If you don’t have a view, you don’t have a clue (15.06.17)

If you don’t have a view, you don’t have a clue (15.06.17)

Hi Guys – a late post today.
Yesterdays market was interesting as the $ fell during the day on U.S figures only to rebound on the anticipated (by some) rate hike.

Let’s see where we are now.
Euro$ around 1.1150 makes sense to me and I still think this has a way to go. 1.1000 is the big support level and this could be tested over the coming week. That said there are a lot of folk holding this up as the UK exit from its Euro-zone partnership continues to get ugly.
There are many that want to see the Euro grow and the Pound fail so expect a lot of chop with this. Should 1.1000 be broken and it stays beneath it could slide to the next big support level which I calculate to be 1.0500. The other side of the coin I calculate to be is 1.1500.
It needs to get above that in order to gain momentum in that direction. This range has been around for a long time as in previous posts.
So my overall view of this is lower but ever cautious as we are trading a moment in history right now and there will be intervention and plenty of people supporting the Euro. It will be choppy.
Euro Yen I think will be a good pair to trade.
Euro Short term view – lower
Euro Long term view – lower

The Pound is in all sorts of trouble and is destined to go lower as the political dogfight continues. The Cable (£/$) could go anywhere short term so under the current circumstances I have to reconsider my view. In order for this to gather any momentum to the upside it really  needs to get above 1.3000 but I just don’t see that happening right now or in the near future (unless the $ takes it there).
I just don’t see the Pound doing that under its own steam.
Currently around 1.2750 I am tempted to predict an eventual slide to 1.2000 over the Brexit negotiations unless something pretty substantial comes along.  Another U.S rate hike compounded with Brexit negotiations could do it so its not an overnight thing at all and could take a while. Depending on who it is that actually does the negotiations will be crucial and so possibly determine the fate of pound short and long term.
Once the UK sorts itself out outside the Euro-zone, I think it will come back but  we could possibly be talking years down the road with that.
The Pound is in for a rocky ride and as in unchartered territory anything could and probably will happen.
We really have to wait and see with this.
Pound Short term view – neutral to lower
Pound Long term view  – neutral to higher

Oil has taken a substantial slide but then that is hardly surprising (to me anyway).  Having sailed through $45.00 and currently sitting at $44.50 (courtesy of the $ and the stockpile) I think this is staring at $43 and then $40. There will be many that do not want this to slide so do not expect an easy run. It will be supported around these levels for sure so expect whipsaw markets. My “Super-Long” term target for the slippery stuff is $30.00 but that will take time if indeed it gets there at all.
Oil Short term view – lower
Oil Long term view – lower

Gold. What on earth is going on with the precious?
It just cannot climb over the 1300.00 wall and sit on it.  It managed to get to 1365.00 briefly in June 2016 but has suffered ever since.
While my view remains unchanged with this It looks like I really am going to have to wait. In order for this to go up it needs to get above 1300.00 stay there and then have a good run at 1400.00. When and if it manages that then, and only then, I think we may see a good run northwards. It has tried that 3 times since August 2013 but slid back being well and truly supported around 1100.00. I am going to have to wait as this appears to be “glued” to 1250.00 or thereabouts for the time being.
Gold Short term view – neutral
Gold Long term view – higher

I think Yen will be the currency to watch going forward as traders and investors look for a “safe haven”.
I’ll be keeping my eye on £Yen, Euro Yen and of course $Yen.
Yen Short term view – higher
Yen Long term view – higher

The U.S $ has been all over the place hasn’t it.  It enjoyed a strong rally when Donald Trump was elected and The Federal Reserve started raising rates on the back of an improving economy. The fiscal stimulus that the new President promised supported the greenback and so the upward move began compounded by an upbeat outlook by Fed Chair Yellen. However things have changed and the Fed has become a little cautious as the economy is not looking as good as it was expected to be. Recent figures have had the $ all over the place as I said and I think we have a lot more of that “uncertainty” to come so expect very volatile markets.  I will therefore have to be neutral with this for the time being.

Trading Break
I am going to be taking a trading break now for the next week or so and back in the seat on the 26th of June. Naturally there will be no blogs during that time. The views above express my opinion only and simply show you the direction I am looking for so under normal circumstances means I wouldn’t be trading every day.

If the market gets in line with my view then I am in it.
If the market goes against my view then I am not – it’s that simple.
Not trading does not mean less money at the end of the month.

Take it easy with your trading is my advice as the Brexit negotiations are likely to begin shortly and every item of that scrutinised by market analysts. There will be some big moves coming in the very near future but there will also be some frustrating “choppy” days too.
Keep it tight.

If you don’t have a view, you don’t have a clue.
And if you don’t have a clue, then you just, don’t, do….!

Catch up on the 26th everyone

Clive

Enter your e-mail address to receive updates straight to your inbox

Sign up to Investment Insights direct to your Inbox...

About Author

Clive Arneil

Clive Arneil worked for major brokers for over 20 years trading most instruments in the Foreign Exchange markets as well as Derivatives. Brokered deals on behalf of some of the worlds largest banks including Barclays, Citibank, UBS, Nat West and the Bank of England. Worked mainly in the UK but also in Switzerland, Germany and the U.S. Retired from the Money Market at the age of 40 and worked as a financial data feed specialist supplying market data to Banks, Brokers and Spread-Betting companies. Still trading and teaching people the skills required to master today’s volatile markets.