Changing dynamics in the market that were mentioned yesterday are exhibiting today again. ISM manufacturing (above 50 finally...) and pending home sales both significantly higher than expected and yet USD is higher across the board. US equities took a 1.5% dive and commodities look pretty weak as well (oil below 69 and gold below 950). Risk appetite and USD weakness that we used to see as a consequence of a positive news releases have disappeared.
Looking at the charts I see two huge triangles on EURUSD and XAUUSD. The breakout looks to be imminent and while no one knows which way they will break, when they break it will be a large move. Global equities, especially Chinese, don't look too good, break lower in oil would send USD higher. EURUSD daily looks to be in a topping formation so if I had to choose... I'd buy USD.
Good trades.
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