Morning View: UK Election Heating Up | Vantage FX

Morning View: UK Election Heating Up

April 14, 2015

Morning Recap:
Chinese data smashed down the Aussie yesterday during Asia, and selling was continued all the way through Europe. USD strength on the back of stronger early Fed rate hike talks drove the other majors down with it, but all found some support later in the night and good buying has been seen recently, especially in GBP/USD.

The UK election campaign has heated up overnight, with markets getting the impression that there could actually be some certainty in government after all. ‘The Tories’ are now polling at the highest levels for 3 years, while current PM David Cameron’s personal approval rating is the highest in 5.

I thought this was interesting when I opened Twitter this morning:

This isn’t normal, and I expect it to be a poll possibly with a bit of shock factor so GBP/USD traders, stay alert.

Finally, if you’re wondering what the news spike across Japanese Yen pairs last night was, Abe adviser Hamada fronted a TV interview and said that the Yen is actually too weak with USD/JPY at 120.000 considering purchasing power parity. He went on to say that 105.000 is actually more appropriate.

Click on chart to see a larger view.

I take it that they’re just sending a bit of a signal to the Forex market and price action showed that there’s probably not too much to come from it so long as Japanese monetary policy stays on it’s current path. The market spiked down as the news hit, but as it was digested price retraced a lot of the initial move. As you were.

On the Calendar Today:
Only 2nd tier NAB business confidence survey from Australia this morning during Asia, but later on tonight we see a whole raft of top tier data released from the UK and US.

As I mentioned above, keep your eye out for any GBP election polls or headlines.

AUD NAB Business Confidence

USD Core Retail Sales
USD Retail Sales

Chart of the Day:
GBP/AUD Daily:

Click on chart to see a larger view.

I love how simple parallel lines on this chart show price stepping up level by level. Price pulls back into demand zones each time for the past 6 months and buyers step in to take it a step higher again. A perfect chart.

Most recently, price failed to make a new higher high, and came back to re-test trend line support. It found some buyers this time, but that is the first time in 6 months that price has re-tested the trend line without making a new higher high first.

Could this one be running out of steam?

Let us know what you watching on MT4 or trading? Leave a comment below or mention @VantageFX on Twitter.

Dane Williams – @VantageFX

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