Weekend downgrade announcement in Italy, market watching to see reaction for one day ~ October 22 strategy ~
◎ Current positions and strategy
EUR/USD Short position remains as the core position, all added positions have been closed. There were reports last weekend that Italy's budget deficit target might be revised from 2.4% to 2.1%. Also, because the European Commission's remarks toward Italy were not harsh, concerns about the budget plan have receded. The euro has been rising. Regarding the added positions, the last added position was closed at breakeven, while the other added positions were profit-taken. For the core position, we are still bearish, but if concerns about the budget recede completely, I would like to close it as well. The stop is set at breakeven.
Looking at the 4-hour chart, a double bottom appears to be forming. On the daily chart, it looks like a roughly six-month trading range. If a double bottom forms on the 4-hour chart, I think it will move back into the daily range.
EUR/USD 4-hour chart
EUR/USD Daily Chart
AUD/USD Short position is held. The Australian dollar has few positive factors, and although the US dollar is also being sold, it is moving in a range. From a fundamental analysis perspective, I think AUD should be sold and USD bought. I will watch closely for RBA officials' remarks today and tomorrow. The stop remains at breakeven. I am considering adding a position at 0.700.
AUD/USD 4-hour chart
AUD/USD Daily Chart
Today is Monday at the start of the week, and there are no particularly important economic indicators. So,The plan is basically to wait and see. The points of focus are as follows.
◎ Today’s focal points
1)Italy's budget and long-term interest rates
Late last week, Italy's rating was downgraded just before market close. Since European markets were closed, I am watching today’s reaction in Europe. In particular, the long-term interest rates are in focus. The rise in Italy’s long-term yields is spreading to Spain, Greece, and Portugal. The rise in rates starting from Italy’s budget concerns is spreading across Europe. If the rate differentials with Germany widen, it could lead to euro selling. Be mindful of the interest rate differentials. Also, the rise in rates increases corporate financing costs and can impact stock prices. Watch the trend of European equities as well.
Moody's rating publication, Italy downgraded! ~ FX education: what ratings mean ~
2)Movements of Saudi Arabia and other countries
The disappearance of the Saudi journalist has the world watching. Sanctions and investment-ties pulling back are beginning to appear against Saudi Arabia. The US stance is turning cautious rather than taking an active sanctioning direction. The US response and Saudi Arabia’s reaction are noteworthy. If Saudi Arabia pushes back and interferes with crude oil supply, oil prices could rise sharply. I will keep an eye on developments among various countries.
3)Many RBA officials’ remarks
From today through tomorrow morning, many RBA officials are scheduled to speak. Those trading AUD should be cautious.
◎ Today’s event schedule
10:00 AUD
07:35 AUD
10:30 AUD
12:00 AUD
13:30 AUD
↓↓↓ Please refer to the weekly schedule below ↓↓↓
◎ Recording Room
Long-term interest rates, major currency strength/weakness graphs, stock prices, and remarks are recorded below.
Recording room on Oct 19 ~ Rates, stock prices, and remarks ~
