Stocks are mixed, ending the day around their opening levels, while the US$ has is mildly firmer, grinding higher through a quiet Monday session, with the ongoing meltdown in Emerging Markets, particularly the ARS and TRY in focus and infecting the rest of the EM FX and high-beta sector, with the MXN, BRL and the Kiwi under pressure today. Elsewhere the majors have been quiet and rangebound although the US$ is mostly finishing on the day’s highs. The US10Y is ending the day above 3% (3.005%) which is helping to underpin the dollar.
Tuesday will be a busy session, beginnings in Asia with the RBA Minutes and the China Retail Sales/Industrial Production figures. Europe will follow up with the German/EU Preliminary Q1 GDP (exp +0.4% qq both for German/EU), UK Unemployment (exp +3.5k, Ave Earnings – excluding bonus +2.8%) and Inflation Report Hearing, as well as the German/EU ZEW Economic Sentiment Survey. The day will finish with the US Retail Sales (exp RS-Ex Auto +0.5%mm, Control Group +0.3%mm).
The US$ is a little firmer today but within its recent range against most pairs. With all eyes on US yields, this is likely to drive the direction but in the short term the dollar does look as though further minor gains are possible. At the same time the daily charts hint at a possible topping formation, so I would not be looking for too much of a rally, if indeed we see one.
In the crosses, further gains in AudNzd look possible, while Sterling looks a little firmer.
Stocks seem to have further upside potential, while WTI still seems to be a buy on dips scenario.
*Trade of the day: 5/15/2018 7:55 AM (AET)
*This is a personal opinion only, based on the look of the table below, and carries no guarantee of success.
Sell EurUsd @ 1.2000. SL @ 1.2050, TP @ 1.1840
Buy EurUsd @ 1.1860. SL @ 1.1810, TP @ 1.2000
Sell AudUsd @ 0.7585. SL @ 0.76250, TP @ 0.7450
Sell NzdUsd @ 0.6950. SL @ 0.6990, TP @ 0.6825
Buy US$Chf @ 0.9960. SL @ 0.9920, TP @ 1.0100