The week started with a strong stock sell-off. The risk-off mood developed during thin Asian trade on Monday with concern about the debt-ridden Chinese property behemoth, Evergrande. This gripped the Australian markets in particular as the company is the consumer of about half of all Australia’s exported iron ore. There has been a double-whammy ‘down under’ due to the collapse of the iron ore price as well and this set up a prefect risk-off mood heading into the European and US trading sessions. Aussie and US stocks closed sharply lower and there was a move into the safety have JPY and Gold. The US$ saw a bit of inflow but not of the order one might have expected and the commodity currencies, whilst lower, are holding up relatively well, for the time being that is. Interestingly, Ryan Detrick reminds traders that this volatility is to be expected at this time of year! Of course, the elephant in the room remains Wednesday’s FOMC.

 

Data:

 

DXY weekly:  bullish momentum underpinning this new b/o so watch to see how FOMC impacts:

 

Trend line breakouts:

GBP/JPY: another great trend line breakout opportunity here:

GBP/JPY 4hr: chart from w/e update:

 

GBP/JPY 4hr: chart today after TL b/o for around 120 pips:

 

GBP/JPY 30 min: note how the TL b/o came in the early European session and gave a 2 R trade:

 

S&P500 4hr: this TL b/o gave up to 90 points:

 

ASX-200 4hr: this TL b/o gave up to 240 points:

 

Gold 4hr: heading back to $1,770?

 

AUD/JPY 4hr: lower due to Yen strength:

 

GBP/USD 4hr: a TL b/o for around 85 pips:

 

Other markets:

EUR/USD 4hr: holding up rather well considering the risk off shift! Note the bounce up from 1.17:

 

AUD/USD 4hr: also holding up rather well considering the risk off shift! Note the bounce up from 61.8% Fib:

 

AUD/JPY 4hr: also holding up rather well considering the risk off shift! Note the bounce up from revised 8-month TL:

 

NZD/USD 4hr: also holding up rather well considering the risk off shift! Note the hold above the daily 200 EMA: