Feb 16th 2016: Markets Tough It Out

• Markets are presenting a mixed bag this morning, but generally there is a sense of stability after weeks of volatility. The dollar index is posting a small rise, with the USD/JPY following suit.

• Commodities have joined the correction party, with oil rallying and gold prices dropping from the highs.

• The Australasian currencies are mixed, with the Australian dollar continuing its push higher, but the NZD/USD struggling following below par inflation expectations and retail sales.

• The euro continues to struggle however as markets stabilise.

Coming up today: 

• Coming up today we have UK inflation data at 09.30, with CPI expected to rise by 0.3% and RPI by 1.4%.
• From 10.00 we have German ZEW economic sentiment, release alongside pan-European figures.
• From 13.30 we switch to North America for Canadian manufacturing sales and US empire state manufacturing index.

Trade Idea: 

• The AUD/JPY can often see exaggerated moves in both directions and right now it’ enjoying a positive bias. There’s no way of knowing how long this run will last, but there is a good chance of a pop higher.

• A good way to play this is a HIGHER trade predicting that the AUD/JPY will touch 84.00 within the next 7 days for a potential return of 124%.

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