Aussie dollar breaks 90, bonds sell off on GDP surprise

Gross domestic product rose at a 1.7% annualized rate after a 1.1% gain in the prior quarter. The median economist forecast called for a 1% advance. Further, the ADP Research Institute released data showing companies boosted employment by 200,000 workers in July.

Equities: The SEP13 E-mini S&P 500 (CME:ESU13) has started off today on a positive note, trading up 6.75 points to 1691.50. Our key pivot level for this market is 1684.50. We have the next market profile target on the upside at 1698.50. If the market does approach this level, we would not be surprised the market try to make a run above 1700. We still have quite a bit of data this week to help determine the market’s direction, such as nonfarm payrolls on Friday, and 3 central bank meetings, starting with the FOMC’s announcement today. Even at levels close to all-time highs, the market does seem very resilient on any down moves, and could use a potentially dovish Fed statement today to try to push through 1700.

Bonds: The bond market is in focus for us today, as the SEP13 30-year bond futures (CBOT:ZBU13) are down over 1 point, and breaking a very important support level of 133’18. This market is trading down to 132’26, and our next market profile target is on the downside at 131’20. This might especially occur on Friday if the jobs number delivers a big upside surprise. 134 and 136 remain key resistance levels.

Commodities: DEC13 gold (COMEX:GCZ13) is getting sold today on a higher than expected GDP as well as ADP jobs number. Traders are potentially positioning for a strong jobs number on Friday, which would potentially be very bearish for the gold market. $1,285 seems to be the first level of support for gold. SEP13 Crude Oil has rebounded today from its recent multi-day profit-taking trade. Today this contract is trading up $.7 to $103.77. We believe this market could attract some buyers at these levels, as the uncertainty surrounding key Middle East countries such as Egypt is not necessarily over. We are watching $105.50 as a  potential first target on a rally.

Currencies: The SEP USD futures starting off the morning on a strong note, but sold off in preparation for a potential Fed focus later today on easy monetary policy for a long time. The SEP13 Euro currency reversed early losses, and is now up 6 ticks to 132.72. The big story in the currencies today is the Aussie dollar, with the SEP13 contract breaking through major support at 90, trading down 94 ticks to 89.39. We have a next market profile target to the downside at 88.80, with resistance up above the current prices at 90.30.

About the Author
Anthony Lazzara

Anthony Lazzara, CEO of Newport Beach, Calif., commodities investment firm Lido Isle Advisors, spent 10 years as a trader and floor broker at the Chicago Board of Trade and Chicago Mercantile Exchange. Anthony has significant experience in the energy, fixed income, and equity futures markets. After being a long-time independent futures trader, Anthony saw a tremendous opportunity to educate investors on how to invest in professional traders. Anthony is now focused on his duty as CEO of Lido Isle Advisors.

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