Currency blow-out – the GBP/USD is being decimated, and at this point it looks like the UK is headed for a hard Brexit come Oct. Be on the look out for a drop off to 1.21-1.20 for the potential of a “double bottom”. Reviewing the currency war, the question remains who can stop the slowing first or in other words, who will be less or more dovish from meeting to meeting?

Only 2 currencies remain bullish vs the USD – the Swiss and the Yen. This week will be all about Powell and the Fed banging the gong on wed.  with a 75/25% chance of a 25bps/50bps.  expect 25. 

Let’s check in with the executive branch on the subject matter….

This is the paranoia that exists when you anchor your presidency to market performance. If history has told us anything, its that markets will do what they want when they want to.  Asian equities struggled overnight with the Heng Seng -1.0% and the KOSPI -1.70%Friday’s All-time highs came on down volume (-11% vs the 1 month Avg and -14% vs the previous day). 

Oil- momentum is negative and you should stay with it. Look for bounces north of 57.00 as selling opportunities.

Gold- chances for a drop off back 1420-1415 we’d place as “high”.  Don’t chase this trade, it likely won’t be that easy PLUS the USD is showing now signs of correcting/topping as it moves back to “bullish trend”.  All in all, it is a very positive sign that Gold has performed well (or held up well), in light of the rising dollar phase we’re in.  More as the week moves on…

Market Trend Range Low Range High
SP500 Bullish 2968 3033
Nasdaq Comp Bullish 8119 8354
Russell 2000 Bearish 1534 1585
10yr Yield Bearish 1.99% 2.13%
VIX Neutral 11.52 23.11
Oil Bullish 54 57.8
Gold Bullish 1401 1438
USD (Cash) Bullish 9630 9821
EUR/USD Bearish 1.1 1.12
USD/JPY Bearish 107.4 109.2

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John Caruso

Senior Market Strategist
Follow John on Twitter @JCarusoRJO. John began his career at Wilshire Quinn Capital, a Wealth Management Firm based out of Los Angeles, California. John made his move to the commodity industry at the end of 2005, and began his path at Lind Waldock, at the time the largest retail brokerage division worldwide. John did his undergraduate work at Robert Morris University in Pennsylvania from 1999-2003, where he was a 4 year varsity basketball letterman.  A self-professed “Macro Trader”, John uses a multi-factor fundamental and “quantamental” trading model in distinguishing market cycles based upon the accelerations or decelerations of growth and inflation metrics. His technical and quantitative approach is heavily reliant upon trend and market range analysis via a custom built standard deviation system in helping him make probability-based market decisions. John is an avid reader of all things pertaining to finance, and behavioral economics. Click here to sign-up for John Caruso's Trading Coach Insights. Daily information and insight on all futures marketsin ranging from metals to equities.
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