The government shutdown isn’t a big deal…yet. Despite trading down 8 out of the last 10 sessions, the S&P hasn’t actually moved much. Before today, the index had only seen a net loss of 40 points.
Despite the volatility, much of the market is essentially on hold right now. Should the shutdown continue into next week, the picture could get uglier. But don’t listen to the doom and gloom headlines just yet.
That being said, every day that these embarrassing shenanigans in Washington drag on acts as another body shot to the dollar. Besides the EUR/USD pair (which I’m actively seeking entry to on a shorter time frame), I’m looking at a few attractive technical setups – all made even more potent by the dollar’s pain.
Here they are:
GBP/USD
My stop was hit the other day on this trade, but I’m still very biased to the upside. The Fed and BoE’s diverging stances on QE spell considerable fundamental tailwinds. And price’s recent close above resistance should indicate a continuation to the upside.
AUD/USD
I’ve written about this enticing setup before, and despite the sideways movement of price as of late, the pair is still shaping up for a long term move. I’m not quite ready to jump aboard.
But the 0.95250 level will be a key barrier – if it breaks, I’m in.
USD/JPY
The dollar-yen pair has traded in an increasingly tighter range since June. It’s going to take a significant fundamental catalyst to drive price out of its consolidating pattern and into a clear trend. A break below 97.00 would be big – this is the level I’m watching.
Stay frosty.
CentricFringe 