UK inflation yesterday surprised on the upside. Its service sector clearly showed reflation is kicking. The US, just like the UK is service-sector oriented. It also showed encouraging housing activity reaching highest level since 2007 (check homebuilders stocks at new highs).
Manufacturing is an issue due to lower Oil and EM. Loweroil on the other hand also helps...
Markets turned heavily risk off, on Chinese Yuan devaluation, which strengthened the CHF. Markets experienced the strongest 2 day drop in a long time. A reversal is in the cards.
The Yuan devaluation will not prevent the Fed from Lifting Off (rising wages, state of employment). On the other hand the SNB will do all in its power to keep the CHF under pressure.
Why is the Swiss Franc so strong today?
After the news of a “credible” proposal by Tsipras, investors turned to risky assets, which should logically weaken the safe haven Swiss franc. Instead the franc rose close to 2% versus the US dollar or the Yen, and remained fairly unchanged compared to the Euro, the other big winner after the positive Greek...
update: 10.07.2015 exit with small profit at 0.9461. Likelihood of a Greek deal has increased, pushing the markets higher hence the USD to appreciate and the CHF to depreciate.
Initiated along position target...
Update Jul 9th. Took profit at my limit. Waiting for a pullback to 0.9650 to reenter.
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- Oil broke out of range putting pressure on CAD.
- The inability to find a deal today b/w Greece and creditors = risk...
Japan outlook is improving and the Yen provides protection in case of market turmoil. The risk is that a deal is signed or or a "Yes" vote at the greferundum. However even in the case of positive news this weekend in Greece, the euro strength should be short lived due to its inverse relationship with the European equity markets. Reason why I keep the stop far...
Weaker GDP and Oil coming off again below $60 on Greek turmoil should keep the CAD well offered. On the US side, ADP came better and announces a positive NFP on Friday. Positive Greek development would lead to risk appetite, and a strong USD.
Buy a pull back at 1.2402, stop 1.2348 and target 1.28
