May 13th 2016: US Economy Remains Sluggish

• This morning, the US dollar remains unchanged after a positive session yesterday. The move is part of the ongoing preference for safety following lack lustre US unemployment claims yesterday.

• Markets are generally lacking a strong trend though as typified by oil prices which rose sharply yesterday, but only to test highs already made days ago.

• The yen pairs remain pressured, but the May recovery remains largely on track.

• The pound came under pressure yesterday against the euro as Brexit uncertainty tipped the balance of the EUR/ GBP into the negative. Most recently the EUR/ GBP is typifying the back and fill trading environment at the moment.

• Coming up today we have European flash GDP at 10.00, with MPC member Haldane speaking at the same time. Haldane also speaks at 13.30.
• Following this we have US retail sales and PPI at 13.30, followed by preliminary UoM consumer sentiment at 15.00.

Trade Idea: 

• Brexit uncertainty remains, but the pound is generally holding its end up well. The same cannot be said of the Australian dollar, as the GBP/ AUD climbs ever higher.

• With more upside potential, the best way to play this is a HIGHER trade predicting that the GBP/ AUD will close above 1.9850 in 10 days time for a potential return of 119%.

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