Tuesday, November 1, 2016

Risk-Off

Markets are clearly in risk off mode today, most likely it is to do with the upcoming US election. I would refrain this week doing any risk-on trade as the risks are pretty asymmetric that puts the odds against any such trade. 

Economic Data
Both BOJ and RBA announced the leave the rates unchanged. Aussie rallied whereas JPY is unchanged. CHY Manufacturing PMI was much better than expected.

FX
CHF and Gold gained some 0.90. CHF is sharply down after a HS formation (4H chart). 


EUR exhibits a nice relief rally as I don't think it has anything to do with the risk-on sentiment. The short side was simple too crowded. Though, I try to fade the rally as I think it is technically driven.

The AUD rally was sparked by the RBA  on-hold decision. I don't have much faith in the move so I probably will look for shorting it on lower timeframes. 

Perhaps the NZD is a better short should AUD turn north.

USD/JPY looks bearish as risk-off developed. I would see how it develops and look for long around 104.00.

Equities
Both SP500 and DAX are near pivot point especially the latter one and it looks just before falling off the cliff.

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