Friday Paper Round

5 May, 2023

Fed / ECB week is now behind us. A few movements, so let’s explore anything of significance.

As I am travelling today, those charts have been prepared on Thursday post-ECB just in case Madame Lagarde sets off some fireworks in markets; I doubt it.

ES-Future, retracing to the previous’ week low and bang on the 50-day moving average. Possible test of the 4050 area supported by the 200-day average. Model is still long but getting closer to flip which would arrived once we are closing below 4040.

NQ-Future, similar retracement but still half way to previous week’s lows. Model is still long.

ZN (US 10y futures). Model is still long. The coiling behaviour seems to have given away to a break-out higher. Still uncoformined as we are trying to crack April and March highs. Stay tuned though.

US 5-30s, Paper’s favourite expression spiked nicely. Looking at the coiling formation and break-out. Could this be the blueprint for bonds? Let’s see!

Bund-Future. Model just triggered a buy signal. Take that Lagarde! Having said that the model had a few false starts on those buys in the recent past.

Gilts, meanwhile, are coiling up for a larger move. It’s worth keeping a close eye on this. In a week from now we will get the BoE announcement, although nothing earth shattering is expected.

Gold, damn that area is crowded and hard to break. Model is long. Will we finally break out?

GDX (Gold miners), meanwhile, are trying to stage a break-out of recent highs. It’s all happening. Model went long another unit in the recent down-move.

The USD can’t take break. EUR/USD still trending up nicely. It just looks too orderly, indicating a slow short-covering behaviour.

BTC/USD is slowly getting itself into a flag or coiling position. We are ranging around 28-29k. I suspect a break in a few weeks time.

Monitor Trades

AUD/NZD attempted a run higher post RBA hike which ultimately failed due to general risk off setting. Will previous lows be triggered?

GBP/JPY, Paper likes this one on various grounds. Good set-up to test the range lows.

Hope you enjoyed it. As usual, I will post anything interesting on Twitter or then here again soon!

Your,

Paper Alfa

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