar MA are going sideways and starting to come closer together. The midpoint of the October trading range is in between the 100 and 200 hour MA at 0.87745. The low trend line was tested in the Asian session. The high trend line was tested in the London morning session. The price has spent the last 4 hours below the 100 hour MA (blue line). and is trying to close a bar below the 200 hour MA.
I am looking for the market to break and run. The sellers are showing me more.
AUDUSD is coiling like a snake.
The snake is coiling. Waiting to attack.
Snake coiling = AUDUSD coiling
The US sold $7 billion 30-year TIPS in a re-opening of the Feb sale.
The similar (Feb 2044) long bond is trading at 3.055%. That puts the 30-year breakeven at 2.072%, implying that rate of inflation over the life of the bond.
Overall, it’s a soft auction and continues to pressure the broader bond market — something that’s helping to fuel USD/JPY.
It’s turning into a dreadful day for the yen as it loses heavy ground right across the board.
USD/JPY is finally beginning to benefit from the rebound in the risk trade as it climbs alongside Treasury yields. There are offers at 108.25 and 108.50 with the pair up more than a cent since early European trading.
One of the stories that’s hurting the yen is the Wall Street Journal report saying the Bank of Japan sees greater risk of inflation falling below 1%. There was also some talk yesterday that Kuroda could launch a Draghi-style ‘whatever it takes’ attack on disinflation at the end of the month.
I wrote about the potential for USD/JPY gains yesterday as this wedge broke and I think it could continue to 109.00 after some consolidation/retracement.
USDJPY 30 minute chart
The AUDJPY is not left out from the buying in the JPY pairs in trading today. It, like the GBPJPY (SEE POST) , is trading higher on the back of the USDJPY strength. The AUDUSD remains confined to a range (but it is getting ready to break one of these days – be aware). Nevertheless the buying today has been able to push the price above the 38.2% of the move down from September and the 200 day MA (green line in the chart below at the 94.59).
AUDJPY broke above the 200 day MA today at 94.59.
If the price can stay above the 200 day MA, the buyers remain in control. The next targets come in at the 95.207 and then the 100 day MA at the 95.76 level. Note how the price had a difficult time against the 100 day MA (blue line) at the end of September and early October. This should continue to make any test down the road a tough one to break (store that in your trading memory bank).
Looking at the 5 minute chart traders can see the details of the action today – especially as it relates to the 200 day MA at the 94.59. Note how traders used the 200 day MA as a support level for a good hour or two (see 94.59 green horizontal line in the chart below). That is showing me a willingness to add to longs (bullish). The price leg higher will now be monitored to see if the buyers on that move, really do love it. If they do, look for the 38.2-50% to hold (at 94.75-797). If it does, any seller will continue to feel the pain from the trend move. If the price goes below, it is not the end of the world for the trend, but focus will then shift to the 200 day MA line in the sand at the 94.59 area. That will be the key for the bulls in the move going forward.
AUDJPY shows strength above 200 day MA level.
October 23, 2014: The GBPJPY is trending higher today on the back of weaker JPY helped by stronger US equities.
The GBPJPY is up strongly today and testing the 100 day MA (blue line in the chart below) at the 173.367. This is giving the trend move higher today a cause for pause and the sellers are pushing the price modestly lower off of that level, but only modestly.
GBPJPY is racing higher but stalls at the 100 day MA.
The buying in the pair today is largely influenced by the JPY weakness (higher USDJPY). The GBPUSD is not contributing to the gains in this pair. In fact the GBPUSD is lower on the day. That is ok. However, it could be a problem if the USDJPY rally starts to lose steam. (it is pausing as well at the 108.20 – see POST HERE) . The GBPUSD is feeling the sting from the BOE meeting minutes and the weaker Retail Sales this week. Will GDP tomorrow be the hat trick or run counter to the bearishness from the BOE and the Retail sales?. The expectation is for 0.7% QoQ vs 0.9% in 2Q.
You can drive yourself crazy thinking about the pieces of the GBPJPY (i.e. USDJPY and GBPUSD) and also the fundamentals. So lets focus on the pair and the technical picture of it.
We know the day is showing a trend like move higher. The 5 minute chart below is showing that strength. The buying is steady and consistent. The corrections are modest. We know the 100 day MA is getting in the way of further gains at the 173.369. Traders may be lightening up against this level or setting shorts (dangerous in a trend move,but risk can be defines)
Buyers nevertheless, remain in control. Where do they lose some control?
Looking at the 5 minute chart, if the price moves below the 50% of the last leg up at the 173.137 level, that would be a crack in the bullish armor. Does it turn the bias terribly bearish? No, but it gives the sellers against the 100 day MA some satisfaction. Failure to do that and those sellers above, feel the pain and the fear from a potential break – and run – above the 100 day MA. They could reverse and buy and add to the bullishness.
So buyers in control, until the sellers can prove they can win the smallest of battles – the one at the 50% of the last leg higher. A move above the 100 day MA will target 173.62 and then 174.346 – the 50 % of the move down from the September high.
GBPJPY 5 minute chart shows the buying momentum. Little in the way of corrections has the buyers in control.
Meh! I’m sure it’s just lying around.
It’s always down the back of the sofa
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