IIFT Daily Note with Peter Brown

Same again this week.

Posted by:  |  Time: 7:47 am  |  Topic:
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Market looks set for a repeat of last weeks trading. S&P falls and rebounds. The fall comes in European trade and then the US market rallies. Seems a pretty established pattern. We all know by now the strenght and dynamics supporting the US equity market and the buy on dips strategy is working very well. There seems no need to change. We put in a new high on Friday at 1515 so that is the target for today. Need a pull back for value and 1506 /1508 is the best level.

The Euro is more complicated. We have seen a sell off and reached 1.3350 overninght. Talk from ECB members that they would like to see the Euro lower is fine but without a change of strategy i.e. QE it is hard to see the Euro going down very far. GBP, JPY and the US are doing QE so those currencies will remain weak. This weakness in the Euro should be short lived. I am not a seller on this move and feel the short term should be higher.

1.3350 is support and 1.3400 is resistance. Like always wait for the mood on the Euro for the play. The range should be tight.

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